Legal Team
Strict enforcement of billing guidelines alone can yield significant cost savings for legal departments - one team reported 15% reduction. Success comes from three key elements: systematic review of invoices for compliance, consistent rejection of non-compliant bills, and streamlined processes through automation and threshold-based reviews. As demonstrated by HashiCorp's approach, balancing relationships with both large and boutique firms while maintaining strict billing standards can effectively stabilise legal costs.
Source: Priori-CLOC
Legal departments are discovering that controlling outside counsel spending doesn't require complex cost-cutting measures - it's often as simple as enforcing existing billing guidelines. One legal operations team reported a striking 15% cost reduction purely through implementing strict billing guideline reviews and maintaining firm compliance standards.
The foundation of effective billing management lies in systematic review processes. Legal departments must scrutinize invoices for common issues like administrative tasks billed at attorney rates, duplicate billing, and excessive attendance at internal meetings. Modern e-billing systems can automate much of this process, making it both efficient and consistent.
While potentially challenging, maintaining firm boundaries on billing compliance is crucial. For example, if guidelines specify a 60-day invoicing window, late submissions must be rejected. As one legal operations professional noted, there may be an initial "teething process," but law firms quickly adapt when they realize guidelines will be strictly enforced.
For organizations struggling with review processes, implementing a threshold-based system can significantly streamline operations. This might involve automatic approval for smaller invoices while focusing detailed review on higher-value bills. HashiCorp's Head of Legal Operations, Kshitij Dua, provides valuable insight into strategic billing management: "We track how much we're spending with boutique law firms because that is one of the key factors through which we've been able to stabilize our legal costs. We extremely value our Big Law relationships and look to derive value from these, especially for certain categories of matters, but we also track our boutique law firm spend against our total OSC spend and always look for opportunities where we can partner with boutique firms for their expertise."
The key to success lies not in creating complex guidelines but in consistent enforcement and clear communication with outside counsel. Through straightforward yet effective strategies, legal departments can achieve significant cost savings while maintaining strong relationships with their law firm partners.
Read more: Priori-CLOC