Optimizing New & Existing Outside Counsel Relationships
Selecting outside counsel and law firms is an arduous process, and should be. These relationships highly matter.
In fact, corporate general counsels spend countless hours finding the right firms, either by tapping into their personal networks or going through lengthy RFPs and countless interviews. This extends further to the time spent in manual processes between you and your chosen firms. At the end of the day, mismanagement could add up to millions of dollars in lost productivity and overexpenditures a year.
The folks at the have highlighted what legal departments must think about internally and externally to make sure they are making the right decisions for their organizations. According to :
“Legal departments must do their share to deliver service optimally and be run like a business, develop strategic plans, thoughtful budgets, implement efficiency enhancing tools, develop talent, leverage knowledge management, manage vendors, and do so much more.”
When you do have your selection, how do you make sure this is a positive engagement for both you and the selected firm?
A common solution is to set up an electronic matter management system paired with e-Billing to increase efficiency, simplify systems, and help control spending. Additionally, this single platform combines data about law firm costs with data on matter outcomes to allow you to consider the actual value you are receiving from your firms.
Common challenges seen in the market
1) Lack of standardized processes (and enforcement) for opening and managing matters and reporting on matter progress
2) Inefficient communication methods for managing outside counsel
Together, these challenges often cost large organizations millions a year. On the other hand, we’ve seen companies save multi-millions in the past few years as a unified Enterprise Legal Management platform gave them insight into the data that allowed them to truly become increasingly lean. This frees up your team and staff attorneys to be their most efficient and productive selves while decreasing billing inconsistencies and issues.
Understand the processes and data ready to be collected
Seeing your data-driven results is key. Generally using manual or decentralized systems need intricate or timely reports to be built by others in the company (if time permits.) This is highly ineffective and takes away from productivity. If you can see and consume your reports and dashboards at the refresh of a page, what would that free you to complete?
At Mitratech, we’ve seen combined cost savings from matter management + e-billing components that result in a reduction of external legal spend of anywhere between $6 million – $48 million for clients.
The magnitude of this savings happens for a number of reasons, most to do with the analysis of who’s working for you, what they’re producing, the types of matters they are resolving, and what this looks like for your organization. Legal departments want to be consistent, meet objectives and goals, and take care of knowledge management by increasing the accuracy of legal spend forecasts and implementing the right programs to reduce extraneous legal spend over time, reduce attorney hours, and realize staff savings.
Your team uses several outside counsel in that area for reviewing different matters. There’s a lot of factors that play into who’s doing the best and right by your organization. One firm may cost less than another, but what is the outcome you are receiving? Would it be less expensive to settle? Attorneys often do this by measuring the risk in a situation, but all other things equal shouldn’t data help drive the decision.
Making decisions through reported results
Through analyzing reports regarding budget/expenses/spend and amounts settled by matter category, overall spend on important matters over a certain period, total spend of the top outside firms by spend-billed vs paid invoices by matter or vendor, and invoices by count or dollar amounts over time can help you make better business decisions – keeping firms, passing certain matters to specific teams, or reevaluating need.
By implementing a unified, scalable, and automated matter management solution with an e-Billing system, legal departments can reduce time and effort spent reviewing and approving invoices, decrease legal spend through enforcement of negotiations and billing guidelines, and optimize the selection of outside counsel to improve the predictability of legal outcomes.
“We use TeamConnect to manage work allocation and capacity planning for our preferred firms. We have over 700 firms that we use globally but these 19 firms have 65% of our work. The goal of the program is to direct 75% of the work to these firms.”
Director of Legal & Compliance Technology
Fortune 100 Pharmaceutical Corp