As General Counsel continue to navigate the shift toward more commercially oriented legal departments, new technologies are empowering and preparing their legal teams for the challenges this brings. Traditional ELM solutions allowed legal teams to put in place systems of record and administrative processes to ensure outside counsel go paid. However, new Artificial Intelligence (A.I.) and Machine Learning capabilities provide corporate teams with more efficient business processes and a deeper understanding of how they and their outside counsel deliver legal work.
Here are three key innovations we see enabling corporate legal teams to adopt more business processes and behaviors.
1. A.I.-Powered Invoice Review
In a mature legal department that has an established invoice review system and attorney billing guidelines in place, as well as a good relationship with their firms, a significant number of invoices still contain billing guideline violations. You might think it would be between 5% and 10%. It’s much higher. Somewhat surprisingly, over 58%* contain billing guideline violations.
A.I. now reads the individual line items on an invoice and surfaces that data to legal teams. This provides a much more accurate and comprehensive picture of how legal work is being done and what tasks are being charged for. Traditional e-billing relies on lawyers coding lines according to UTBMS. If those inputs are inaccurate or missing, the reporting is misleading.
Through utilizing A.I.-powered invoice review and approval, legal departments can ensure a more comprehensive review of their invoices and save more money on legal spend. They will also gain visibility on how many violations are occurring against their current set of billing guidelines. The key to A.I.’s innovation of invoice review is enabling all of the above whilst still saving legal teams significant amounts of time reviewing invoices compared to current solutions.
2. Changing Billing Habits
It’s more difficult to put in place a cost control initiative with your preferred law firms, who you do a lot of business with than firms you engage less frequently. While this may be counter-intuitive, it would appear that often the better you know a firm, the more they tend to be in breach of billing guidelines**. Perhaps this is due to human nature and the close relationships you may have with your counterparts in those organizations.
From one of our previous case studies with a large tech company, who spend in the hundreds of millions, the number of recurring invoice issues decreased from 17% down to 9% over a two-year period. By utilizing the data legal operations professionals gain from an A.I.-powered solution, legal departments can have data-driven discussions with their preferred firms and collaborate with them to implement improved billing behavior. By providing both the legal department and the law firm with a clear view of billing behavior, issues such as billing for administrative work and internal meetings can be altered over time, resulting in significant cost reductions.
Additionally, improving billing behavior significantly streamlines the end-to-end e-billing process thanks to fewer invoice queries which require human touchpoints on both the corporate and the law firm side. After all, if your law firm submits according to your guidelines the first time, they won’t have to spend time adjusting and re-submitting them.
3. Data-Driven Matter Management
Actively working and managing matters are the bread and butter of a corporate lawyer’s day. Lawyers can be time-poor so capturing data which enables leadership to see if they’re resourcing legal work optimally (in-house, with law firms, or with ALSPs) is very important. However, only 32% of matter data is captured on average in traditional ELM solutions. This is because they rely so heavily on lawyers or law firms to manually enter that data.
Because A.I.-powered ELM systems automatically capture this data when outside counsel submit their invoices, legal departments have 100% visibility of their matters. This provides them with a system that fulfills their day-to-day requirements of matter intake, status updates, and more, but more importantly, it allows them to carry out strategic decision-making with well-rounded and complete data about how previous matters were resourced and the component tasks and activities which were undertaken in those matters.
In another of our case studies, Toll Group immediately had a complete picture of their data, allowing them to drive significant change thanks to comprehensive reporting.
Technological innovations in the legal space, particularly A.I., will provide corporate legal teams with a lot more time to complete higher-value tasks and equip them with fit-for-purpose processes. Additionally, they will have access to large volumes of data that will help senior legal professionals to make more strategic decisions regarding future legal spend. Whether you are enhancing your existing legal operations with technology or replacing legacy systems with updated software, an A.I.-powered platform can provide you with more efficient solutions for reviewing and approving invoices as well as insights into the data gathered for macro-level decision-making.
*According to billing guideline breach data aggregated from Brightflag’s platform.
**According to billing guideline breach data aggregated from Brightflag’s platform.
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