Closing the Gap on Outside Legal Spend

May 19, 2020 Sanjay Manocha

Managing outside counsel spend is more difficult than it should be. Corporate legal departments that are under pressure to be more effective have focused largely on explicit billing guidelines and moving towards value-based and outcome-based pricing. Still, they continue to find themselves spending inordinate amounts of time and resources enforcing those guidelines without eliminating the difficult conversations with trusted law firms when they aren’t followed.

While 81% of law departments report that they provide guidelines for billing, only 62% enforce those guidelines, according to the 2019 Chief Legal Office Survey conducted by Altman Weil, Inc. To manage outside legal spending, closing the gap between providing guidelines and enforcing them is critical.

There’s a large gap between billing guidelines and actual compliance. Somehow, as a legal practice evolves and seeks to innovate, this gap persists. Corporate in-house lawyers and staff still spend hundreds of hours annually reviewing invoices to ensure guidelines are followed, and to approve each invoice for payment. This manual review is slow, inefficient and often ineffective. It consumes valuable time, drawing counsel and law departments away from larger strategic objectives.

Introducing Legal Invoice Analytics

This is why Conduent invested in and has developed a new cloud-native solution as part of its legal operations portfolio of services called Legal Invoice Analytics (LIA). LIA dramatically decreases legal invoice review time, especially at the line item level, through the use of cutting-edge AI automation. This enforces good accounting between law firms and their corporate clients, and paves the way for cost-savings as well as a stronger law department/ law firm relationship.

Identifying key opportunities for savings and efficiency

Legal Invoice Analytics is intelligent, so it goes well beyond industry standard protocols to implement any law department’s individual billing guidelines, no matter how nuanced. LIA will automatically flag any non-compliant invoices, alerting the law firm and providing direction on the type of violation, and the opportunity to conform and resubmit for payment. Thus, it closes that gap between good policy, good accounting, and an otherwise uncomfortable conversation, and results in substantial savings on outside legal spend. Also, law firms benefit by reducing the invoice to payment timeline. LIA’s analytics also helps clients identify future cost reduction strategies and implement those into the platform as new or modified billing guidelines.

LIA is easily configurable, incorporating budgets and budget tracking for a comprehensive view of legal spend. These capabilities can help identify matters that are at higher risk of exceeding budget so that both the law department and the law firm can intervene proactively and level set expectations.

LIA also helps ensure that the law firm timekeeper assigned to a particular task is the appropriate person – and at the appropriate cost – for the task thereby addressing a pervasive issue leading to overspend.

On an ongoing basis, LIA provides indirect savings by eliminating much of the law department overhead associated and effectuating faster time through invoice submission, review, approval, and payment. Not only does LIA generate direct savings on outside counsel spend through better compliance, it also provides an analytics basis and sets the groundwork for more intelligent conversations between law department leaders and law firms about sustainable success in partnership.

Learn more here or call us at or call 1-844-ONE-CNDT.

About the Author

Sanjay Manocha, JD, CIPP/US, is Senior Director, Digital Risk & Compliance for Conduent Legal and Compliance Solutions.

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