Managing legal spend when firms bill on an hourly basis can be challenging, and companies are more frequently using alternative fee agreements (AFAs) to deal with these challenges. To better understand how AFAs contribute to effective management, it is important for in-house counsel to consider why and when to select AFAs.
Dealing with disputes in court is risky business. Victory is never certain, and even if you succeed you will have spent a fortune in time and money to obtain a resolution. Instead of going to court, you can reduce risk exposure from legal disputes by including mandatory arbitration clauses in your contracts. Since arbitration resolves disputes very differently than traditional litigation, those who use arbitral forums can avoid many of the expensive downsides of going to court.
The utilization of legal billing guidelines has become the norm in the day-to-day invoicing processes of law firms. General Counsel willing to enforce billing guidelines can increase savings and promote accountability of tasks billed. They want to be assured they are receiving the best and most cost-effective representation while effectively managing their company’s legal spend across all matters.
In today’s dynamic and evolving markets, corporate legal and risk services departments are trying to innovate their operations and produce more cost-efficient outcomes. The decision to take on an e-billing or legal spend management solution can be challenging, and often the decision is made based on misconceptions about what such a solution might offer.
In the past several years, corporations have increasingly viewed their legal and risk services departments as regular business units. Instead of functioning as an autonomous unit without the pressures of budgeting, forecasting, and accountability towards the bottom line, legal departments are now being tasked with contributing to the overall health of the organization. However, not all departments have the operational manpower to accomplish these tasks in-house.
When it comes to managing your organization’s legal spend, it is important to set expectations with outside counsel clearly from the onset to avoid confusion and expensive surprises. Having a conversation with your law firms about timekeeper authorization is one of the most fundamental ways that you can proactively set expectations. Having a method for authorizing timekeepers builds accountability into your relationship with outside counsel, but there are three important considerations you should make.
As law firms’ hourly rates continue to rise, in-house counsel must decide when to approve these rate increases and for how much – all while preventing unnecessary rises in their company’s total legal spend. Rate increases can be difficult to track over the years, especially when you handle a large volume of cases, budgets, and firms on a daily basis. Without measures in place to manage these increases, you can soon find that the company’s legal spend has crept higher and higher without justification.
You just returned from a risk management conference and are expected to share your findings with the team in a debriefing meeting later today. During the conference you overheard many conversations and saw exhibits on the value of legal spend management (LSM). This is clearly a trend worth mentioning, but you’re still unsure why you need it; after all, your company partners with a third party administrator (TPA) to manage its claims.
No matter what, where, or who, anyone can sue anyone else for anything. This doesn’t mean any lawsuit will make it past a motion to dismiss and it certainly doesn’t mean they’ll win, but anyone can sue for anything and make you spend money to defend yourself.
Negligence law falls under the legal category known as torts, a term for when someone harms someone else. The person being sued is known as the tortfeasor.
It's no surprise to most of our clients that legal fees have been on the rise. A recent study by Citi Private Bank looked at some of the data behind this trend, and found that legal fees for the first half of 2016 grew even more sharply than for the same period last year. Most of this growth can be attributed to an increase in billing rates, but an increase in head count at the firms and declining productivity are also to blame.
We put together an infographic below to summarize this trend, which reinforces the need for corporate risk, claims, and legal departments to have their outside counsel invoices reviewed by an experienced third party consultant.
