Corporate legal departments face diverse challenges: providing effective counsel to internal clients, supervising outside counsel work and managing risk for the organization. And they generally must achieve these objectives within the constraints of limited internal resources and a fixed budget.
Enterprise Legal Management (ELM) software has recently emerged as an increasingly useful set of tools that can help law departments simultaneously optimize processes, improve risk management and reduce overall legal spend.
Regulatory compliance risks are growing. A recent report from Thomson Reuters Accelus concluded, “[T]here is a discernible upward trend in both the direct and indirect costs of [regulatory] enforcement action.” However, companies increasingly have to balance meeting growing compliance and legal demands with limited resources and budgets.
Enterprise Legal Management can improve risk management and corporate efficiency by automating documentation, spend management, information availability and collaboration, among other functions.
ELM is typically an integrated set of applications that includes:
Matter management involves tracking and managing all aspects of a department’s legal matters. Sophisticated systems connect directly with outside counsel, who place information, deadlines, and documents directly into client files, cutting administrative handling time and emails. Dashboards provide at-a-glance views of matters, at both the individual and aggregated levels, along with alerts for specialized tasks.
Legal Document Management
Legal documents are at the heart of any legal matter. The ability to create, edit, approve, store, retrieve and search documents is the key to managing matters efficiently. Organization, collaboration and searchability are some of the enhanced features that ELM can provide.
Business Process Management
Automating and streamlining business processes can also improve departmental efficiency. Business process management typically provides not only workflow automation, but process analysis and management, as well as business intelligence to standardize and optimize business processes.
E-billing enables law firms to provide invoices electronically for review and payment. The e-billing application can automatically route invoices for approval and payment, and reviews bills to ensure compliance with contracts and business rules. However, the key benefit is using software to automatically analyze the e-billing data and summarize key information about who is doing work and what it costs. This can then populate databases for immediate report generation across all matters without manual data entry. The most sophisticated systems also collect accrual data from law firms so that law departments can see unbilled time as well as what has been billed.
Operational efficiency depends on reliable financial information regarding legal matters. Financial/spend management allows users to view spend information entered electronically by outside firms, simplifying critical tasks like budget to actual spend review, identifying key changes in legal spending, creating alternatives to hourly fees, and providing internal/external cost comparisons.
Successfully managing all of these business, financial and legal tasks is a large and complex undertaking. Several factors that can impact the effectiveness of different ELM systems should be taken into consideration when evaluating potential vendors:
The Whole Is Greater Than the Sum of the Parts
While all of the above tasks represent critical functions, one of the key differentiators among ELM solutions is their ability to successfully combine software that manages each of those functions together with key integration points. Such integration can enable sharing of information between applications, as well as analytics that can help drive better decision making. For example, matter management and document management functions can be integrated so that due dates, reminders and owners can be tracked by matter management as documents and other tasks are completed.
You can’t manage what you can’t measure. In addition to managing processes, ELM analytics in systems that collect data from hundreds of law departments can enable each law department to review its performance against peers and benchmarks, as well as outside counsel performance, benchmark rate comparisons, and review spend and budget guidelines. In this way, law department leaders can track performance and make data-driven adjustments as needed.
To maximize its effectiveness, analytics need to compare department data against as broad a data set as possible. For example, Serengeti Tracker aggregates data from more than 650 law departments and 27,000 law firms to create a robust index of worldwide metrics that can provide deep and meaningful comparisons against peers.
Expertise in Legal Matters
Given the highly specialized needs of legal departments, experience and expertise in a broad range of industry segments from the ELM provider is paramount. The solutions provider needs to have a clear understanding of a customer’s specific needs and the ability to guide the customer during system setup so that the system will meet the specific needs of the law department, including customized reporting/benchmarking that shows the value that the law department provides to the company.
Capable software and institutional expertise are only the beginning. Professional services and technical support are essential to maintain effective usage of ELM on an ongoing basis, as solutions are constantly improving. Vendors should be able to demonstrate wide adoption among both law departments and law firms, and a strong history of customer satisfaction in all phases of implementation and usage. In addition, the system should be frequently upgraded at no additional cost to the customer to reflect the latest best practices of the user community so that all law departments benefit from the most recent developments in the profession.
Not surprisingly, given its ability to improve both legal and business processes, ELM is seeing growing adoption by corporate legal departments. It’s taking a position of increasing importance in helping them manage their processes more efficiently while helping organizations more effectively manage risk.
Systems such as Serengeti Tracker can provide a single, integrated view of a legal department’s entire landscape of matters, tracking time and spending, projects and productivity, in-house and outside counsel activity, risk and exposure, and results achieved. But integrated systems for managing e-billing, matter management and analytics are only one piece of the solution: it is vital that law departments – and their ELM providers – constantly incorporate the latest best practices from leading law departments to increase cost control, reduce spend and drive efficient collaboration, both internally and with outside counsel.
For a free CLE webinar with Rob Thomas on Effective Law Department Management, click here.
Rob Thomas is one of the founders of Serengeti Law which, with more than 200,000 users in 189 countries, is the most widely used and fastest-growing system for managing legal work in the world. He is currently the Vice President, Market Development Group, for the Corporate Legal Segment of Thomson Reuters.