One of Legal Decoder’s biggest strengths is its capability to surface crucial data from legal invoices, which helps organizations establish strategies for keeping their spend on target. But with each piece of data comes a story that illustrated how the business of law can be innovated upon.

Budgeting has long been a thorn in the side for in-house and outside counsel. For outside counsel, there is constant pressure to keep their costs as marketable as possible while also delivering premium results. For GCs and inside counsel, budgeting is the epitome of the challenge that comes from balancing their role as a key enterprise driver while just wanting to practice law. Even though inside and outside counsel accounting methods and target KPIs differ, creating budgets with matter pricing in mind as it applies to both types of organizations can be key for addressing disputed instances in the inside-outside counsel relationship. Here are a few things we have learned about pricing data to help your organization avoid budgeting blunders:

1.      Keep OCGs Front of Mind: One of the first and foremost causes of pricing disputes between departments and their contracted firms is improper adherence to OCGs. These types of disputes are the most common reason invoices and payments are held up, and over time the cost of these disputes, write downs and collections delays accumulates dramatically. OCGs are the key reference point for both keeping projects in scope and adherence metrics are helpful for assessing how efficiently matters run. Assessing those results over time is a helpful way to more realistically allocate funds for complex workflows and stay in scope year after year.

2.      Prepare Multiple Budget Projections: One of the greatest benefits of having extensive data at your fingertips is the ability to manipulate it according to whatever variables you set. If the global pandemic has taught us anything, it is that revenue could constrict or expand at any moment depending on which segments thrive in certain economic conditions. Some of our customers have leveraged data surfaced from our Pricing tool that allowed them to draw multiple projections based on efficiency metrics from past work. Ultimately, whatever you collect in actuals is up to many different factors, but prepared legal teams can control how much value they can retain from any situation.

3.      Evaluate a Variety of Deployment Models: The billable hour has long been used as the starting point for insights on efficiency; it is legal’s bread and butter. While our cleanest data usually comes from consistently formatted invoices with proper skill match, at a certain point, some resource intensive tasks show more value from being repackaged or redeployed. ALSPs are one option that comes to mind when considering specific redeployment strategies but exploring all the options will help you find the best fit.

Despite legal professionals’ desire to accumulate billable hours doing the work they know best, it is important they recognize their position as one of the major drivers for business development and cost recovery. In a lot of critical ways, a corporate legal department is supposed to be an important line of defense, and law firms are the greatest aides to fill in the gaps in the metaphorical armor. At Legal Decoder, we help justify the cost of doing legal business, but it is important that legal teams and strategize to get the most value out of their budgets. To learn more about how Legal Decoder aids legal teams in standardizing costs and gathering data for smarter budgets contact our Head of Business Development, Jackie Kappus at jkappus@legaldecoder.com to schedule a demo.