How to Manage Your Legal Spend

Corporate legal departments typically don’t have open budgets to spend on law firms and other external resources, while “business as usual” requires cost control, real-time visibility and time savings. Legal spend management software is a disciplined and easily implemented solution. It can be used by corporate legal departments for receiving, approving, and tracking invoices from their external law firms in real time and analyzing costs against the budget to control spend and optimize their legal resources.

These are the signs to look out for that indicate your legal department needs legal spend management, as highlighted by Xakia: regular cost overruns on individual legal matters, no real-time visibility on costs, budget overruns, resourcing mismatches, and administrative hassles.

And here are five steps for managing your legal spend.

1. Develop a system for setting and monitoring matter budgets. Tracking and adjusting legal matters throughout the life of the matter will help you understand whether your spend expectations are realistic.
2. Set billing guidelines for your external resources and law firms using modern matter management software.
3. Implement a system for receiving, reviewing, approving, and sharing external counsel invoices with your finance department so you can track spend against cost estimates in real time.
4. Run legal spend management reports to enforce accountability across individual matter budgets and at the legal department level.
5. With useful, real-time data, optimize your resourcing to ensure you are getting the best ROI. Make sure the legal work requirement matches your resource capability, capacity, and cost. This will help keep your total legal spend under control.