STREAMLINING YOUR LEGAL BILLING PROCESS AMID COVID CHALLENGES
The extraordinary circumstances introduced by COVID-19 in March of 2020 continue to present new and complex challenges for corporate legal teams to navigate. With the volume of work ever-increasing in response, law firm and technology expenses on the rise, and remote work conditions persisting, establishing an effective legal spend management process has become one of the most pressing hurdles for companies to address.LEARN MORE
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View our recorded one-hour webinar, where we review some of the major themes that defined the corporate legal landscape over the last year, and how they’ve guided organization priorities for 2022.
We’ll discuss how we can help take the stress out of your legal spend management with powerful and intuitive tools.
Caitlin: Hello, everyone, and welcome to today's webinar, "Streamlining Your Legal Billing Process Amid COVID Challenges." My name is Caitlin Alaburda, and I will be your moderator.
Joining us today are Andrea Jonaitis and John Bloxom. Andrea is a senior sales engineer in the Corporate and Legal Solutions Group at CSC. Since joining CSC in 2017, Andrea has specialized in global subsidiary management and entity management, working with prospects to present an accurate and clear scope of services, including helping subsidiaries stay in compliance as well as demonstrating CSC Entity Management. John is the Vice President of Product Management at CSC. He collaborates with customers, prospects, and business stakeholders to shape CSC's product development vision and strategy for several business lines. And with that, let's welcome Andrea and John.
John: Good morning.
Andrea: Hi, everyone. Thanks so much for joining us today. This is Andrea Jonaitis. John and I are so excited to share our morning with you or afternoon, wherever you're joining us from, to talk about CSC's eBilling and kind of how the landscape has changed a lot since COVID has kind of changed the landscape of how organizations are operating here.
As we move throughout our discussion, John and I do have one eye on the Q&A widget. At the bottom of your screen, you'll notice that there's a Q&A widget, where you can submit your questions, your thoughts, even your comments to John and I. And as we move throughout our discussion today, we're going to be paying attention to that. We'll integrate and respond to your comments and communication. So we really encourage you to please use that Q&A widget for anything, questions, thoughts, comments so that John and I can keep this really interactive and address the things that are coming to your mind as we move throughout our discussion.
So with that being said, our agenda for today, we're going to talk about how expectations have really evolved for legal teams. There have been a lot of changes to the market conditions, lots of intensifying pressure. So we want to talk about how that has been impacted, how your legal teams are being impacted by those different conditions and changes and expectations.
Priorities for legal teams in 2022, COVID has made those priorities have to shift a little bit, and how you are shifting or responding to that also changes with the impact of COVID right now. Also how an eBilling solution can help. There is a lot of ways that we can bring efficiencies, reduce your legal spend, and really help you as you're collaborating with the change in environment and the changes to the expectations. An eBilling solution is really going to help out with that.
We're also going to give you a little peek into CSC's eBilling solution. So I'll be excited to share with you a demonstration of our technology so that you can see a little bit about what CSC can provide for you from an eBilling technology kind of streamline and automation perspective.
And, of course, we want to leave plenty of time for Q&A at the end. But, as I mentioned, with the Q&A widget, John and I are going to be keeping our eye on that so that we can implement your thoughts and considerations throughout our discussion and not just at the end.
So with that said, John, let's get right into our content.
John: Awesome. Thanks, Andrea, for kicking us off. So to frame our discussion, we're going to take a look at some key findings from recent industry research, specifically the CLOC 2021 State of the Industry Report, the 2021 ACC Chief Legal Officer Survey, and also the 2021 EY Law Survey.
Not surprisingly, the findings of each of these tend to echo kind of the same themes. So as we've seen for many years, the function of legal continues to become increasingly strategic in nature. Legal ops continues to grow by leaps and bounds. It's not really showing any signs of slowing down. And then, fundamentally the role of senior leaders within the law department, be it the GC, the CLO, it's not only that of a trusted legal advisor but also one focused on long-term business growth, governance issues, and board-related matters. And the chart on the side of the slide here does a good job of driving that point home.
There are a few other key points to drive home. In particular, one which probably comes as no surprise to those of you on the call is that the scope of priorities within legal continues to expand. As a practical example, you know, COVID caused roughly 95% of CLOs to make changes to travel and safety policies. Those figures are three times what they were pre-pandemic. In addition, given recent events, social justice, political issues, environmental policy, things like that have also emerged as common areas of focus when that wasn't previously the case. And a lot of that has to do with pressure from investors and shareholders.
The second thing is that operational efficiency is a top of mind concern, and for several years we've seen this growing delineation between managing the legal issues and the other critical functions in legal. So that's things like running the department. It's also things like interfacing with other teams, be it FP&A or IT. And those functions, of course, are really the focus of legal ops. In 2015, less than one in four departments had a dedicated legal ops resource. That number is now north of 60%.
The third piece here is that the pressure to cut costs is not at all abating. More than 88% of general counsel are planning to reduce costs over the course of the next three years. For larger companies, the reduction target is about 18% on average, and for smaller companies, that target averages out to roughly 14%. And really that kind of underscores the need for technology solutions that make a meaningful impact on spend. Simply throwing people at the problem is not really an effective strategy for bringing those costs down.
And then, fourth, while cost control remains a top of mind concern, the bigger picture objective for legal is really to foster business growth and mitigate critical risks. Again, that kind of goes back to the notion of legal being fully integrated into the company's business strategy. By comparison, spend management is a relatively technical task, and again it's something that can be made more efficient through the use of technology and through automation.
So that encapsulates how the landscape is changing for in-house legal teams. The next slide covers how several of these expectations have really kind of translated into demand for outside counsel.
So the headline here and something that many of you have likely experienced over the course of the past I would say 18 to 24 months is that we've been relying on the firms that we partner with more and more. To put things in perspective, typical spend on outside counsel in 2021 was as high as it's ever historically been. On average, that figure is about 35% higher than what departments typically spent in 2016. The outlook for 2022 is similar. Four out of ten law departments surveyed expect to spend more this year, four out of ten expect to remain flat, and only two out of ten expect legal spend to trend downwards.
In particular, there are two practice areas where demand for outside counsel is expected to surge. The first is corporate work, which probably comes as no surprise. That's due in large part to the record M&A activities we've seen in recent quarters. And the second is regulatory law. That's being driven by a rise in regulation related to environmental, social, and corporate governance issues.
The chart on the right-hand side of the slide here does a good job of conveying how practice areas stacked against each other in terms of projected growth this year. So holistically, demand for outside counsel is up. Expectations of in-house staff are also increasing. And the next slide gets into other factors that are worthy of note in today's legal climate.
All right. So to further kind of compound the challenges that are faced by law departments, this increased demand for outside counsel has had some implications that aren't exactly favorable.
One, the overall number of firms and attorneys retained by corporate clients has been trending up, and that poses some management challenges. In fact, 83% of GCs feel as though they've got too many firms to effectively manage.
And then, two, is kind of classic supply and demand. As demand for outside counsel has been climbing, firms have been able to ratchet up their hourly rates pretty drastically. And in 2021, we saw those hourly rates approaching 10-year highs.
So year-over-year, we've seen industry surveys citing outside counsel billing guidelines as the single most effective way to reduce your legal spend. But according to the data, four out of five departments say that their guidelines either lack sufficient detail or they're not followed by the firms that are actually billing them.
So again, you know, if you kind of zoom out, legal is being asked to do more. Demand for outside counsel is trending up. The costs of outside counsel are trending up, and we aren't necessarily doing a great job of making sure that firms adhere to our cost-control guidelines.
All right. So the figures that we've shared leading up until this point kind of underscore a lot of the challenges that law departments are facing. What this slide conveys is that, in spite of those challenges, legal teams have been expanding in recent years, both in terms of their areas of focus and also their relative maturity. So in just two years, we've moved from about half of all departments to roughly three-quarters assuming responsibility for things like building the budget, coordinating billing, tracking spend. And that spend tracking, that applies both, you know, internally to your legal department and also to the outside counsel firms that you are working with. So clearly, you know, improvements are being made in that regard.
The next slide kind of talks about how that's being done in a sense. So what's the enabler or what's the vehicle for these changes? And it's not really a surprise, of course. You know, technology has been the driving force behind a lot of this. You'll see a handful of practical examples of this during Andrea's demo of our tool. As shown here, 59% of general counsel think that technology either offers a significant or a very significant potential for cost savings, far ahead of any other measure on this list. And it's also worth noting that technology platforms can be instrumental in reaching some of the other objectives that are called out here. So things like process optimization, rate negotiation, those are made possible through use of these tools as well.
The last point that I'll drive home, relative to this slide specifically, is that in spite of this, one in three departments referenced in this survey actually said that they don't have the technology that they need in order to do their job.
All right. So one in three is a pretty substantial gap. That finding has been echoed by other surveys, including one done recently Consero. Here the focus was on eBilling software, with respondents indicating that 35% didn't currently have a solution in place, right? And in a general sense, budgetary constraints posed challenges for departments that are looking to invest in technology, like eBilling. But the cost savings associated with implementing eBilling is real. It's been proven in numerous studies, and it can justify the return on your investment.
So I'm about to hand things over to Andrea for a high-level demo of our tool, but before I do I'm going to speak very briefly about each of the benefits of the platform.
The first relates to simplifying your process. A legal spend management tool makes your life easier by channeling all of your invoices through a uniform workflow. That's going to cut down on email. It will eliminate the need to manually enter information into spreadsheets, file folders, things along those lines. And fundamentally, it just makes it easier to track things down.
The second benefit is cost savings. And while many of the different capabilities play a role here, the two most substantial elements that we see with our customers are enforcement of your billing guidelines and also automated rate checks. So we'll see some examples of that.
Another element is time savings. Bill review takes far less time when a system flags, adjusts, and rejects entries for you. In addition, you know, you're no longer handing things off manually to other folks in your department for approval. You're no longer manually sending things to accounts payable or filling out spreadsheets so that they know when to remit payment. All of that is automated.
You can also dispute charges rather than rejecting them outright or adjusting them if that's how your department does business. That's something that we refer to as the appeals process. So that's a capability that we bring to the table.
And then, finally, KPIs and other types of reports are at your fingertips. Ultimately, that empowers your department to make better business decisions.