By Susan Bokermann
Dec. 8 — There’s not a particular silver bullet that results in law departments’ efficiency, according to Bret Baccus, senior director for Huron Legal.
Baccus was commenting on one of the key findings of Huron Consulting Group’s Fifth Annual IMPACT Benchmarking Survey released Dec. 3.
The 2014 IMPACT survey, which was conducted in partnership with The General Counsel Forum, aims to assist general counsel in breaking down and understanding the effectiveness of their operating processes.
The survey included data from 75 companies with revenues from under $2 billion to more than $10 billion and across various industries. The survey results indicated a broad trend in more effective cost management programs, including more detailed use of information, big-data analytics and a focus on law department management technology.
The survey results reflect “an increased usage of a more detailed understanding of where the legal department costs are going on matters,” Baccus told Bloomberg BNA Dec. 8. This is “an evolution within law departments” to provide increased value to the department and business clients.
Although the majority of law departments use fee- and expense-level budgets, the percentage of departments using phase, task and timekeeper budgets has increased from 5 percent to 20 percent since 2011. These kind of detailed budgets provide law departments with greater insight into spending and increase outside counsel accountability, according to the survey.
Baccus also pointed to the increased use of alternative fee arrangements (AFAs) as another example of law departments using more-detailed information to make cost-controlling changes. Eighty-three percent of law departments reported using AFAs in 2014.
“There’s been a buzz in the industry around the use of big data,” said Baccus. Thus, this year’s survey for the first time asked about the use of “big data” and analytics in making decisions. Fifty-seven percent of law departments reported using “big data” and analytics to help drive decisionmaking in some capacity.
Baccus explained that “[l]aw departments now have enough historical information with their matter management and e-billing systems to really make informed decisions.” He said that external data, such as the survey, help to make those decisions.
The survey found that big data was mostly used in making decisions regarding outside counsel fee arrangements and rate negotiations.
The use of more detailed information and data analytics is tied to law department management technology, according to Baccus. Seventy percent of respondents with more than $10 billion in revenue reported having law departments with long-term strategic technology and process development plans.
Eighty-five percent of companies with more than $10 billion in revenue reported using matter management systems, e-billing and contract management systems.
Those companies not using these systems expressed interest in being better positioned to implement them, according to the survey.
Baccus said that the trend in more efficient cost management programs for law departments began in 2008, when they were forced to focus on cost management and cost predictability. He said that as law departments came under more scrutiny, they began implementing programs that allowed more control over cost and spending.
He said law departments' transparency and disclosure to the board and the chief executive officer has continued to increase and contributed to this trend as well.
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More information on the 2014 IMPACT Benchmarking Report is available at http://www.huronconsultinggroup.com/Insights/Resource/Legal/2014-IMPACT-Benchmarking-Report- Highlights.
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