Author: Onit

Even many otherwise highly sophisticated CFOs and financial departments have difficulty estimating expenses and doing fundamental accounting and bookkeeping, they need to control costs and keep outside counsel appropriately reined in.

You know it is time for a change to bring your legal billing process up to date. But you face a problem. Over the past several years, many legal e-billing software and billing apps have sprouted up. While you see the value of this kind of software, in the abstract, you are probably overwhelmed by all the choices and concerned about security and safety.

You’re not being paranoid. There are excellent reasons to be concerned. First of all, untested software (or at least software untested for the kinds of billing needs you need to get done) is out there and can expose you and your team to problems.

You want to maintain control of the billing process and avoid exposure to liability risks (for instance, what if billing data somehow got leaked?). Likewise, you want software without superfluous features that could complicate what you are trying to do.

LEGAL E-BILLING: HOW TO TELL IF YOUR BILLING SOFTWARE IS SECURE ENOUGH

Here are some tips for ensuring your data is safe with the legal e-billing application you select.

• Choose a provider that takes information security seriously. BusyLamp is ISO 27001 certified, meaning we have a framework with specific policies and procedures around data risk identification, implications, and control.
• Choose software with an excellent track record. BusyLamp works with many financial institutions, banks, and law firms. Our software helps them comply with complicated regulatory requirements, and we successfully work with institutions with significant data and privacy concerns. We use sophisticated encryption techniques as well as password-protected access to safeguard data.
• Before purchasing billing software and installing it, ask good questions. For instance, how can you protect data and billing information from being vulnerable to unauthorized access, manipulation, or destruction due to a fire or accident?
• Be watchful and systematize data review and backup. Even if the best hacking minds could not crack your systems, you still want to assess your billing statements and processes regularly to identify anomalies or red flags that could indicate problems.
• Avoid using untested legal e-billing solutions. BusyLamp’s scalable software as a service model has allowed us to provide diverse e-billing and fee-tracking tools. Our product is unique in the world of legal expense management.
• Respond immediately if you identify a security issue. A data breach or loss of important information is containable if caught quickly enough. By tracking your billing processes precisely and accurately, you will be able to respond faster if a problem occurs.
• Remember: Encryption is key. To our knowledge, BusyLamp is the only provider that encrypts stored data and not only the end-to-end communication.

Read and bookmark our checklist for more data security considerations.

We would love to understand more about your e-billing concerns and help you find the right solution for your team and budget. Contact us today.

Hiring outside counsel to handle urgent, time-sensitive work (or even ongoing, non-sensitive projects) can be heartburn-inducing, particularly if you must keep your team’s financials in line and reduce costs. Here are five battle-tested tips for ensuring that the money you spend on outside counsel gets spent wisely and that you get an appropriate return on any investment.

1. SET GUIDELINES FOR THE SPEND AND ENFORCE THEM.

Be specific and detailed when you create guidelines. Download “Getting Started with Billing Guidelines” for examples. Conduct record keeping, invoicing, and tracking attorney time and expenses according to strict formulas. This “by the book” approach may seem bureaucratic and even lead to accusations of micromanaging. But budget processes left unmanaged tend to evolve for the convenience of those involved rather than for the greater good of the company or customer. When everyone involved internally and externally understands billing expectations, there will be fewer surprises and less room for overinflated numbers.

2. EXAMINE PAST SPENDING AND BILLING HABITS AND LEARN YOUR LESSONS.

What’s gone wrong when you’ve worked with outside counsel? Examine metrics related to your relationship and conduct interviews with your team to gauge your process’s strengths and weaknesses. Map out how you spend money now (your “as is” budget), and then identify where you want to go. Don’t just harp on the problems; pay attention to what is working well, so you can do more of that.

3. MONITOR TO ENSURE QUALITY CONTROL.

After establishing a billing policy, defining how much you want to spend and for what, measuring your deliverables, and determining how to handle noncompliance, you still have work to do! Next, you must follow up on your process and identify slack and unnecessary constraints. When analyzing, look for duplicated steps, task waste, redundant research done on projects, poor communication, and billing at abnormally high rates for administrative tasks, like proofreading or document filing.

4. IDENTIFY BENCHMARKS TO MEASURE OUTSIDE COUNSEL’S OUTPUT.

For instance, if one firm is billing you at 1.5 times the rate you pay other outside counsel, you want to understand why. Why are you paying this extra amount? Is the spend worth it or not? By benchmarking across your relationships with various firms, you can clarify best practices and enforce expectations.

5. WHEN NEGOTIATING WITH OUTSIDE COUNSEL, FIRST LOOK INWARD TO DEVELOP THE BEST ALTERNATIVE TO NEGOTIATED ARRANGEMENT (OR BATNA).

Maybe outside counsel has been delivering good work but charging a relatively high rate. Before you dive into negotiations, determine in advance what you will accept in terms of a rate and your best alternative if you cannot get that rate. For instance, you might end the relationship, seek new partners, terminate the contract in question, and still do other business.

To control outside counsel costs and manage your business more efficiently and effectively, leverage Onit’s European legal management solution BusyLamp.space unique software. Explore our website for more details or call or email our team with any questions.

Request a demo of BusyLamp eBilling.space.

Whether you task outside counsel with predictable ongoing requirements or you and your team send work out ad hoc, you need metrics to track performance and processes to keep your budget in line and deliverables appropriate.

Developing a systematic approach to performance review can eliminate some financial uncertainty, assist your project managers, and identify key performance indicators (KPIs) to measure efficacy. Good reviews can help you purge, if necessary, or overhaul the process you use with counsel to make it work better and more efficiently.

OUTSIDE COUNSEL MANAGEMENT: THE SECRETS TO GREAT REVIEWS

There is no hard and fast rule regarding your review’s ideal timing or depth. These elements will depend on diverse factors, such as:

• The size and scale of your team. Do you have a Chief Operating Officer or Legal Operations Manager in-house?
• The length and stability of the relationship you have developed. For instance, have you worked with counsel for years and automated many aspects of the relationship, or are you still getting to know one another and trying to figure out how to work together?
• The cycle and timing of the work. Are you engaged in long projects with relaxed timeframes or small projects with tight deadlines?
• Whether you’ve encountered challenges with counsel before.
• Whether you’re working with (or testing out) multiple attorney teams to determine the best fit.
• Whether regulatory or compliance requirements necessitate certain types of reporting.
• The degree to which you’ve solidified your business model. How well do you know what you need from outside counsel? Do you have a clear idea of the ideal relationship, or are you still evolving your business and developing your processes?
• In general, the more problems you’ve had in the past (or you anticipate that you might have, based on experience), the shorter your review timeframes should be. Similarly, the less familiar you are with counsel and your processes and expectations, the more frequently you should conduct performance reviews.

TESTED TIPS FOR MAKING YOUR REVIEWS SUCCESSFUL (AND AS STRESS-FREE AS POSSIBLE, GIVEN THE STAKES):

1. Quantify the expectations of everyone involved. As we touched on before, the more precisely you can identify your KPIs, the easier it is to give feedback. It’s a lot easier to say, “you didn’t meet such and such a number in quarter three” than it is to say, “we are generally unhappy with how you have been communicating.”

2. Solicit internal and external feedback to determine how the performance evaluation process can improve. Don’t assume. Ask good questions. Ask the people inside the process to tell you what could be improved and what works well.

3. Document the performance review process. Even if you’ve worked with outside counsel for a dozen years, and your people know their people intimately, document everything. For instance, someone can quickly fill in if a critical stakeholder leaves. Documentation also lets you improve the process over time. Write down exactly what happens (your “As Is” map). Separately determine precisely how to conduct the review. Then build towards a better process.

4. Use powerful software to automate the review. Explore Onit’s European legal spend management solution BusyLamp eBilling.Space for insights. Our product can help you streamline your outside counsel performance review and strengthen and improve this crucial relationship.

The process of formal performance reviews is not always the most eagerly anticipated part of the work year for most managers and employees. So why should outside counsel or general counsel and their in-house legal department look upon it more positively?

The answer is that, as with a successful performance review system at any progressive company, the process can help nurture and sustain a good, productive working relationship, which in the end, is what both parties desire. It gives general counsel a chance to discuss and confirm expectations; it can reveal possibilities for improving the efficiency or effectiveness of processes through reviewing reports and procedures; and it provides an opportunity for GCs to praise outstanding performance and bring up any areas for improvement.

Some law firms these days are proactively asking to be evaluated, believing that constructive criticism can be beneficial in the long run, and displaying a positive attitude about the process can only help their relationship.

One of the keys to a proper outside counsel review is to make law firms aware of client objectives/expectations and milestones and the metrics used.

OUTSIDE COUNSEL MANAGEMENT PERFORMANCE AREAS

Some suggested areas of performance for review include:

• Quality of work — How does it compare with work performed with similar matters, in similar situations, or by this firm in the past?
• Expertise — Did outside counsel exhibit proper knowledge in such important areas as procedural law and substantive law, opposing counsel, judges, etc.?
• Timing in delivery of work against expectations
• Adhering to the budget and staffing plan — and if there were adjustments, were they discussed with plenty of advance notice?
• Communication with in-house management, including responsiveness and availability
• Outside counsel collaboration, as appropriate
• Results

Some of these performance areas should be monitored during outside counsel engagement as progress unfolds, at regular intervals, or in real-time. This is often when feedback and conversation can make a real difference — and this is where versatile tracking, e-billing, and legal spend and matter management software can provide valuable capabilities for compiling data, issuing reports, and analyzing performance.

The in-house team should also remember that outside counsel management is a two-way street, and the best performance reviews will also consider their performance. For example:

How did the general counsel/legal operations team do in managing processes? How did they partner and collaborate to help deliver value? What part of their performance can be better next time?

As much as they may not want to admit it, some general counsel find themselves thinking that, at times, monitoring and controlling outside counsel activity begins to resemble the proverbial task of herding cats. Fortunately, tracking and e-billing software today can help define, monitor, and control outside counsel spending to gather and guide these cats within the established parameters, with instant notification if one strays outside the lines.

Onit’s European legal spend management solution BusyLamp eBilling.Space offers a Legal Fee Tracker that allows you to establish budgets, staffing limits, and other expectations and then measure the billable activity against those pre-defined totals and milestones along the way. Having access to pre-billing time entries makes it easy to stay on top of how legal spend is progressing on each separate legal matter, recognize potential issues developing, and make corrections before they get worse. Moreover, the updates come in without either party having to chase after the other.

BusyLamp’s Legal e-Billing accelerates the process of receipt and review of billing through automation, efficiently mapping it against your customized guidelines, including fee arrangements, negotiated discounts, spending caps, timekeeper rates, etc. It can capture the detailed billing information submitted by each firm, seamlessly translate manual or LEDES formats into a single form, and then route it to any designated approver. By automatically noting any violations, the software dramatically reduces the chance of error while increasing the review speed, substantially decreasing the support staff time needed to go over invoices.

MATTER MANAGEMENT AND CONTROL

Non-compliance with guidelines isn’t necessarily a deliberate act by outside counsel. Many firms deal with so many clients and differing contracts that it is understandably difficult to completely comply with each guideline. It’s not unusual for law firms to comply with widely varying terms regarding staffing (allocations for different experience levels, diversity requirements, etc.), expenses (including travel and other allowable or unallowed items), and time limitations. Billing software leverages technology to signal when actions are out of compliance, providing a straightforward, non-confrontational method of resolving the matter.

In addition to helping to manage matters and keeping operations running smoothly, the enhanced transparency and detailed information gathering, and analytics also help to set the stage for open and honest communication and collaboration between general and outside counsel. The additional insight provided through analytics can also deliver deep insights into the nature of your legal expenditures, providing a foundation for evaluating options for using outside counsel going forward and such considerations as internal cost allocation.

Compliance and cost-containment are necessary concerns for general counsel. But with a well-considered process in place, supported by versatile software capabilities such as those available from BusyLamp, maintaining a compliant working relationship can become less stressful, more productive, and in the best case, just the expected course of business.

Request a demo of eBilling.Space today and see our RFP functionality for yourself.

Cutting costs is a never-ending quest and topic of discussion for legal departments. Like accounting, HR, or marketing, Legal is viewed as a cost center and often at the head of the line during cutbacks.

Of course, what makes the quest to bring down costs difficult is striving to do so without sacrificing quality and productivity. While there aren’t any magic tricks to make it happen, some tools and strategies are available to support the effort and help evaluate costs at the end of each period and at budgeting time. After all, the flip side of the cost-saving effort is demonstrating that spending has been carefully considered, determined to be necessary, and thoughtfully allocated and monitored.

1. USING LEGAL TECHNOLOGY TO STAY IN CONTROL OF OUTSIDE COUNSEL SPEND

One of the most effective techniques for controlling spend is establishing and adhering to a monthly budget and individual project budgets. Legal Spend Management software can make this task easier and more beneficial by allowing for input of more detailed information and more complex analysis of data without an unreasonable amount of time and resources needed for processing.

Such software can also support cost monitoring (and savings) by automatically flagging any out-of-policy billing that might pop up. Whether it’s an ignored cap on hours or total spend being busted, inappropriate staffing (why is a partner doing work an associate could do?), or charges for services and expenses that are not approved or reimbursable, a modern system can ensure that improper amounts don’t slip through. This is particularly important for fixed fee arrangements; you need to be able to ensure that you are still getting the proper staff attention on your matters and that not everything is going through junior associates and hidden in a fixed fee.

It also provides a good framework for setting expectations for the next project or period, whether in discussions with the same outside counsel or a potential new provider. A thorough report can point to cost savings, spending trends, and budget-to-actual comparisons during discussions between a general counsel and a CEO or CFO. This frank openness leads to stronger, more strategic relationships inside and outside the business.

2. DETERMINE WHO IS BEST QUALIFIED FOR THE JOB

Certainly, one of the most significant factors in cost control for a legal department is work allocation. Who is the best person, team, or firm for the job? It’s always a matter of assessing the matter and making the cost/benefit decision.

Whatever it takes: For some cases, there’s no alternative to top-dollar outside counsel with the experience and expertise to provide the best support possible in a critical matter. You need them on board, whether it’s the broad range of talent or the niche specialists they can provide. The key, then, is to provide clear parameters upfront regarding scope and expectations — and delegate support tasks as much as possible, to lower the cost-alternative resources.

Second tier: Some cases don’t justify the costs that come with the largest law firms. It’s not a “must-win” for the organization or a relatively straightforward matter with settlement in sight. There’s a reason that smaller firms exist, and it’s essential to utilize them wisely.

In-house option: Insourcing, when possible, is an obvious way to reduce outside counsel spend if the proper resources are available. Unbundling to leverage technology and in-house personnel is commonplace and the intelligent way to do business today, even if it wasn’t the case historically.

Expanding in-house capabilities: There may come a point where the volume and consistency of work requirements indicate that hiring additional resources will be the most cost-effective action. Make this decision when clear data, such as through Onit’s European legal spend management solution Busylamp eBilling.Space legal dashboards, demonstrates a need for particular in-house options in the future.

3. CONTINUOUSLY MONITOR AND MANAGE QUALITY

If you have instructed new law firms or implemented different billing rules for your existing panel, you want to be sure the quality of work and advice you receive stays consistent with the norm.

Modern Legal Spend Management solutions provide surveys or other similar functionality, providing reliable metrics that provide insights to your in-house team for review. This allows them to score and evaluate firms and make data-driven, informed decisions that ensure you get the most value for your money — and secure your return on investment.

Additionally, Legal Spend Management solutions allow you to track the outcome of cases and how compliant a firm was with your billing guidelines. This is a key advantage for budgeting, reporting, and spending. Having proven, verifiable data about law firm performance allows you to make an internal case for spending more on expert counsel when only the best will do. The key is not to reduce costs for the sake of it but to control costs and get the best value for money.

Request a demo of eBilling.space today. 

With an eye toward budget predictability and managing risk, more and more legal departments are looking for opportunities to implement alternative fee arrangements (AFAs) with outside counsel as an element of legal spend management.

While there was a time when any arrangement outside straight billable hours was uncommon, even unheard of, a greater number of outside counsel firms are now open to AFAs. The issue, therefore, has become one of structuring the best fee arrangement for the situation: one that both parties will agree to align to the goals and financial requirements of each and is based upon accurate historical data that gives the legal department confidence that the arrangement is intelligent and appropriate.

INITIAL CONSIDERATIONS

There are numerous types of alternative fee arrangements utilized these days. Still, before deciding which might be most suitable given the circumstances, it is wise to consider the engagement in terms of actual value to the organization and the desired outcome. Is it a “win at all costs” matter or something much less critical in the big picture? Is compromise an option? Is any future relationship with the opposing party involved a non-issue, or does it involve an entity with whom you will need to continue to conduct business for many years to come? Both internal and outside counsel need to understand the situation clearly.

These factors can immediately help decide which is the best outside counsel firm to perform the work if there has been any doubt. It can also lead to the legal department and outside attorneys then analyzing the situation upfront to seriously consider the best approach to achieve the desired goals cost-effectively, beyond simply the appropriate staffing level.

ESTABLISHING THE ALTERNATIVE FEE ARRANGEMENTS

Trying to get work done for less money is not necessarily the sole — or even primary — reason behind opting for AFAs. The legal department may be looking for predictability and to simply keep costs from being open-ended, or there may be interest in allocating costs in a particular fashion, or to giving outside counsel reason to assume greater ownership regarding costs, or to divide the risk so that outside counsel assumes at least some of it. These considerations can drive the decision regarding which type of arrangement is preferable.

In any case, having relevant data to base the pricing on is critical. In the best case, legal spend management technology can provide budgeting, performance, and billing information compiled from previous engagements involving the same outside counsel and/or similar projects involving other firms. There is no reason to go with a “gut feeling” when concrete data is available to guide you with specific measurements.

With that information providing insight, there is a much greater likelihood of arriving at a “win-win” fee structure — where both parties are agreeable and excited about the arrangement and will not second-guess the project as work progresses.

Many types of alternative fee arrangements can be successfully deployed between inside and outside counsel: fixed fees for the entire engagement; phased fees, with a fixed fee for each segment of a project; value-based fees, where an hourly fee gets augmented by a sum to base upon the favorable or unfavorable outcome of the matter; contingent fees, in which outside counsel gets paid only if its work leads to a financial recovery (in which case it would receive a percentage of that total amount); or a blended hourly rate (for all timekeepers or by category).

But the key is ensuring that you are entering the discussion from a well-informed position. Variables and unforeseen circumstances can arise during an engagement, but having historical data from spend management tools to point to when structuring a new alternative fee arrangement can make both parties feel better about it from the outset.

Request a demo of BusyLamp eBilling.space.

Ask any general counsel what keeps them up at night regarding outside counsel management, what frustrates them, or what makes them want to fire a firm. You’re likely to get some variation on this: unmet expectations.

General counsels are working in a fast-paced world of change, with increasing regulatory complexity and compliance challenges, focus on risk management, and ever-present cost constraints. They want efficient, dependable service from their outside attorneys – and they don’t always feel like they are getting that.

HERE ARE A FEW OF THE SERVICE AREAS AND CHARACTERISTICS THEY VIEW AS MOST IMPORTANT FOR OUTSIDE COUNSEL TO DEMONSTRATE:

• Be responsive. Being attentive and available at a moment’s notice — or at least within several hours — and excited about the opportunity to serve shouldn’t fade away after the contract is signed.
• Respect the budget. The budget is there for a reason. Discuss anticipated departures from the agreed-upon plan as soon as feasible. In billing, accuracy, transparency, and compliance with guidelines are expected and critical to working relationships. Inevitably, there are times when the scope increases and the staffing for outside counsel must expand to accommodate the new requirements. But that shouldn’t mean that there will be an unpleasant surprise waiting to be sprung months down the road: Timely communication can allow for a discussion of developments and restructuring expectations regarding staffing and billing.
• Understanding the business. General counsel expects outside attorneys working for them will know the industry, its complexities, culture, and current trends.
• Utilizing technology. Outside counsel should be comfortable using basic technology and proficient at leveraging the latest developments to provide the most efficient, effective service they can per billable hour.
• Be fair, ethical, and responsible. Staff the work appropriately and don’t try to milk a project for more than it is worth.
• Make it a good relationship. This is less important for a one-off project. Still, it is impossible to undervalue the benefits of a long-term, productive professional relationship of trust and mutual respect.

HOW BEST TO HELP THE RELATIONSHIP FLOURISH AND HANDLE THE TASK OF OUTSIDE COUNSEL MANAGEMENT? HERE ARE THREE KEY WAYS:

• Communication. It’s a simple concept that is sometimes difficult to execute. Nevertheless, it is a critical investment in time and effort; too often, a simple lack of communication or a missed message leads to a major problem easily avoided or more effectively managed with a timely phone call. And remember, the phone works both ways — it’s not entirely the responsibility of the general counsel or the outside firm to initiate conversations.
• Technology. As mentioned earlier, leveraging technology is essential for outside counsel to deliver state-of-the-art efficiency. It’s also a way for general counsel to manage the relationship, through real-time e-billing monitoring and collaboration software, for example. It’s a sensible way to track current projects and leverage information to make informed decisions in the future.
• Mutual respect. If outside counsel is performing admirably, saving money and/or producing exceptional results, they need to be applauded (or rewarded) and, over time, given the appropriate display of earned trust. Similarly, outside counsel should conduct business as if their purse strings were controlling the budget and that the client’s success is their ultimate goal.

Communication and mutual respect are a matter of professional behavior. On the technology front, if you’re a little behind the times, Onit’s European legal spend management solution BusyLamp eBilling.Space can show you how software can be a key team player in collaboration, efficient operations, compliance, and outside counsel management.