When strung together, legal spend management can sound daunting and intimidating. To break it down, it’s the simple act of managing your company’s legal budget.
What is Legal Spend Management?
Legal spend management, litigation cost 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
Does Our Company Need Legal Spend Management?
When a company receives hundreds of invoices, it’s hard to keep track of all that information. Although it’s easy to confirm and approve each individual invoice, what happens in the long run when you suddenly realize that you’ve gone over budget? This can be easily prevented when invoices can be digitally managed and tracked.
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.
You Need Outside Help With Your Legal Spend If…
- You have a huge workload and although you want to manage your legal spend, you just don’t have time
- You recieve an overwhelming amount of invoices without having a proper way to keep track of the data
- It’s hard to pay firms on time because of aforementioned workload
- You want to know more about your firms’ activity
- You want to be proactive about forecasting legal spend trends and catching honest invoice mistakes
Are Third-Party Vendors Bad?
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 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 vendors who focus on data management, help 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].