Author: Onit

A History of Legal e-Billing — Part 1: Early Drivers and Barriers to Adoption

Posted on December 3, 2019 by - Enterprise Legal Management

A lot has happened in the world of legal electronic invoicing (or legal e-billing) over the last two decades. The pioneers of the e-billing market were vendors working on behalf of in-house counsel; in the late 1990s, those using legal e-billing software in Europe were predominantly US head-quartered investment banks and insurance companies. This migrated over to Europe soon after, albeit driven by US companies.

In Part 1 of this story, we explore the history of legal e-billing in more detail, highlighting early drivers and barriers to adoption.

EARLY DRIVERS OF LEGAL E-BILLING IN THE USA

The early drivers of the e-billing market remain relevant today. Different companies and jurisdictions are simply at various stages of their e-billing maturity; the early adopters are driving the industry’s developments as they seek even more value from their law firm relationships. Those at the start of their journey will find that these early drivers resonate with them currently. In the early days of e-billing software in the US, in-house legal teams had begun to formally review their legal bills and had laid down billing guidelines and rules for their law firms.

MOST COMMON BILLING ISSUES DURING INVOICE REVIEW:

  • Failure to comply with client billing rules/guidelines
  • Exceeding estimate or budget without authorization
  • Duplicate time charges and the billing of disallowed expenses
  • Insufficient delegation of work, e.g., tasks performed by over-qualified fee earners and excessive supervision.
  • Poor billing procedures, e.g., excessive bundling of tasks
  • Vague invoice narrative, e.g., “document review”

The highly manual process of invoice review transposed into standards and software that required law firms to deliver billing information to their clients in electronic format using a third-party system. This gave the in-house lawyer the tools to analyze billing information and take appropriate action – usually related to saving external costs.

From some early case studies in the United States, this seemed possible. For example, Suzanne Hawkins, former senior counsel of General Electric (GE), said that e-billing saved the company over $1m in legal spend in its first year of use and that any in-house legal department should be able to save more than 15% of its costs by picking up incorrectly charged disbursements and unnecessary time entries. Likewise, Kevin Harrang, the deputy general counsel at Microsoft, said that e-billing helped Microsoft reduce legal costs by $2m annually. PLC’s General Counsel survey in 2007 showed that 10 out of 15 corporate legal departments claimed to have recovered their investment in e-billing within the first 12 months of operation. To this day, e-billing software remains one of the easier investments to prove ROI on due to its ability to save on the bottom line.

While there is no doubt that the initial motivator for e-billing and a formal bill review process was legal spend management, what is clear from the US experience is that the improved quality of data (and, with it, the ability to analyze legal spend across law firms) allowed a much more informed discussion to take place with outside counsel. The result improved spend management, vendor management in general, and value for money.

Against this backdrop, the industry began to see requests for e-billing sent to European law firms. While spend management was a minor driver – law in Europe was not perceived so much of a commodity as in the US – many European corporate legal departments saw e-billing software as an opportunity to refine their legal panels and build a more strategic relationship with their external advisors.

THE INTERNATIONALIZATION OF LEGAL E-BILLING

Legal e-billing software was well established in the US since the late 1990s, but it didn’t begin to impact the UK legal market until about 2003.

In the early 2000s, for many UK law firms, a request from a client to “do” e-billing meant sending a PDF copy of a paper invoice as an email attachment. Those of us in law firms engaged in the billing systems and processes had a big learning curve to undertake before we could even begin to address the actual systems and organizational changes that would be needed. Those with global offices could draw on their colleagues’ experience “across the pond” for some advice and guidance on what this new business process was all about.

The reality was that only a few law firms in the UK had time and billing systems that could support e-billing, and it required a lot of manual work to produce a file acceptable to the e-billing vendor systems. The LEDES 1998B file format was heavily used in the US but did not support the features required for successful e-billing in Europe. For example, there was no support for VAT accounting, multi-currency billing, or cross-jurisdictional transactions.

A group of law firms and corporate counsel – mainly based in the UK – decided to cooperate, and they designed and proposed a modified LEDES format to address these shortcomings. This LITIG (Legal IT Innovators Group) organization was the leader in developing what became the now widely adopted LEDES 1998Bi (international) standard.

LIFE AFTER LEDES 1998BI – ADDITIONAL BARRIERS TO LEGAL E-BILLING

Even after the modified LEDES format addressed international billing requirements and made the work faster and less manual for law firms, there was considerable European skepticism surrounding e-billing.

Even if a corporate legal team decided they wanted to obtain the benefits of legal spend management software and had achieved executive buy-in, budget, and resources to implement, they could still experience significant barriers. Even the most dedicated teams faced mammoth hurdles that prevented full e-billing implementation, resulting in numerous failed e-billing projects in Europe.

In 2007, Caroline Poynton, editor of FD Legal magazine, made this somewhat downbeat comment: “There is much negativity around e-billing systems in the UK; some of it borne out by US experiences, the rest stemming from logistical confusion as to how this can develop smoothly in the UK market without costing huge amounts of time and money. But the fact is that e-billing is unlikely to go away because of the huge potential benefits, particularly for large corporates. In the long-term, firms are going to have to embrace the change and be prepared to make the necessary investment in time and resources to make e-billing work if they want to retain such clients and progress.”

One such logistical confusion Poynton was referencing was how to automate the highly regulated nature of the European legal environment, mainly the rules that apply in the generation of legal bills. This level of regulation of legal invoices does not exist in the US.

One of the main obstacles to full e-billing in the UK was the fact that under the then-existing legislation (Solicitors Act 1974 Section 69), for a law firm to be able to sue a client for non-payment of fees, any bill sent to the client had to be “delivered under the cover of a letter signed by a partner in order for the law firm to be able to sue for costs.” In other words, so that law firms could remain covered in the event of non-paying clients, this Dickensian-sounding rule – redolent of quill pens and crusty lawyer’s offices – was a significant barrier to full legal e-billing. This all changed in March 2008 when Commencement Order No.1 came in place as part of the Legal Services Act, which removed the requirement for a legal bill to be sent in this way and cleared the way for real e-billing to happen in England and Wales.

It didn’t stop there, though, as further statutory/regulatory concerns, such as tax rules, needed consideration. Again, using the UK as an example, many firms produced a legal “bill” and a separate tax invoice. If the “e-bill” were to replicate both documents, these statutory and regulatory issues would have to be satisfied. Firms had to ensure that their e-bills and other information sent to clients and e-billing systems complied with, among others, the requirements of the Solicitors Regulation Authority (SRA), HM Revenue & Customs, Data Protection laws, the Business Names Act and EU billing regulations. Firms also had to ensure that the e-billing intermediary system handled these issues correctly and that the e-bill, as seen by the client, complied with all the appropriate regulations. With most e-billing vendors of the time being US-centric, there were many hurdles to overcome.

As if regulatory and legislative problems weren’t enough, organizations themselves had issues to resolve internally. Such issues prevented widespread adoption in the USA too:

  • Financial barriers to e-billing were common, particularly in smaller corporates and firms. An e-billing implementation was time, resource, and cost-heavy, and this cost continued beyond implementation. Costs of e-billing included setup, licenses, and the resources required to run e-billing from an IT and administrative perspective. Law firms may face billing department reshuffling, overhauling processes (uploading bills and managing queries and rejections), and even investment in other systems to support e-billing, such as practice management systems that could produce matter and timekeeper lists and time recording.
  • IT resources were a luxury not given to most legal departments. The e-billing implementation would join a queue for corporate IT resources and the rest of the business. In-house legal teams frequently found their project pushed back behind more pressing business technology projects. Even after implementation, on-premises solutions require ongoing IT support in maintenance, integrations, troubleshooting, and upgrades to new versions.
  • Change management continues to be a barrier even today but was more widespread when e-billing was new. E-billing fundamentally changed how firms billed clients, and the impact on teams, infrastructure, and processes was huge. As matters would be visible to the corporate client and billing guidelines put in place, it required law firms to be completely accurate with their timekeeping and narratives, right down to the task and activity codes. This data entry level was alien, a drain to learn, and in many cases, extremely manual. On the in-house side, ensuring teams didn’t “bypass” the system to continue managing their matters in the old, manual way was also a significant challenge, and legal leaders could not be confident 100% of the spend was passing through the system accurately.

With many of these vast logistical obstacles overcome by legislation changes and software developments, the last decade has seen more legal departments mandate their law firms to use e-billing so they can better manage to spend, budget accurately, and make strategic matter resourcing decisions. Part 2 explores the changes that have led to widespread adoption of e-billing software and identifies where the industry is headed.

LegalOps Highlight: News, Trends and Legal Technology Vol. 4

Posted on December 2, 2019 by - Business Process Management

The LegalOps Highlight is a bi-weekly blog series that features relevant news, market trends and legal technology updates from the legal ecosystem. The content is curated from legal and business trade publications, consulting and analyst firms, and Onit | SimpleLegal partners, customers and subject matter experts. Be sure to subscribe and follow Onit and #LegalOpsHighlight on LinkedIn and Twitter for updates!

Highlights


The California Consumer Privacy Act: Everything You Wanted to Know But Were Afraid to Ask - 100 Days Out, Part TwoLaw.com: The California Consumer Privacy Act: Everything You Wanted to Know But Were Afraid to Ask – 100 Days Out, Part Two
The CCPA is on its way like a bat out of hell, and just like during the time between GDPR’s enaction and implementation, the uncertainties about the legislation are causing lawyers and law organizations quite a bit of anxiety. In 2019, 15 other states also proposed similar privacy laws, and American companies across the board will have to overhaul their web policies to make it easier for users to obtain an audit from companies about what of their data has been collected and opt out of having their data sold. Just like with GDPR, this new regulation will require companies to get a better understanding of the personal information they’re collecting, and over time this understanding should help any American company employ a more effective and valuable data collection design.


What In-House Legal Looks Like in Russia's 3rd-Largest Bank: A Q&A With Gazprombank General Counsel Elena BorisenkoLaw.com: What In-House Legal Looks Like in Russia’s 3rd-Largest Bank: A Q&A With Gazprombank General Counsel Elena Borisenko
Running the legal department for the third largest Russian bank (by assets) is no easy task, especially because there are countless ingress points where customers’ personal information might be at risk. Leading a department of nearly 300 lawyers, Elena Borishenko has been monumental in integrating her exceptionally solution-oriented department with other business units. Borisenko also expands on her role in creating the International Legal Forum, which has helped departments all over the world collaborate to build the best standards for compliance and regulation.


Bloomberg Law: INSIGHT: An Open Letter to In-House Counsel and Legal Ops Managers—Work With ProcurementINSIGHT: An Open Letter to In-House Counsel and Legal Ops Managers—Work With Procurement
Dr. Silvia Hodges Silverstein (executive director of Buying Legal Council) and Dr. Evelyn Paetsch (Deutsch Bahn AG) are back again with another open letter, detailing how working with procurement department specialists might help your department save more than 15% in legal services and technology costs. The authors assert that even though lawyers are more well versed in exactly the solutions they need, procurement officers can help negotiate rates and save departments millions of dollars. Even though you shouldn’t count on procurement personnel to make the final decision on what products and services to buy, they are trained negotiators and their tactics can save corporate counsel a lot of time and energy that can be better spent managing their departments.


5 Considerations to Make When Shopping for AI Legal TechnologyLaw.com | Legaltech News: 5 Considerations to Make When Shopping for AI Legal Technology
As we’ve spoken about before, AI has more than its fair share of hype around the tools that employ it, and there are some important things to consider. Victoria Hudgens at LegalTechNews shares some insights from Brad Blickstein (author of the Legal AI Efficacy Report) and Deloitte’s AI Ethics survey report which address some of the most formidable concerns any legal operations professional would have about employing an AI solution in their workflow. These tips can prepare any legal organization for the change management that comes with deploying AI solutions and provide a solid roadmap for how AI tools can be used to achieve best results.


2 Recent Publications For Legal Operations ProfessionalsAbove the Law: 2 Recent Publications For Legal Operations Professionals
This week, Mike Quartararo from Above the Law is recommending two recent releases for all legal technology professionals. The first is a paper on processing electronically stored information written by Craig Bell, and the essay is an expertly written piece on the types of data that get processed, the personnel leading the process and the tools used to make the process easy for the everyman in e-discovery. The second is ILTA’s 2019 Technology Survey report, which details legal operations’ shift from on-premises solutions to cloud point solutions and elaborates on some hardware and services used most predominantly by the legal operations industry. Both pieces provide in-depth perspectives on legal technology, and reading both might help professionals get a better handle on industry trends.


Hundreds Sign Petition Calling to Change New Carey Law Name Back to Penn LawThe Daily Pennsylvanian: Hundreds Sign Petition Calling to Change New Carey Law Name Back to Penn Law
In the legal community, prestige is a large concern as the name of the law school on a resume might signal to employers that a recent grad is not an ideal candidate for a job. This concern has come into view as student at University of Pennsylvania’s law school, now named the Carey School of Law after a $125 million donation from the W.P. Carey Foundation, worry that this name change won’t give their education the name brand they believe it deserves. Nearly 500 students and alumni have signed the petition, criticizing the school administration’s lack of transparency and rapid onset of the name change that they feel takes away from their attendance at a highly ranked law school.

What We’re Reading: GCs Using Tech to Prep for a Possible Recession

Posted on November 20, 2019 by - Legal Operations

We all remember what impact the Great Recession had on large corporate legal departments. Like every company unit in a downturn, most legal teams felt extreme pressure to hold down costs. However, our data shows that despite a two-year dip in profits for Big Law partners, rates and hours continued to climb.

That’s why it’s interesting to see the culture shift explained over at Law.com, where Legaltech News reporter Victoria Hudgins describes how corporate legal departments are shifting emphasis and investment into legal data solutions.

“There are many ways we need to be nimble as a law department,” said James Michalowicz, senior manager for legal ops at TE Connectivity. “We need to be lean, and the technologies we’ve invested in allows us to be that way and allows for better positioning when a recession does occur.”

We agree, and we’re here to help legal teams weather any coming storm — recession or not.

Bodhala recently hosted an industry dinner that gathered top lawyers from premier private equity firms. At the dinner, a top PE lawyer with a major asset management firm told us that the cost of their premier firm partners, after years of rate increases, are beginning to be seen by the firms as problematic, even with budgets in the black. These are the best economic times possible for private equity, he said. “When things slow, legal will be viewed as a cost center that must make big cuts.  What are PE legal departments putting in place to get ahead of this so it does not present a corporate risk at that time?” 

We can help.

Bodhala, a groundbreaking legal technology platform created by lawyers to transform the half-a-trillion dollar global legal industry, was born in the aftermath of the Great Recession. While the economic downturn highlighted many needs for immediate cost controls, the advent of big data showed there’s hope to solve for many bad behaviors in Big Law: block billing, unexpected rate increases, lack of timely billing data, and inappropriate staffing decisions.

We recognized then that there needed to be a shift in the dynamic between legal departments and their outside counsel. Backed up by not only anecdotal evidence but with millions of dollars saved by our clients every year, we have already helped move the status quo forward.

Our proprietary benchmarking metrics and rate review algorithms generate detailed insights into every aspect of legal spend. An intuitive dashboard puts the information you need to make more cost-effective decisions about legal service providers at your fingertips, effectively boosting efficiency and reducing your bottom line. 

Contact us today to talk about how we can be that shield for any clouds that may roll in: https://www.bodhala.com/demo-bodhala

Dive Deeper

You might have found yourself thinking outside legal bills are a pain to reconcile. You’re not alone! In the first entry in our series on the legal department of the future, we help you avoid the 3 biggest legal billing problems our clients face.

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Money Moves: Big Law Firms Make Big Investments Into Top Legal Talent

Posted on November 16, 2019 by - Legal Operations

With superstar rainmaker poaching on the rise, clients of Big Law firms must adapt so as to not be left holding the bag for the new normal where “money and data rule” at their law firms.

Over at Law.com, Christine Simmons sits down with elite legal recruiter Mark Rosen, where he talks about the poaching of a top M&A rainmaker and his team from Cleary Gottlieb Steen & Hamilton.

Over the last year, our team has recognized a shift in partner compensation structures, leading to massive payouts to the biggest players at the highest level of Big Law. This trend undergirds a number of other forces driving massive increases in billing rates for premium legal talent. The Wall Street Journal described this phenomenon citing Bodhala data in a groundbreaking deep-dive article earlier this year. Get that story here.

In late October, several sources described the departure of Cleary’s Ethan Klingsberg and his $30 million book of business.

According to Bloomberg, Klingsberg’s work included leading XL Group’s $15.2 billion purchase by Axa, Staples on its $6.2 billion sale to Sycamore Partners, and Google’s $2.9 billion sale of Motorola Mobility to Lenovo in 2014.

Along with him, his new firm, London-based Freshfields Bruckhaus Deringer, picked up a team in a direct move to boost M&A business, hiring on corporate lawyers Pamela Marcogliese and Paul Tiger, and litigator Meredith Kotler.

The new compensation plans will guarantee massive rewards for the team.

“Klingsberg, the rainmaker leading the group move from Cleary, will be much better rewarded at his new firm. He said Klingsberg is guaranteed $10 million a year for at least five years at Freshfields, after making “a little more than $3 million” at Cleary. The other partners moving to Freshfields also got “substantial increases.”

Most notable is what seems to be driving the move. Rosen said he believes Cleary’s “unsustainable” lockstep compensation failed to compete with Freshfields’ desire to pay top dollar for top talent. Per Rosen:

“It’s not a fair system. I don’t believe you can compensate an attorney who is responsible for $40 million worth of business the same way you can compensate someone with $4 million in business. Five years from now or even sooner, I don’t think there will be any pure lockstep firms left.”

Our team recognized immediately that this validated what our data and analysis has been telling us. Today, white-shoe firms are creating new lateral tracks to attract the biggest players — and their Rolodexes. This change has led to massive yearly increases in law firm rates across all levels of experience.

The fact is, partners have no loyalty to the lockstep system anymore. We’re finding that elite lawyers expect to get in the range of one-third of their book in annual guaranteed comp, or more.

This trend has intensified as competition for blue-chip clients heats up. For example, Kleinberg’s move potentially puts the M&A portfolios of elite clients such as Google, AXA, Verizon, Goldman Sachs, Lowe’s, Walgreens Boots Alliance, Square, Stanley Black & Decker, Tiffany & Co., and American Express at play.

What does this mean for purchasers of Big Law talent? Superstars, whose advice is truly gold-plated, will be rewarded handsomely. However, because of the Nobel-Prize winning concept called the “winner’s curse” in economics, firms will inevitably overpay for the few partners out there that have more than a $25 million book. This market incongruity will lead to unjustifiably higher rates passed on to their corporate clients in order to finance the move of the same partner from Firm A to Firm B.

This trend will continue, and the focus on money and data will continue to grow.

Bodhala clients strongly believe that they should not pay more for the same partner who has moved from Firm A to Firm B. We arm your inside legal departments with the tools they need to control unwarranted rate hikes. Your data, powered by our machine learning algorithms, can help you analyze, interpret, and optimize your legal spend.

Our team is eager to work with corporate legal departments to help explain this trend, and how forward-thinking general counsels can navigate through this “new normal.” Our proprietary benchmarking metrics and rate review algorithms generate detailed insights into every aspect of legal spend. An intuitive dashboard puts the information you need to make more cost-effective decisions about legal service providers at your fingertips, effectively boosting efficiency and reducing your bottom line.

Using billing data you already own, we provide:

  • Legal spend transparency through data cleansing and rate card discount normalization to allow comparison,
  • Reporting granularity, based on information from your own data,
  • Rate benchmarking, creating a true price market,
  • Guided counsel identification, and selection.
  • Fit of work: Bodhala recognizes that there is a time when you need the premium firm. Our platform can help you identify those times, and separate them out from when you don’t.

No matter what form a law firm’s partnership track takes, or whatever shifts in the market take place, we know the only true metric is what you can find in the data.

We’re eager to help you understand this new trend. Contact us today to learn more.

Dive Deeper

Some of your lawyers might be superstars, but not everyone can be LeBron James. Check out how our proprietary system can get your legal team’s billing right, every time, with this FREE white paper:

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Onit Honored to be a Deloitte North America Technology Fast 500 Winner

Posted on November 12, 2019 by - Company News and Events

Onit is excited to announce that we ranked #249 on Deloitte’s 2019 North America Technology Fast 500, an annual ranking of the fastest-growing North American companies in the technology, media, telecommunications, life sciences, and energy tech sectors. Onit attained this high ranking by achieving an astonishing 441% growth over the past three years.

“The Deloitte Technology Fast 500 is a list that every company like Onit strives to be on,” says Eric M. Elfman, CEO of Onit. “This achievement is a major source of pride for me, and is indicative of all the hard work of our team members over the past several years. This is a significant milestone for Onit and validates our strategy to be highly focused on our customers, partners and products.”

Winners are selected based on percentage fiscal-year revenue growth over a three-year period. In order to be eligible for Technology Fast 500 recognition, companies must own proprietary intellectual property or technology that is sold to customers in products that contribute to a majority of the company’s operating revenues. Companies must have base-year operating revenues of at least $50,000 USD, and current-year operating revenues of at least $5 million USD. Additionally, companies must be in business for a minimum of four years, and be headquartered within North America.

Over the past quarter century, the Fast 500 program has honored nearly 6,000 companies across North America. Overall, the 2019 Technology Fast 500 companies achieved revenue growth ranging from 166% to 37,458% over the three-year time frame, with a median growth rate of 439%.

Click here to learn more about the Technology Fast 500.

LegalOps Highlight: News, Trends and Legal Technology Vol. 3

Posted on November 8, 2019 by - Business Process Management

The LegalOps Highlight is a bi-weekly blog series that features relevant news, market trends and legal technology updates from the legal ecosystem. The content is curated from legal and business trade publications, consulting and analyst firms, and Onit | SimpleLegal partners, customers and subject matter experts. Be sure to subscribe and follow Onit and #LegalOpsHighlight on LinkedIn and Twitter for updates!

Highlights

Most Innovative In-House Operations Team of the Year: Pure StorageLaw.com | The Recorder: Most Innovative In-House Operations Team of the Year: Pure Storage
Pure Storage has found the keys to scaling efficiency while staying within budget constraints, and that’s why they are the Most Innovative In-House Operations Team of the Year as part of The Recorder’s California Leaders in Tech Law and Innovation Awards. In The Recorder’s interview with Michael Moore and Niki Armstrong from Pure Storage’s Legal Operations team, Moore and Armstrong address how their tools help provide efficient service on a lean budget. Moore and Armstrong also detail their recipe for success and how each of the tools they use are keeping them on top.

There's an Emerging RFP Market and Corporate Legal Is Riding ShotgunLaw.com | Legaltech News: There’s an Emerging RFP Market and Corporate Legal Is Riding Shotgun
The wide adoption of RFP software is inevitable, believes Frank Ready at ALM’s tech desk. Even though lawyers have traditionally approached new technologies with extreme caution, RFP tools have proven themselves to be excellent tools to help lawyers move away from spreadsheets and towards automated solutions that will ultimately make their lives easier. Even though this sector of the legal tech sphere is still in the early adopter stages, RFP software companies have already proven their worth with their reporting and process automation capabilities.

Uninformed or Underwhelming? Most Lawyers Aren’t Seeing AI’s ValueLaw.com: Uninformed or Underwhelming? Most Lawyers Aren’t Seeing AI’s Value
While there is a lot of hype surrounding AI in legal tech, AI solutions are quickly becoming a more viable solution across the legal industry for big data ingestion. According to a new ABA report, lawyers’ top concern about AI is how accurate it completes processes, with some legal organizations being let down by their AI experiences. However, automation and deep learning solutions are proving their worth as they plow through tasks that would normally take extensive resources and manpower to complete. As a result, firms of all sizes have reported adopting AI solutions, proving that the technology should at least be given a deeper look before being cast aside.

Are We There Yet? Reconciling The Hype And Reality Of Legal TransformationForbes: Are We There Yet? Reconciling The Hype And Reality Of Legal Transformation
Service delivery has become a pillar of business development for any successful customer-facing company, and that ideal has put the legal business at odd with the generally inward focused legal profession. While legal professionals set their sights on practicing law and setting the price for their services fairly, the legal industry is metamorphosizing into a multi-disciplinary field that is clearly in touch with its customer service and technological capabilities. According to Mark A. Cohen from Forbes, the business of law is currently surfing a mammoth wave of industry transformation that’s improving customers’ relationships with the legal system.

Penn Law Announces New Future of Legal Profession InitiativeBig Law Business: Penn Law Announces New Future of Legal Profession Initiative
Law organizations have been clamoring for law schools to improve their JD programs to prepare new attorneys for the multifaceted challenges they are likely to face after they get hired, and Penn Law’s new Future of Legal Profession Initiative is a major leap forward. Penn Law now joins other elite law schools such as Stanford Law, Duke Law and Harvard Law with a program that takes budding lawyers through an innovation and entrepreneurship focused curriculum. The new program seeks to answer top professionals’ prayers to guide new lawyers through the enterprise aspects of legal matters and prepare them to better deliver legal services.

Think You're Done Your M&A Deal? Not Until You Can Answer These Data Breach QuestionsLaw.com | Legaltech News: Think You’re Done Your M&A Deal? Not Until You Can Answer These Data Breach Questions
Mergers and acquisitions are already complex matters that take extensive amounts of time to finalize, but data breaches can immensely set these types of deals back. In this article, Phillip Bantz from Legaltech News provides detailed analysis of the risk assessments done by the most data secure companies during their mergers, serving as vital insight for any legal department that’s about to undertake the data of another enterprise. Even if mergers and acquisitions can lead to impressive service delivery improvements, the risk of insider threat is still immense. Use these data breach questions to help your department assess readiness for that risk.

Thought Leaders from Onit and SimpleLegal to Host Webinar on the Future of Legal Operations

Posted on November 6, 2019 by - Company News and Events

Onit and SimpleLegal will be hosting a webinar, The Future of Legal Operations: Market Trends, Change Management and Predictions, November 20 at 12:00 p.m. CST.

As a part of this webinar, legal industry leaders Eric M. Elfman, CEO of Onit, Nathan Wenzel, CEO of SimpleLegal, and leading Legal, Risk and Compliance Analyst, Ryan O’Leary of IDC will present on the evolution and future of legal operations and discuss how chief legal officers and legal operations professionals are digitally transforming the industry with process efficiencies, technology and change management. The webinar will highlight:

  • The rise of the legal operations industry and how legal operations professionals can be agents of change
  • Market trends and the evolving legal technology landscape – and why it is critical for legal operations to be successful
  • The essential tool kit for companies looking to invest in legal operations
  • Predictions for the future of legal operations

Read the press release.

Is Your Outside Counsel Really a #1 Draft Pick?

Posted on October 31, 2019 by - Legal Operations

Firm executives might consider themselves like professional sports teams, stacking the deck with superstars. But can they defend asking clients to pay every partner — every player on their team — as if he or she were an MVP?

Ketan Jhaveri, President and co-founder of Bodhala, shares a take on the modern-day law firm economics. Some people in a firm are that good. But the fact is, not everybody can be a unique once in a generation superstar, so stop pricing them like they are.

Dive Deeper

Some of your lawyers might be superstars, but not everyone can be LeBron James. Check out how our proprietary system can get your legal team’s billing right, every time, with this FREE white paper:

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Bodhala Rate Card Negotiation Series- Part 1: Discover The 7 Steps To Getting The Best Rates on Your Outside Counsel

Posted on October 29, 2019 by - Legal Operations

It’s your not-so-favorite time of year again: it’s rate card season! Whether you are in the legal department or procurement, your frustration level is probably at an all-time high as you manually try to track your legal rates from years prior.  

The truth of the matter is legal department employees poring over data in countless spreadsheets are not going to be able to establish the baseline needed to give the GC a fighting edge in negotiations. There are too many variables for human eyes to process. But there are steps you can take set your team up for success. 

As your team is inundated with rate cards from your outside firms for their new rate cards for next year, there’s a lot of jargon and confusing variables to consider, so we’d like to set forward some guidelines — a cheat sheet — to help you understand the steps ahead.

First, let’s lay out the basic nature of law firm economics: your work over the course of a year can be done by dozens of timekeepers at any one firm and hundreds or thousands across your portfolio. Each of these partners, associates, and paralegals has a different rate.  

While you may look at a blended rate to simplify things, these individual rates matter.  Even at a more general rate card level, a firm typically has ten to fifteen different rates for the associate and counsel level and ten to twelve different partner rates, depending on firm-specific seniority.   

Misunderstanding this rate structure can make it difficult to understand the true rate you’re paying for the work being done from the start. 

On top of that, there are several levels of rates that can change depending on a number of factors, including your history with the firm, the practice areas implicated by a matter, and the internal dates of matriculation for timekeepers at firms. It creates a laddering of rates in a sense. We call it the Hidden Staircase of law firm rates.

The Importance of Data in this Process

It’s hard to overstate how tricky the process of negotiating rates can be. To help you understand where this negotiation starts, think back to how your legal department’s spend has gone throughout the year prior. In every matter, you receive hundreds, if not thousands, of billing line items.

You can look at data points to get a sense of the direction of your spend. While it’s tempting to think that poring through spreadsheets or basic eBilling platforms can uncover a law firm’s tricks, they simply can’t. While these platforms give you, at most, a flat snapshot into your legal billing, there’s a richness, context, and breadth that’s missing. And while legal departments can try and triage in search of a solution for understanding the process, it’s important and far more challenging to dig deeper and get a broader view across your spend.

Our Approach Versus the Status Quo

At Bodhala, the leading tech platform enabling corporate legal teams to analyze and optimize their spend, we unlock the power of your data to help you get a firm grasp on rate negotiations. Most legal departments keep track of billing through spreadsheets and online forms systems, and we know that getting a handle on next year’s rates requires such a level of detail and finesse that it’s nearly impossible for companies to do on their own. 

Part of our power is our unique ability to analyze and explain your spend through data ingestion. Paired with Bodhala’s world-class machine learning data analytics platform, our robust legal billing rate negotiation process helps you get the most granular view on your spend, regardless of matter type or complexity. 

Our Proprietary Rate Card RFP Platform Enables Our Customers To:

  • Simulate future spend expectations against past work
  • Understand the complicated modern law firm economics behind associate and partner matriculation, which adds another dimension of complexity
  • Distinguish discounts at the line-item level versus invoice level
  • Understand how outside counsel has billed for work done
  • Get real, data-backed predictability to manage spend moving forward into next year

In the Meantime

We want to be a helpful guide on this Hidden Staircase toward next year’s legal rates as it exists today. It’s our goal to help give some clarity to these steps and make sure all sides are accountable for their claims and make good on their agreements. This process might seem frustrating, but there are moves you can make to ensure your legal department gets the most equitable and most valuable rate agreement for your money.

We lay out what all these steps mean below, but suffice it to say, some of these rate discussions can get “in the weeds” rather quickly.

Starting the Rate Card Negotiation

We’ve outlined some strategies to use with your law firms as you begin the process of your next yearly rate negotiation. The main focus should be on bringing every step on the staircase to the surface, set terms, and agree to a negotiated understanding of those terms.

Step 1) Rack Rates: Set the Baseline

First, you should ask your counsel to memorialize the currently-in-force yearly actual billing rates to your company, and what their next year’s Standard Rates (“rack rates,” “street rates”) will be. Tip: You should include a statement that “no rate increases will be accepted until there is explicit approval by the client.”

Step 2) Relationship Discounts

Maybe you’ve heard your legal department gets a discount off rack because of a long-term relationship. It’s time to memorialize that understanding: for next year, your outside counsel should provide both the proposed billing rates for your company AND the published rates in their rate card. This enables you to know the current prevailing discount percentage they are providing off of published rates at present, and for what they are proposing for the coming year.

Like what you’re seeing?

Download our free white paper report to learn steps 3-7 on how to understand, predict, and act on every step of the rate card negotiation process.

THE HIDDEN STEPS WE EXPLAIN:

  • Work-Type Discounts
  • Net Effective Rate for Next Year
  • Volume Discounts
  • Write-Offs
  • Your Matter-Based Net Effective Rates

Download The Full Article

Shoot us an email at [email protected], and let’s talk about how to get started.

LegalOps Highlight: News, Trends and LegalTech Updates Vol. 2

Posted on October 25, 2019 by - Business Process Management

The LegalOps Highlight is a bi-weekly blog series that features relevant news, market trends and legal technology updates from the legal ecosystem. The content is curated from legal and business trade publications, consulting and analyst firms, and Onit | SimpleLegal partners, customers and subject matter experts. Be sure to subscribe and follow Onit and #LegalOpsHighlight on LinkedIn and Twitter for updates!

Highlights

5 Ways Law Departments Can Drive Organizational ChangeLegaltech News: 5 Ways Law Departments Can Drive Organizational Change
Change is constant, but managing that change, be it innovation, mergers and acquisitions, or budget cuts is possible and necessary. Kevin Clem, Chief Commercial Officer at HBR Consulting reports his analysis on a recent survey taken at ACCXchange, and his insights can help organizations keep their leadership, communication and goal setting strong in the face of major shakeups. HBR Consulting is one of Onit’s industry partners and we believe these tips can help any company facing major law department changes.

3 Reasons RFPs are the Secret Answer to Your Law Department’s AFA WoesCLOC: 3 Reasons RFPs are the Secret Answer to Your Law Department’s AFA Woes
Law departments have been reluctant to run RFPs because they believe that engaging outside counsel is best for easier and more repeatable matters and not suitable for their more complicated commercial litigation matters. David Falstein, Director of Client Strategy and Success at PERSUIT (an Onit industry partner) argues that part of the reason why firms engage in competitive bidding for these matters is because firms are hungry for them and believe they can produce the most competitive rate, which is ultimately easier than dealing with complex AFAs later in the engagement. At the very least, running an RFP process gives the client important insights about the ambiguity of their projects and has the potential to give clients important leverage on billing to help them save millions on their largest and most complex matters.

Expert Says New European Whistleblower Protections - Leave the US in the DustCorporate Counnsel: Expert Says New European Whistleblower Protections ‘Leave the US in the Dust’
While whistleblowers in the US have come under attack for their recent reporting of alleged political corruption, the EU parliament passed sweeping new protections for whistleblowers, which must now be taken back to member countries to adopt into their own laws. The highlights of the new protections include strengthened protections against retaliation, more support from the EU in legal actions and a shift in the burden of proof to the employer. These new EU laws are reportedly much stronger than any protections or laws set in place in the US and aim to much more effectively protect those working to uncover crime and abuse of power within their organizations.

More Than 100 Law Firms Have Reported Data Breaches. And the Problem Is Getting WorseLaw.com: More Than 100 Law Firms Have Reported Data Breaches. And the Problem Is Getting Worse
If there’s anything your IT departments try to drill into every employee’s head, it’s that anybody is at risk for a data breach, and everyone should be extra careful because malicious actors have a number of ways to compromise your security. In the first entry in a series on data breaches, Law.com staff writers Christine Simmons, Xiumei Dong and Ben Hancock detail how the rising reported number of data breaches signals a much larger data security issue. Hackers are only getting better at identifying which ingress points are the easiest targets for breaching. This article can help you and your personnel wise up on the most common methods hackers employ to break down your information security measures.

The Legal AI Efficacy Interview Series: Jim Michalowicz Of TE ConnectivityAbove the Law: The Legal AI Efficacy Interview Series: Jim Michalowicz of TE Connectivity
AI has been thrown around as a feature of a lot of products made to make lawyers’ lives easier, but if the consumer tech industries have taught us anything, it’s that sometimes the product doesn’t match the hype. In this first entry in a series of abridged interviews presented on Above the Law, Brad Blickstein, publisher of the Legal AI Efficacy Report, interviews Senior Manager of Legal Operations at TE Connectivity about how implementing AI at TE Connectivity helped them reduce cycle time by 67%. The full interview, linked in the article, details TE’s selection process, how they dealt with issues and change management and their next steps in their process.

The Secret to Successful Lawyer LeadershipABA Journal: The Secret to Successful Lawyer Leadership
Leadership is a skill most won’t learn through schooling alone, but it’s no secret that the most successful attorneys and business people have taken a crash course or two. Author Liam J. Montgomery details how feedback is one of the keys to successful leadership and lends us experiences from his days in the US Navy that pinpoint the best ways to give feedback. Ultimately, giving people in your organization the feedback they need when they need it is the most certain way to get the best performance from your whole organization.