Category: Legal Operations

With mission-critical legal matters in play, it might seem easier to “deal with it later” when it comes to data or budget management. But with companies expecting their legal departments to do more with less, legal spend management software can deliver the tools and data you need to maximize every dollar and improve collaboration across departments. Actively managing your spend – from firm selection to staffing and invoice review – is no longer a nice-to-have; instead, it’s a necessity for modern corporate legal management. 

At Onit, we often see corporate legal departments invest real money into eBillers with the intention of simplifying bill payment and supporting data-driven insights. While eBillers are great for paying invoices, they are not purpose-built for providing sophisticated analytics, let alone surfacing actionable insights. 

But what exactly should you expect from your legal spend management solution? Here’s just a few of the challenges the ideal software should immediately resolve: 

1. Garbage-In, Garbage-Out

One of the core challenges our users often have when trying to extract insights from their eBillers is data quality. This isn’t usually a problem with the eBiller itself; the problem comes with the data fed to it. Missing or inaccurate data leads to misleading reporting, which can result in inaccurate conclusions and poor decisions. This is sometimes referred to as “the garbage-in, garbage-out” dilemma. 

A good legal spend management platform shouldn’t just crunch your numbers – it should clean them first. Cleaning and enhancing your data, and then restructuring it into a healthy data set produces the accurate reporting and meaningful insights you need it to deliver. A foundation of cleansed, structured data is essential. It’s the basis for the value of your analytics, and the decisions about how to best deploy your spend.

Think you don’t have this issue? Think again. Even the most sophisticated legal departments suffer from bad data. Onit processes tens of thousands of data corrections and enhancements every year – per customer.  

What to look for: You don’t need a tool to just house your data; you want your data to be processed, cleansed, and enhanced. To do that, it needs AI and machine learning. Without advanced technology, it’s impossible to cleanse data at scale.  

2. Uncontrollable Annual Rate Increases

Your law firms might claim that you’re getting the best rates available, but can they prove it? 

To get the best, market-appropriate rates, you need market data. That means benchmarking. Benchmarking is a critical part of any good legal spend management system. However, it can’t just be routine benchmarking. The system you select needs to provide  smart benchmarks. 

So, what is a smart benchmark? Well, you wouldn’t compare the rates for an associate at an insurance litigation firm with the partner rates at a top tier antitrust litigation firm, right? Neither would we. 

Make sure the software you select can provide benchmarks that drill down across key attributes like practice area, matter type, and timekeeper level (among others). The software should be smart enough to know which firms play in certain specialties, and to understand that there are tiers within specialties. For example, across specialties, there are “challenger” firms who may have just as much experience, but whose value proposition is to charge less to gain clients from the marquee firm brands. Your system should be smart enough to consider all the above and more when benchmarking. 

What to look for: Good legal spend management platforms provide contextually relevant benchmarks, ensuring you compare only similar firms for similar matters. Make sure the software you select not only understands the basics (like timekeeper levels and practice areas) but experience as well. You might be better served going to a smaller regional firm for certain types of matters, and your benchmarks should help you identify those opportunities. 

3. Mounting Pressure to Optimize Spend and Allocate Budget Wisely

The business world’s focus on cost-cutting efforts shows no sign of slowing down. As organizations search for more places to optimize, the legal department is in the direct line of fire. But optimizing legal spend isn’t as simple as finding less expensive vendors. 

A good legal spend management software will solve this problem. Just like other business verticals, legal can use data to identify optimization opportunities; usually those opportunities take the form of improving work allocation. 

Analytics are key here. However, it’s more than just reports. Your legal spend management system should not only provide reports on how work is allocated but insights and recommendations on where allocation can be improved. 

For example, you may not need to send every M&A matter to your marquee firm. Or your go-to firm for most matters in a certain practice area may not be allocating tasks appropriately (no one wants a partner doing depo prep, for example). 

What to look for: Effective tracking and reporting are a great start, but your legal spend management software should not just provide great analytics about how work is allocated. From firm selection to task allocation, your software should also provide actionable insights on how you can improve that allocation. 

4. Inability to Effectively Analyze and Compare Law Firms

What’s the best way to compare your law firms? Until recently, true analysis has been tough. From the lack of hard data to the historical “old boys club” nature of the industry, real analysis has often been placed on the backburner in favor of relationships and market reputation.  

Even if you have put together an all-star panel, how do you evaluate your panel firms on performance or rates? How do you know who will provide the most value for the dollar on an upcoming matter while maintaining best-in-class outcomes? 

A good legal spend management software is (once again) key. Advanced legal spend management software should not only provide market benchmarking, but also allow you to benchmark your panel firms against each other. Strong reporting is important but purpose-built report cards are better. 

Firm report cards should provide visibility not only into the “official” panel firms, but also on any firms you may have used for similar matters. They should include comparisons to the other firms in the panel. For example, on average, how much more or less are a certain firm’s partner rates than the panel’s overall average partner rate? What about average hours billed per matter? Or average matter cost in specific practice areas? 

A good firm report card isn’t just useful to you – it’s also useful to your firms. Sending a report card on a regular basis that provides aggregate comparisons to your other firms doing similar work (panel or not) incentivizes better behavior, tighter rate control, and attention to detail. 

What to look for: Look for software that makes it easy to not only benchmark the market, but also allows you to compare your current panel of firms. The best legal spend management software will carefully package up those benchmarks into convenient report cards that can be shared with your firms on a regular cadence. This is not only convenient for you, but it’s also a powerful tool for tacit management. Sharing firm report cards on a regular basis will ease potentially tough conversations by giving you a factual basis for your discussion. 

So, what’s the takeaway? Everyone, from CFOs to board members, is demanding accountability and transparency on how every dollar is spent. That means actively managing your outside legal spend is more important than ever. 

But you can’t manage what you can’t measure. As data plays an increasingly indispensable role in managing your legal spend, best-in-class legal spend management software is no longer a nice-to-have — it’s a must-have.  

Most corporate legal departments needed legal spend management software yesterday! Time is money, and the more time you go without leveraging sophisticated legal spend management software, the more money you’ll see drained from your bottom line.

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Get in touch with our team of legal spend management and data experts to find out how Onit can transform your legal department.

Check out Bodhala CEO, Raj Goyle’s, latest feature in Bloomberg Law on how in-house teams can leverage data to identify opportunities, navigate strategic decisions, strengthen outside counsel relationships, and run their legal departments like a business.

Reproduced with permission. Published May 2021. Copyright © 2021 The Bureau of National Affairs, Inc. (800-372-1033) www.bloombergindustry.com.

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

Your law firms might insist that you’re getting the best price they have to offer, but can they prove it? Corporate legal departments are routinely overcharged by outside counsel. With limited access to price discovery, GCs are often stuck without the data they need to effectively benchmark rates, AFAs or other pricing structures.

Bodhala recently partnered with Buying Legal Council to lead general counsels, legal procurement, and legal operations professionals through an insightful discussion on how to leverage benchmarking data to secure a fair market price.

The discussion – fueled by an all-star panel including Bodhala CEO, Raj Goyle, Citi’s Director of Outside Counsel Management, Chris Ochs, and MetLife’s Director of Legal Procurement, John Smith – took attendees through:

• The current challenges surrounding law firm benchmarking
• The implications of bad data
• What metrics really matter when evaluating law firm rates

Check it out!

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

eBillers facilitate payment for legal services. They’re great at paying legal bills but were not built to support data analytics – forget actionable insights.

Bodhala is not an eBiller. Bodhala is purpose-built for legal spend analytics to deliver strategic insights and actionable benchmarks so you can better manage your firms and optimize your spend.

But here’s the headline: You save more with both.

The Bodhala Difference: Hercules

eBiller data is very raw – unstructured, chaotic, and impossible to use for accurate comparisons and analysis.

Bodhala’s proprietary machine-learning engine, Hercules, automatically cleanses and organizes your data, filling in gaps and creating alignment across your entire spend.

The result is a clean, apples-to-apples data set that can then be augmented with engineered and 3rd party data to deliver everything from internal and market benchmarking to RFP optimization.

Future-Facing Insights

eBillers use historical data to impact how you pay invoices. Bodhala uses historical data, along with machine learning and 3rd party data to deliver actionable insights and a holistic view of your legal spend.

From optimizing your rate negotiations to firm selection and management, Bodhala’s actionable insights help you shape the future of your firm relationships with informed, strategic decisions.

Granular, Apples-to-Apples Analysis

A restructured, easy to analyze data set means you can compare anything from staffing and partner hours to rates and diversity across firms, practice areas and matter-types.

Bodhala also lets you deep dive and compare individual matters, timekeepers, and even do task cost analysis – unlike your eBiller.

Benchmark Against the Market

Bodhala’s Hercules engine uses machine learning and 3rd party data to benchmark your firms against relevant competitors for similar types of work,. The result is truly valuable ammunition to start rate negotiations with your existing firms or make informed decisions on new firms for your panel.

eBillers also don’t leverage 3rd party data or machine learning, leaving you without any true market intelligence.

ROI Calculation

Without a sophisticated rate tracking system, eBillers can’t project how a rate change will impact your overall spend.

Bodhala’s comprehensive rate tracking system and Savings Calculator accurately projects how broad rate card changes, as well as how minor changes impact your spend. Don’t be afraid to get granular – even an associate rate at a specific firm in a specific practice area can have a significant impact.

Improve Processes & Outcomes

Bodhala not only streamlines the RFP process for rate cards and individual matters. We also help you optimize the outcome.

By providing you with key metrics to inform your decision-making process, Bodhala is a critical partner for effectively selecting and managing outside counsel.

Invoice Review vs Guidelines Analysis

eBillers do simple invoice review, helping identify rate inconsistencies and block billing.

Bodhala takes a holistic look at your guidelines and can identify the simple inconsistencies, as well as an extensive set of other guideline issues from overstaffing meetings to excessive partner hours.

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

We’re excited to share that Built In NYC has recognized Bodhala on its list of 21 NYC Companies to Watch in 2021. Designed to highlight New York City’s growing technology sector, Built In NYC’s list recognizes innovative and growing companies that are making waves in their respective industries.

It has been one year since we announced our $10M growth investment led by Edison Partners and this recognition from Built In is a true testament to the growth and success we have experienced over the past year. 

We’re proud of our team here at Bodhala and we’re excited to continue driving innovation and transparency within the legal services market. 

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Interested in joining our high-performing team of smart, scrappy thinkers and doers? Check out our open positions.

By Bodhala CEO & Co-Founder, Raj Goyle

Earlier this month, I had the pleasure of sitting down for a conversation with Justin Kan — serial entrepreneur, co-founder of Twitch, and Silicon Valley darling — on a recent episode of Nasdaq’s hot, new World Reimagined podcast. 

Spending this time recording with Justin got me thinking about Atrium’s journey, its downfall (Justin shared a terrific self-analysis of key learnings), and how its efforts related to our mission at Bodhala. As a legal tech CEO navigating the extremely nuanced world of legal services, I wanted to share some thoughts on Atrium’s rise and fall. 

It’s no secret that the legal industry is a laggard on the technology adoption curve. 

But that’s rapidly changing.

The legal services market is a half-a-trillion dollar global industry. Like any massive market, opportunity, disruption — or transformation — is inevitable and is finally starting to take hold. And along with innovation comes investment. More money has been invested in legal technology companies in the last year than ever before — and things are just beginning to heat up. 

That’s why it’s no surprise that Justin started Atrium. He saw an obvious problem — law firms are incredibly inefficient — so he set out to create the “law firm of the future”. A hybrid of technology and technology-enabled services, Atrium would tackle inefficiency while delivering the level of service expected from top-tier lawyers. 

His history of success drew big-name investors like Andreessen Horowitz to his vision, landing Atrium $75M+ in funding by 2018. Fast forward to 2020: Atrium closed its doors for good. 

With a world-class leader, $75M in funding, and an industry seemingly “ripe” for disruption, it seemed to be “all systems go” for Atrium. So what happened? Why do some legal tech startups fail, while others succeed? 

Price Isn’t Everything

The legal services industry is a unique beast. While price is always important to some degree, it’s not as big of a determinant for corporate clients as you might think. Aptly dubbed an “old boys club,” in-house lawyers often source their law firms the same way they picked their kickball teams in elementary school — by choosing their friends (often law school buddies or old law firm colleagues).

This presents a unique barrier to entry. Moving from a relationship-driven selection process to a price-driven selection process can be a major hurdle, requiring buyers to change how they think about not only the procurement process but also the value of the service.

While Atrium’s services and its fixed-fee business model were appealing to its target market, it focused on a practice area that was already relatively commoditized. Startups never had money to burn, and law firms had long been forced to price competitively in order to win business. 

Much like investing in a startup, many firms would give “bargain-basement” rates to get in early with potentially large, long-term customers. In this particular market, there is not a lot of wiggle room to undercut on price, which forced Atrium to set rates at almost a loss in order to be truly “competitive”. Atrium hoped its margins would improve once it could automate some of the lawyers’ tasks, but maintaining a team of lawyers proved to be expensive. The more clients sought out their low-cost services, the more money Atrium lost. 

While undercutting on price is a fair strategy for new businesses to gain traction with customers, it’s not sustainable for long-term growth. When it comes to legal services, corporate clients prioritize expertise and value over the price tag. Their focus lies on finding out the level of value delivered at that price and whether or not they could find equal or better value elsewhere at a lower cost. 

But the opacity of the legal services market and the complete lack of price discovery have made this nearly impossible. That’s why data is a critical piece of the puzzle. 

Data is Key

Legal services are not a commodity product. There is a finite amount of work that is routine enough to be simplified through automation. Atrium looked to become the technology-run law firm of the future, but its maniacal focus on simplifying and commoditizing services failed to recognize the nuances of the services themselves.

When it comes to legal tasks, everything is not always what it seems. Tasks that appear similar at face value can be drastically different in execution, resulting in the “same task” taking 10 times longer to complete in one matter than in another. For example, a task performed for an M&A-related matter might require more expertise than the same task performed for a litigation-related matter, thus making it more time-consuming and expensive. Without extensive, structured legal billing data, it’s impossible to truly identify like-tasks or average time or cost.

Atrium ultimately under-priced its services because it likely didn’t have the legal billing data necessary to appropriately model the costs. As a result, the business’ prices were set so low that it could not even cover its margins. 

Pricing is complicated, but data is key to success.

Knowledge is Power

Legal billing data is a beast. Cleaning and structuring it is tough and so is building up a critical mass of data to even glean insights from. But it’s a crucial step in understanding the minutiae of legal services. Without it, you’ll succumb to the nature of the beast. 

When it comes to legal services, corporate clients prioritize value over price. However, value cannot be measured effectively without data on your side. And as we’ve learned from Atrium, data can play an influential role in determining whether a startup sinks or swims. 

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

In today’s economic climate, companies are increasingly focused on optimizing both internal and external resources; Legal is no exception. From simple spend visibility to cost control and efficiency, modern legal spend management solutions are helping forward-thinking General Counsels make more strategic, data-driven decisions about how they invest their outside counsel spend.

But what benefits can you expect from your legal spend management system? Let’s break them down here: 

1. Better Strategic Decisions Driven By Data 

When it comes to managing your outside counsel spend, everything (and we mean everything) starts with your data. 

Legal billing — from getting rate visibility to discount clarity — is complicated. For example, your rate card and the effective rates you actually pay may be very different. Understanding that (and many other aspects of your bills) is critical to effective budgeting, forecasting, and strong outside counsel vendor management. 

Knowing your numbers like the back of your hand won’t only help with budgeting or operational efficiency. Data will also help you make better, faster decisions. For example, which firm in a panel is most efficient for certain matter types? Are you overpaying because of inappropriate staffing decisions (e.g., partners executing associate level tasks or consistent meeting overstaffing)? 

Fast access to trustworthy data that can be sliced and diced to support your business’ specific needs and your specific questions will not only save you and your team time and money, but it will also give you the fuel you need to quickly make truly informed decisions. 

2. Clear “Should Cost” Understanding

What should that big matter you have coming up actually cost? It’s a question GCs and finance departments ask themselves all the time, with little success. RFPs are often wildly off when it comes to predicting costs. It’s common for a matter to cost 150-200% of the firm’s original bid. So, what’s the best way to anticipate what a big upcoming matter will cost? 

True, market-driven benchmarking is the only way to not only anticipate more accurate costs for upcoming matters, but also to obtain the most competitive rates or AFAs. 

However, benchmarking can be tricky. Make sure your benchmarking solution considers practice area, matter type, and tier of firm. For example, you can’t compare complex real estate litigation with standard insurance claims litigation. You also can’t compare insurance claims litigation costs for one cause of loss with another, or from one jurisdiction to another. So, make sure your benchmarks allow you to get granular; anything less can leave you holding the bag on a very big and unexpected bill! 

3. Better Governance 

Managing your outside counsel firms can be challenging. Just enforcing guidelines accountability is not only time consuming but can also be like finding a needle in an intentionally large haystack. Even getting visibility on their staffing practices can be tough. 

Modern legal spend management software can remove the headaches of guidelines compliance and provide much-needed visibility on staffing and billing practices for both you and your firms. Some solutions provide easy-to-use firm report cards that show trends over time on everything — average hours per matter, timekeeper breakdowns, rates, and more. When shared with your firms, report cards provide a fantastic basis for effective management; many forward-thinking GCs use them to drive quarterly or biannual reviews. 

4. Clean, Structured, Usable Data

Data can provide a window into performance, highlighting meaningful opportunities for improvement. Most successful businesses have leveraged data for years to inform strategic decisions as well as operational efficiency – but not so much in legal departments. 

Legal billing data is a necessity to understand all aspects of success. However, historically, legal billing data has been a mess (to put it mildly). With no standard taxonomy (way of organizing data), copious human error, and unique domain challenges led to a web of tangled data that in most cases just didn’t line up. With no apples-to-apples comparison possible, data often led to misleading takeaways and potentially poor decisions. 

But, never fear. Advanced legal billing software can help you make sense of your data. By leveraging new technologies like machine learning and AI, cutting edge legal billing solutions can not only structure the data you have but also correct errors and enhance the data to allow for deeper insights. 

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Get in touch with our team of legal billing and data experts to find out how Onit can transform your legal department.

Bodhala CEO, Raj Goyle, recently joined Legal Tech Startup Focus podcast host, Charles Uniman, to discuss his journey to becoming a legal tech startup founder, the current issues plaguing the legal services marketplace, and how data is transforming the legal industry.

“In the law, the buyer of legal services has none of the five key attributes that the buy-side deserves to have — price discovery, innovation, data, competition, & accountability to the sell-side. The entire legal system in America is set up for the benefit of the law firm vendor.”  — CEO, Raj Goyle

Bodhala’s mission is to create a transparent market for legal services. Using data to illuminate price discovery, we can drive competition and innovation not just for buyers of legal services, but for the entire industry.

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

Aspirin can’t fix these, but data can!

It’s no secret that legal bills are notoriously opaque and hard to understand. They can be incredibly frustrating, often subjecting in-house teams to countless hours of interpretation as they seek to clarify everything from inaccurate tagging to misapplied or missing discounts.

Here are the three most common legal billing headaches and tips for how to avoid them:

1. Inconsistent Discount Application

When it comes to invoicing, law firms don’t make it easy to understand if you’re actually paying the rates you agreed to during rate card negotiation. Discounts are often at the heart of the issue. Frequently applied inconsistently, discounts can make it a real challenge to identify the difference between gross rates versus net rates versus write-offs. 

While one firm might apply line item discounts, another might apply a bulk discount to the entire invoice. Clients are often left in the dark in terms of understanding when – or even why – these discounts are applied. Compound that with the fact that most in-house teams don’t have a real-time view into their actual rates with each firm – so forget visibility on the agreed discounts by practice area for each firm! 

Pro Tip: Require street rates, relationship discounts, practice area discounts, and write-offs to be broken out in each line item. This will prevent inconsistencies and the fuzzy math that might make a partner at a cheaper firm more expensive due to discounts being applied at the invoice level. Additionally, line item discounts will help you clarify your effective rates by allowing you to calculate the impact on a more granular basis, say by practice area or timekeeper level. 

Example:

2. Unstructured Data & Inaccurate Tagging 

Taxonomy, or how things are organized into categories and hierarchies (or in this case, not organized!), is foundational to any kind of data analysis. For example, whether a cardiologist conducts a heart catheterization in Phoenix or Seattle, it’s coded and organized the same way for any insurance carrier. 

Unfortunately, there is no universally accepted taxonomy for legal matters, and legal departments and firms can vary widely in how they organize matters. This concept is often referred to as “garbage in, garbage out”.

This is often the reason for the huge discrepancies between rates from firm to firm in what appears in legal spend reporting to be the same practice area. Aside from being just plain confusing, the resulting communication gap has created a systemic issue that makes it very difficult to confidently compare one firm to another — even when the data is telling you that the matters are similar. 

Pro Tip: Create a framework that accommodates the majority of your legal matters. Make it simple and try to apply it to every invoice you receive. A standardized matter taxonomy, coupled with accurate tagging, enables the critical apples-to-apples comparisons you need to confidently analyze everything from your rates to staffing. Plus, this will lay the groundwork you need to prove how valuable the data can be in everything from rate negotiation to invoice review automation. 

3. Missing Data & Absent Tagging

Another consequence of not having a standard taxonomy is how easily things can be missed. For example, let’s say you want to find out the effective rate by firm for all of your complex litigation matters from last year. If all your matters aren’t tagged properly as complex litigation, you might end up with effective rates much higher or lower than you actually paid. 

That kind of error can lead to pretty big consequences when it comes to setting a benchmark for rate negotiation. An inflated rate due to missing data might trick you into normalizing a rate increase. 

Missing data keeps corporate legal departments from formulating meaningful quantitative conclusions ultimately leading to uninformed decisions that can be detrimental. 

Pro Tip: Bodhala can help corporate legal departments define and collect this information and apply such criteria to historical bills to build a standard taxonomy. Equipped with this information, in-house teams can measure the variance across practice areas to determine the complexity of the matter as well as the efficiency and effectiveness of the timekeepers.

Savvy in-house teams are demanding more transparency in an effort to eliminate these billing headaches and break through the status quo. 

But do you have the data needed to lead this charge?

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

Ever grabbed an extra cookie from the cookie jar as a kid because you knew no one was watching? Or maybe you skipped out on your last set of reps during a workout because, hey, who’s going to know? 

Sure, we’ve all been guilty of cutting corners when we know there are no consequences. But did you ever attempt to take that cookie with a parent in the kitchen? We’re guessing you probably wouldn’t risk losing precious screen time over one cookie. 

That reaction – not going for the cookie when your parent was right there – is commonly known as the “Sentinel Effect”. The tendency for one’s performance to improve when they know they are being monitored can be observed in all walks of life, both at home and on the job.

The simple act of monitoring – even without applying penalties – is proven to improve behavior. It’s a great passive management technique: show someone you’re monitoring them, and regardless of whether you are actually watching or not, performance will improve. 

This is especially true when managing outside counsel. Historically outside counsel has operated without the oversight – or even visibility – of their clients. That lack of transparency fostered a situation where not only were guidelines consistently ignored, but sloppy business practices were allowed to fester. 

But how do you transparently monitor outside counsel to create the Sentinel Effect? 

The answer is simple — data. All the answers you need are right there in your billing invoices; you just have to know how to use it to create not only a feeling of increased accountability but also to stoke that competitive drive within every lawyer. 

Armed with data, in-house teams have the power to:

1. Enhance Law Firm Relationships

Law firms are retained to act in the best legal interest of the clients, but when it comes to billing, firms are still businesses and can be self-serving. The relationship becomes one-sided as clients are often left as idle price-takers while firms receive hefty paydays. 

Having regular meetings with law firms fueled by a variety of quantitative and qualitative metrics, such as billing rates, discounts, and more, will lead to more effective, robust conversations about what’s working well or where adjustments might be needed. By letting the data do the talking, the conversation is much easier – and clients get better results from their firms. 

Simple practices such as incorporating firm report cards and quarterly business reviews to regularly discuss KPIs serve as a reminder to your law firms that you’re closely monitoring the value the relationship delivers. Nobody likes a “gotcha” moment, so these regular check-ins can help quickly correct firms’ course of action, leading them to become more disciplined in their billing practices and act as a strategic business partner.

2. Eliminate Inefficiencies

From overstaffing to partners handling associate-level tasks, and everything in between, efficiency isn’t always top of mind to law firms. In fact, there’s a strong possibility that the firm that billed the most hours in your panel may actually be the most inefficient.

Inflated invoices are often the byproduct of inefficiency. But transparency on key metrics, like average partner hours, matter duration, or cost can quickly highlight where inefficiencies rack up the cost of your matters.

Examining and discussing these key metrics with your firms regularly shows that you’re analyzing their efficiency and comparing them to other – potentially more efficient – firms. Your firms don’t want to lose your business, so expect a material boost in productivity and the elimination of inefficient practices. Once you show you’re serious about evaluating performance – and value efficiency – managing your outside counsel effectively will be much easier. By using data to set transparent expectations, you provide a clear roadmap to a stronger relationship. 

3. Influence Strategic Decisions

To effectively manage spend you need to think strategically — and to truly think strategically, you need data. Corporate legal departments are increasingly demanding transparency around everything from rates to work allocation to the diversity of timekeepers and more. But visibility isn’t the only thing that data provides.  

Armed with apples-to-apples comparisons and data-backed insights, corporate legal departments can take a more informed, strategic approach towards the major decisions that impact their department and the business. 

For example, as COVID-19 rapidly accelerated the need to optimize spend and cut costs, many corporate legal departments began to reevaluate their outside counsel spend. Many departments needed to quickly review their rates and obtain rate freezes and discounts from their firms. In turn, this forced competitive firms to follow suit. 

4. Drive Down Costs & Increase Savings

Pricing is arguably the most critical part of any business – product or service. By its very nature, pricing is complicated. “Pricing tricks” are a fact of life – that’s true if you’re pricing sneakers or legal services. 

Now, it’s no secret that law firms use “pricing tricks” – some more above-board than others – on both rates as well as in the manifestation of those rates; their invoices. From block billing to unapproved rate increases to footing the bill for printing, there’s no doubt you’ve fallen victim to unnecessary costs. But the good news is that you have the power to change this narrative. 

By leveraging data to track the performance of your panel firms, you can easily identify the common law firm antics driving up your spend and address them quickly. Using data to show a pattern will, almost miraculously, make certain antics disappear. You may have to negotiate or address other patterns by changing your billing guidelines. Nonetheless, data is your launchpad for not just identifying those antics, but for actioning solutions to them (clawbacks and markdowns, anyone?). 

It’s pretty clear that transparency in business – legal or otherwise – has the power to influence performance and drive better outcomes.

But, you don’t have to take our word for it! One of Bodhala’s clients, a major insurance carrier, was having issues with their panel firms consistently exceeding budget on corporate matters. Prior to starting a very large matter merger, the organization’s in-house team worked with Bodhala to create report cards to share with the top firms in their panel. After receiving a detailed analysis of their performance from the insurance carrier, each firm immediately brought down their budget projections significantly.

Without data, you’ll be hard-pressed to hold your law firms accountable for the quality of service you expect. Data sets the foundation for a successful, equitable partnership in which you receive the value you pay for. 

So, will you continue to turn your back on the cookie jar or will you leverage data to drive better business outcomes?

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.