Driving Hard and Soft Savings with Enterprise Legal Management


Enterprise Legal Management (ELM), is an integrated portfolio of technology, processes, services, and providers working to manage legal operations, streamline workflows, improve collaboration, and provide actionable insights that help increase value. These systems offer a myriad of benefits. Some of the most important include helping a legal department better manage costs and improve operational efficiency. With a system that enables both e-billing and matter management, corporate legal departments can realize significant first-year and multi-year savings potential. When implemented thoughtfully, an ELM ecosystem of technology, processes, and engineered workflows enables legal teams to lower spend and drive efficient legal service delivery while ensuring good value.

Most legal departments begin by tracking matter information in a manually-updated spreadsheet. When the complexity of operations grows to a point where this is impractical, there can be a temptation to acquire point solutions designed to address a single pain point, adding solutions as needs expand. This may seem prudent because point solutions often require limited investment. The problem is that they also offer limited return and, in the end, are unlikely to deliver the savings that can be realized by selecting a flexible ELM platform.

A Powerful Savings Tool

While specific features may vary among solutions, any high-quality ELM system will offer several areas of functionality that reduce spend. The following are a few core examples:

  • Electronic Invoice Submissions: E-billing reduces time-consuming paper-based manual invoice processing.  With e-billing in use, data entry is no longer necessary and administrative tasks such as delivering and managing paper invoices are eliminated. In addition, checks on electronically submitted invoices automate enforcement of outside counsel guidelines and fee arrangements and reduce billing errors.
  • Analytics and Business Intelligence: ELM systems capture the information contained in invoices and matters, making it available for quantifiable performance evaluation. With this rich data, clients can mine for areas of better cost efficiency and ensure that firm resources are being spent responsibly. Benchmarking intelligence provides essential insights on a range of business decisions, such as how to budget for matters, how long matters should take to complete, and who should be assigned to the work. By providing this actionable insight, a legal management solution enables cost reduction efforts such as negotiation of lower rates, use of alternative fee arrangements (AFAs) that limit spend, and redistribution of outside counsel assignments to lower-cost firms.
  • Centralized Data and Information: By combining legal and risk-related information on a common platform, an ELM system ensures that attorneys and compliance professionals have secure access to all needed information, eliminating redundant systems, and allowing them to quickly find what they need when they need it. Efficiently connecting disparate systems and centralizing information generates exceptional efficiency and eliminates rework and errors associated with exporting information from one system and importing into another.

Legal Management Strategies that Support Savings

In addition to the efficiencies outlined above, there are several specific legal management strategies that legal departments can employ help to control costs. To drive savings without risking too much simultaneous change, ELM Solutions recommends implementing two of these strategies to get started, and adding up to two additional strategies each year. Key legal management components include:

  • Budgeting: Setting budgets on matters or groups of matters imposes discipline for outside counsel and helps internal staff keep current on department spending. In addition, requiring budgets fosters discussion with outside counsel before they undertake costly activities, improving outcomes while keeping spend in check.
  • Rate Management: Strict enforcement of negotiated lawyer rates reduces cost in the most direct way – by ensuring that outside counsel bill in accordance with agreed-upon rates. Rates can be set by role for each law firm so that when an invoice is submitted, the system automatically flags or adjusts any line item that does not adhere to contracted rates. A top-tier legal management partner can also provide industry benchmark rates that legal departments can use to inform timekeeper rate approval.
  • AFA Management: AFAs define payment for legal services according to considerations other than number of hours worked at a particular rate. Because AFAs have the flexibility to vary compensation among different types of matters or providers and can be designed to share the risk of negative outcomes with outside counsel, they generally provide increased value for lower cost. An ELM system makes these variations feasible by automatically tracking and enforcing them.

While these are the most commonly-used, there are many additional legal management strategies to consider. Panel consolidation, formal outside counsel evaluations, and a host of analytics are among the methods that highly efficient legal departments often use to control costs and support quality.

Significant Year One Savings

Along with the “hard” financial savings they introduce, ELM systems also provide “soft” savings by automating and enhancing key processes and enabling corporate legal departments to improve productivity, stimulate collaboration, and improve decision making. Once implemented, this essential technology quickly improves operations and generates a positive return on investment. By implementing both e-billing and matter management, corporate legal departments can realize significant savings potential in the first year and for many years beyond. Given the associated improvements in operations and outcomes, an ELM system represents the soundest possible investment for any medium to large corporate legal department.


For more detailed information on the ROI that legal departments can expect from an ELM system, download the white paper Building the Business Case for an Enterprise Legal Management System.



About The Author

Linda Hovanec

Linda Hovanec is a seasoned legal professional who has worked in the business of law for over 25 years. In her current role, she drives innovation in the core product lines of ELM Solutions, incorporating best-in-class contextual design methodologies into product development processes and using real-world data to align product roadmaps with client needs.