In early June, legal ops professionals from the CLOC Southeast Regional Group met in Atlanta for a knowledge-sharing and networking session. I was fortunate to lead a group discussion about outside counsel spend management and hear from participants about the challenges and opportunities their legal departments are facing today. The evening’s conversation touched on many subjects, but as I walked back to my hotel, I found myself contemplating three key themes. I’ve highlighted them below, along with my thoughts about how legal teams can address each of them.
Finding the right legal technology partner
Deciding which legal technology provider to work with is crucial for optimizing legal operations and reaching legal department and organizational goals. Several conversations made it clear that trust and credibility of those representing the product are at the forefront of initial considerations for legal ops professionals. Specific to ELM technology, here are other key factors to keep in mind when selecting a partner:
- Industry analysts can help you narrow down the options. Look for market-leading ELM platforms that have evolved beyond basic e-billing and provide opportunities for deeper cost savings through vendor engagement and collaboration, and provide seamless integration with a portfolio of advanced technology solutions and powerful analytics.
- Solutions should be scalable and configurable with intuitive, efficient workflows to deliver maximum visibility. Providers should be able to explain and show their differentiators, including how their solutions improve decision-making, as well as cost control and predictability.
- Choose a partner with a strong implementation record and experience leading clients through successful change management. An ELM provider with an established history working with clients in your industry will deliver the best results. Ensure that they can help your in-house team, as well as your law firm teams, learn and adopt new ways of operating for sustainable change.
Adopting AI and doing it right
Among the CLOC Southeast Regional Group, the adoption of AI is growing, yet a noticeable gap is forming between those already leveraging AI effectively and those that have been slower in bringing AI into their daily tasks. In companies where AI is widely used by other departments, in legal departments that have dedicated IT resources, or for legal operation leaders who are a bit more tech-inclined, implementation of AI within the legal department almost seems like it flows naturally and swiftly. But for others, there seems to be hesitation and unease with where to start.
Don’t think of AI as an altogether new process or new problem solution. Rather, AI is most effective when added to an already established process to generate increased efficiency or to create a better outcome. Start simple and look for guidance from established technology providers. If you are thinking about ELM technology, some of the areas best suited to explore the benefits of AI include:
- Legal bill review: AI can be leveraged to find patterns in invoices and automatically flag potential billing guideline violations more efficiently than individual line item review performed by a simple rules engine or a member of your legal operations team. This provides more time to dig into block billing and vague invoicing violations that lead to more significant cost savings.
- Total spend visibility: AI can reduce the time and money associated with converting paper invoices (PDFs)into electronic invoice files (LEDES), which in turn provides the ability to have 100% of legal spend available for review and analysis.
- Spend management: AI can create predictive budgets based on past litigated matters, ensuring more accurate spend estimates when new matters arise.
- Vendor management: AI can provide recommendations on the best firm to use for a particular matter based on various factors (cost, past performance, etc.). With these actionable insights, you can be confident you are making the right decision as to which firms to use for your matters.
Paying fair prices for outside counsel
Managing hourly rate proposals with large rate increases remains a significant concern for many legal departments. During my discussion with the CLOC Southwest Regional Group, many expressed interest in using Wolters Kluwer’s Real Rate Report to gain visibility into market rates. If you are looking to improve or change your rate negotiation process, here are some approaches to consider:
- Use benchmarking reports: Leverage comprehensive databases like ELM Solutions’ LegalVIEW® to access industry-wide data on legal fees. This can help you understand market rates and identify where you may be paying higher rates. The Real Rate Report provides detailed insights into prevailing rates for specific dimensions like practice area, city, and firm size, helping you benchmark against peers and uncover lower-cost alternatives.
- Negotiate effectively: Engage in periodic transparent discussions with your outside counsel about their rates and the value they provide, sharing the KPIs you use to evaluate their performance. Consider alternative fee arrangements (AFAs) such as fixed fees or success-based fees to ensure cost predictability and alignment with your business interests.
- Focus on legal engagement: Consider ELM platforms that help promote vendor engagement before the first invoice is posted. For example, ELM Solutions LegalCollaborator can help you make the best law firm assignment decisions by examining firms’ historical performance and even integrate your RFP process with your spend and matter management processes, all in a single platform.
Finding the right technology partner, incorporating AI into legal department processes, and exploring options to tame high outside counsel rate increases are just three of many important themes legal operations professionals are currently grappling with. At any point in the journey, the most important thing a legal operations team can do is to continuously reevaluate how available technology can help you meet your specific legal and business goals.
