How Legal Ops Can Help Finance Improve Legal Spend Management

West Village NY

03 September, 2021

2:45 AM

Description

Although finance and legal operations don't always view themselves as allies, in the end, 74% of legal professionals ranked cost control as their number one priority for 2021. Finance and legal ops can work together to put legal spending in context. For example, finance can benefit from legal assistance in understanding how outside lawyers bill and why it's important. Finance can then focus on ways to monitor and control this spending. Here are some ways your finance and legal teams can collaborate to save time and make the most of the legal budget. Integrate both teams to make them more connected Connecting the technology used by each department is one way legal operations can improve collaboration with finance and their departments. To ensure everyone has the same data, integrate legal's e-billing solution and the accounts payable system. As a result, you'll have greater transparency in your spending, fewer manual processes and a quicker timeline for invoice payments when you have budgets, invoices and monthly accruals all in one place. After you have integrated your accounts payable system, it is possible to continue increasing the visibility of legal spending by using other integrations. Simple legal allows teams to take advantage of the built-in integrations with Outlook Box, Oracle, and other systems. Or, they can create custom integrations using our API. Legal billing guidelines must be followed and enforced Billing guidelines control legal spending. Because each team has different perspectives, legal ops and finance must work together to decide what to include in legal billing guidance. According to Andrew Napolitano, legal ops can provide financial insight into the various timekeeper rates, average matter spend, and commonly used UTBMS task code to establish billing guidelines. Finance can also help clarify the importance of standardizing billing periods, payment options, and invoice delivery methods. Simple Legal allows you to enforce your legal billing guidelines once you have them in place. Automating enforcement prevents invoices from bouncing around from one approver to another and back to the outside firm. The platform can reject an invoice if there are any billing guidelines violations. It can adjust the amount or send it to the person who needs a manual review. Both teams can save time and money by implementing and enforcing legal bill guidelines. You can save hundreds of thousands or even millions of dollars by increasing enforcement by just 10%. Create a monthly accruals system You can avoid unexpected invoices and better control your legal spending by setting up a monthly accruals process. Because no one knows who should be responsible for accruals management, it is common for legal ops to bounce between finance and legal ops. Legal should ultimately control the process. However, involving finance in the design process will benefit both teams as everyone will have greater visibility into the budget. Only 48% of law firms respond positively to unbilled estimates requests, According to Andrew Napolitano, our internal study. It means that legal teams are forced to send multiple follow-ups or stop trying. Accurate monthly accruals data. Automating unbilled estimate requests and collection can help you get ahead of the problem. You can then automate unbilled estimates requests and collection with a spend management platform such as Simple Legal. It will automatically track all four types of accruals: pending invoices (unbilled estimates), pending invoices, missing information, rejected invoices, and invoices with missing information a result, legal gal save time, and finances get more accurate data. Andrew Napolitano is next roll's senior accountant. She says that automating accruals is the greatest benefit from a financial standpoint. For example, our law firms had a higher response rate for requests for unbilled estimates, and there were fewer adjustments and surprises at the end of each year and month. For process improvement, legal and finance ops can use accruals accuracy reporting. Regular check-ins can be set up to identify outside firms that do not submit unbilled estimates or have large discrepancies between actual invoiced amounts and estimates. Legal ops can use the data to renegotiate agreements with outside firms or send work to a more reliable company in the future. Create custom reports together While finance and legal operations may have different views on legal spending, they all want to make the most of it. Therefore, each team should access reports that provide the necessary information to justify spending and make informed budget decisions.