Legal spend management is an essential process for contemporary legal departments across Asia, focusing on the meticulous review, tracking, analysis, and reporting of both internal and external legal expenses. Typically led by the legal operations team, this strategy involves the deployment of specialized software aimed at enhancing the efficiency of legal departments, closely monitoring expenditures, and identifying opportunities for cost reduction. The ultimate aim is to devise legal spend management strategies that ensure long-term, sustainable savings.
Legal spend management has four main components:
- Legal e-Billing Software: This technology revolutionizes traditional billing processes by replacing paper invoices with digital alternatives, ranging from simple law firm portals for uploading electronic invoices to advanced systems capable of directly processing LEDES invoices from law firms’ billing software. Enhanced with artificial intelligence (AI), these platforms facilitate the auditing of invoices against outside counsel billing guidelines, ensuring compliance and efficiency.
- Law Firm Management: Bridging the gap between enterprise procurement and the unique needs of law departments, this component allows for the seamless integration of law firms into enterprise vendor management and accounts payable systems. It supports the critical selection of law firms, promotes diversity and inclusion, and encourages the negotiation of volume discounts or alternative fee arrangements (AFAs), taking into account the distinctive relationship between in-house and outside counsel.
- Timekeeper Rate Management. This involves a comprehensive review of all legal timekeepers, including their roles, affiliated law firms, legal matters handled, hours logged, agreed rates, and any proposed rate increases. By leveraging industry benchmarks and peer comparisons, legal operations teams can gauge appropriate rates for legal practitioners based on experience, domain expertise, and geographical location, ensuring cost-effectiveness across various law firms.
- Legal Spend Reporting and Analytics: Advanced reporting tools offer the capability to thoroughly analyze corporate law department spending. These tools enable general counsel to navigate dashboards effortlessly, report legal budgets to stakeholders, support data-driven decision-making, and facilitate data export to platforms like Excel, Power BI, or Tableau for further analysis.
In essence, legal spend management serves as a cornerstone of any enterprise legal management (ELM) strategy, particularly in the fast-evolving legal sectors across Asia. To embark on an effective ELM journey, corporate legal departments are increasingly relying on sophisticated legal spend management software solutions. These tools are not only pivotal for reducing external counsel expenses but also for enhancing the overall tracking and management of legal costs and matters, aligning with the strategic goals of legal practices in the region.
About Thomson Reuters Legal Tracker
Legal Tracker is a world-leading legal spend and matter management solution. Legal Tracker provides a collaborative internal and external workspace for world-class spend and matter management, including powerful analytics tools to empower legal departments to anticipate trends, identify risks, and be strategic advisors to the rest of the business. Learn more about Legal Tracker in Southeast Asia here. Get a free demo with Legal Tracker here.
Controls legal costs. Predicts legal spend. Pays for itself.
