The insurance industry is filled with so many niche solutions and products these days – how do you know which one is for you? Litigation cost management has been around as long as litigation has (so, forever), but it’s now being recognized as a necessary solution for companies with a lot of litigated claim files on hand.
What is Litigation Cost Management?
Litigation cost management, legal spend management, cost containment, or claims management, is keeping track of and understanding all cost data surrounding a company’s legal matters.
For a large corporation who may see many litigated claims, it’s important to know both micro and macro data, including but not limited to:
- Which lawyers are on the case
- The current case inventory
- Amount of assignments per month
- Amount of files closed
- Time it takes to close a litigated claim
- Attorney rates
- Hours attorneys have worked
- Amount of money spent
Why Do I Need It?
When there is a lot of legal action within a company, things can get lost or overlooked, especially in a day and age where paper or non-digitized invoices are popular. In addition, the most important part of managing these costs is so you and your company can understand the data points behind your litigated claims.
When you know more information about what is happening, you can build trends, forecast future spending, and raise flags when criteria are met. Knowing your numbers means knowing exactly what’s happening. Some corporations like to think they have this data organized in-house, but a lot of people don’t.
You may need a third-party vendor to help you with your spend management if:
- Your workload is crazy and you want help without having to hire a new employee
- You are receiving a lot of invoices without having a proper way to keep track of the information
- Your corporation’s litigation costs are on the rise – it’s hard to pay firms on time because your workload is still crazy
How Do I Choose Who To Work With?
Legal spend management gets a bad rap when there are companies who focus on nitty-gritty bill reductions and auditing, which in turn tarnishes the relationship between corporations and their firms. This is where you, as a corporation or company, have to be careful.
Although auditing and bill slashing may create near-term savings, it will end up costing you big in the end. If your legal defense comes to the point that you do need to take either of those steps, be sure to speak with them first and discuss matters before bringing in a third-party vendor for auditing purposes. Firms prefer to be treated with respect and transparency and you want to maintain a good relationship.
On the other hand, there are third-party vendor who focus on data management, help the firms get paid on time, and make it easy for you to know your numbers.
Talk to your team about your needs moving forward. If you want easy forecasting, cost management, and a seamless program to complement your litigation process, then litigation cost management is for you.
We’re happy to help there (it’s our expertise!), so feel free to contact us at [email protected].