The Wolters Kluwer’s ELM Solutions online Legal Ops ACCELERATE series recently continued with an introduction to our Total Spend Management approach, including perspectives and advice from two respected legal industry professionals - Jonathan Weber, Vice President of Claim Optimization at Chubb and Michelle Gallagher, Senior Advisor of Legal Operations at Dell - based on their extensive experience.
Jeffrey Solomon, our Senior Director of Product Management, began by describing to attendees the details and benefits of Total Spend Management. As Jeff indicated, it is a proprietary ELM Solutions approach, which represents a new way of looking at spend management using advanced technologies to control spend “leakage” and yield greater savings while improving outcomes.
Stopping the leaks
Traditional spend management, which includes e-billing and invoice review, is table stakes in 2020. While it does continue to yield savings for most legal and claims departments through efficiency gains and the application of technology-enabled rules, such as upfront flags, AFAs, and enforcement of timekeeper rates, those savings are really baked in at this point – typically under 5% on legal spend. The obstacles to driving real additional savings and real spend maturity include complex billing guidelines, firms that bill via paper invoices, and retroactive reporting processes. Total Spend Management is a way of managing spend that helps improve efficiencies in these areas of spend leakage.
Our innovative approach leverages artificial intelligence (AI) and advanced analytics, along with experienced legal experts. By combining these effective strategies, Total Spend Management offers improvements in three broad areas:
Supercharged cost management – Maximizing outside counsel compliance with your billing guidelines helps you quickly minimize spend. To help you accomplish this, we offer the LegalVIEW® BillAnalyzer managed service, which increases cost savings on legal spend up to 10% and increases billing guideline compliance by as much as 20%. Both versions of LegalVIEW BillAnalyzer – the Expert Service and the Data Service – utilize AI to identify the invoice line items most likely to require adjustment, identify trends and patterns within law firm billing behaviors, and flag for human reviewers. Putting AI to work in this way frees attorneys and other legal professionals to focus on their most important tasks and become more productive, capturing efficiency gains in addition to increased invoice adjustments.
Complete visibility – Gaining control over all vendor billing, including paper invoices, is an important part of minimizing spend leakage. Intelligent Invoice Conversion combines AI with human quality experts to convert these paper bills to standard LEDES invoices that can be reviewed and tracked in Passport® or TyMetrix® 360°, yielding full data transparency while reducing manual processes.
Better analytics, smarter decisions – Advanced analytics, dashboards and benchmarking provide the information you need to make the best decisions about your spend. The LegalVIEW benchmark database of over $130 billion in legal spend data fuels the groundbreaking Predictive Insights module. The module uses AI to provide predictions about the law firm expected to get the best outcome on a given case, law firm budget, and cycle time data and present it within your workflow before you take any action, supporting you in better decisions about outside counsel selection and management.
Jonathan Weber talked to webinar attendees about how Chubb uses multiple elements of Total Spend Management to improve enforcement of their billing guidelines and ensure that all of their legal spend is captured and reportable within their spend management platform. He explained that Chubb works with outside counsel firms in regions where their technical ability is limited, resulting in paper invoices. They use Intelligent Invoice Conversion to capture the data from these bills for reporting, make sure they are correct, and run them through the same “funnel” as the invoices Chubb receives electronically, enabling them to achieve similar bill review savings and analytic outcomes.
Jonathan advised attendees to be thoughtful about the kinds of data they capture and about the target firm performance they hope to achieve. Chubb found it useful to think of their use of LegalVIEW BillAnalyzer as a compliance program, rather than a savings strategy. Jonathan noted that as compliance increases, the per-invoice “savings” decrease because firms learn over time to improve the invoices they submit, thus requiring fewer adjustments. This is a sign of the program’s success.
The webinar concluded with Michelle Gallagher describing the ways in which Dell uses analytics, including LegalVIEW Dashboards, to improve their spend management results. The company uses the data to control costs, track trends, and record staffing, case types, and other details. This information is then used to report on the company’s legal spend with metrics such as actual spend vs. budget and accrual estimates, with extremely detailed reporting on invoice status, when they were received, relevant cost centers, etc.
Michelle told attendees that clean data is critical. She suggests getting internal agreement on which fields to measure and very specific definitions of each one of those fields. Consistency is key to making sure that your reports deliver the information that you need to make decisions. The effort is worthwhile because the data helps teams make better decisions about which firms to choose and other aspects of managing spend.
For more information and to hear all of our speakers' advice for legal and claims departments, watch the recorded webinar Total Spend Management: Go Beyond E-Billing for Better Outcomes. And be sure to visit the Legal Ops ACCELERATE page to learn about all of the upcoming sessions in our webinar series.