Wolters Kluwer’s ELM Solutions, in conjunction with Gartner, has released a study revealing that insurers and corporate legal departments are failing to use legal billing and staffing guidelines strategically. In fact, just 6% of corporate legal departments and insurers indicated that their guidelines make outside counsel’s invoices “very easy” for audit and compliance purposes. And there is now an opportunity for firms across sectors, including financial services, to embrace Artificial Intelligence (AI)-enabled solutions to help manage the process more efficiently, Wolters Kluwer’s experts suggest.
Wolters Kluwer and Gartner, the global information technology research and advisory company, surveyed 51 large and midsized companies to collect quantifiable data to examine the relationship between corporate legal or claims departments and their law firms.
It appears that although 75% of large to mid-sized corporations currently have, or are developing, legal billing and staffing guidelines, few are using them strategically. And there are varied reasons for developing the guidelines. 75% of respondents stated they wanted to control costs; 65% indicated they wants to ensure basic compliance with processes; 60% wanted to create consistency across relationships with outside counsels; 55% wanted to make it easier to manage outside counsel and 23% wanted to define and ensure work quality.
Only 31% of respondents indicated that they are satisfied with outside counsel’s compliance with their guidelines, with none “completely satisfied.”
“E-billing systems implement billing guidelines and identify basic compliance infractions, but they are designed work in tandem with human invoice reviewers and are therefore dependent on reviewers for their effectiveness,” Wolters Kluwer’s notes in its analysis of the results, available on ELM Solution’s website. But the bottom line appears to be that “while most claims and corporate legal departments have billing guidelines, few are happy with results.”
Arguably, once guidelines and an e-billing system are in place “many take a detached approach to management and maintenance,” Wolters Kluwer says, adding that this is understandable. “Internal review takes time and is not the reviewer’s only priority, and it is hard to audit effectively and accurately if unfamiliar with the underlying matter or guidelines. When it comes to responding to non-compliance, most don’t want to strain relationships with their firms and prefer to take a hands-off approach,” its experts add.
And this is where new AI enabled technology can help.
In March Wolters Kluwer’s ELM Solutions launched LegalVIEW® BillAnalyzer to help insurance claims organizations, as well as corporate legal departments across sectors, to more efficiently manage incoming legal invoices, improving cost management. The LegalVIEW BillAnalyzer service manages the invoicing review process “through a combination of advanced technology, machine learning and expertise to ensure outside firm compliance with billing guidelines”, with Wolters Kluwer suggesting it offers clients an average cost savings of 6 to 9 percent in legal fees.
Wolters Kluwer adds that BillAnalyzer uses a combination of supporting infrastructure, such as AI and robust benchmarking data and analytics, in addition to specially trained legal experts to review every invoice. “By applying machine learning across tens of thousands of invoices, you get better outcomes, additional cost control and savings, and improved productivity,” the company argues.
Wolters Kluwer’s ELM Solutions provides enterprise software solutions that facilitate workflow and collaboration across the legal community. In addition to BillAnalyzer the firm has launched a number of new services in recent months. In May, for example, Wolters Kluwer’s ELM Solutions launched a new Legal Service Request application for its Passport® Enterprise Legal Management platform. The new offering “helps corporate legal departments easily manage and monitor the internal legal service requests they receive from across their organization…increasing efficiency and cost effectiveness of legal department operations by expediting request submission, assignment, and reporting.”
And in January the firm launched Passport® Pro, a new pre-configured version of its Passport® ELM (Enterprise Legal Management) platform. Passport Pro is a hosted solution that offers a “comprehensive menu of essential legal matter and spend management features and best practice based workflows that come ready to install, resulting in faster implementation.” Corporate legal departments with less complex legal workflow requirements, limited internal IT capabilities, and legal departments of less than 100 users are best suited to use the solution, the company says.
Notable financial services clients for Wolters Kluwer’s ELM Solutions, within its global corporate client base, include AXA, Marsh & McLennan and Aon, according to the client section of its corporate website. The firm also serves more than 33,000 legal service provider connections in more than 190 countries, comprised of large and medium-sized law firms, solo practitioners, IP agents, consultants, and other vendors. This includes 100% of the Am Law 200 (the highest grossing law firms in the US); 100% of the Am Law Global 100 (the highest grossing law firms in the world); Law firms in all 50 US states and most US territories; Law firms in every country in the EU and all five of the UK’s Magic Circle law firms.