Legal spend management requires strategic methods and tools in order to streamline and optimise the procurement and expenditure processes utilised by buyers of legal services.
Joanne Rees, the founder and CEO of Allygroup and AllyOne, brings years of experience in both traditional and technological spend management approaches.
Joanne shares how the synergy between best practice legal spend management methodologies and AI-driven legal technologies transforms how legal services are delivered, monitored, and optimised, leading to significant improvements in service quality, cost efficiency and strategic alignment.
Traditional Approaches to Legal Spend Management
Traditional spend management in legal services often relies on manual processes and basic software solutions. These approaches generally include:
- Manual Tracking: Using basic spreadsheets and database software to track expenditures and manage budgets.
- Outdated Negotiations: Engaging in periodic negotiations with service providers to ensure favourable terms and conditions without the assistance of advanced analytical tools.
- Regular Audits: Conducting regular manual audits of legal expenses to identify inefficiencies and ensure compliance with agreed terms.
- Traditional Competitive Tendering: Sending a legal project to multiple external law firms to provide quotes.
While all of the above methods can provide a basic level of spend management, they are often time-consuming, prone to human error, and lack the dynamic capabilities offered by more advanced technological solutions.
Since establishing Allygroup in 2007, we have worked with government and corporate in-house counsel to help manage and control their legal spend. One of the most common complaints we have heard is that, when requesting legal service providers to cap their fees on a project, the law firm includes all conceivable possibilities in the scope of work in order to manage their risk. Inevitably, the client is then charged that full capped budget, regardless of whether all the work billed was necessary to be undertaken by the firm.
In this context, legal project management (LPM) is a critical strategy used by savvy in-house lawyers to define outcomes, control costs, direct project efforts effectively and manage risks. During the 17 years we have been rolling out LPM solutions for our clients, we have devised a methodology that helps clients ensure that only necessary work is done by the right level of resourcing, when it needs to be done. This methodology has provided significant cost savings as clients are no longer required to pay for unnecessary work or inefficient resourcing across their legal projects. As described below, that methodology has now been digitally enabled in the AllyOne software platform.
Transformative Approaches to Legal Spend Management
Many of the current solutions available to general counsel to manage legal spend can be bundled into three main categories:
+ e-billing solutions
+ procurement tendering platforms
+ project management tools. 
When deciding on a technology investment, it is crucial to choose solutions that will transform and improve outcomes, rather than perpetuate inefficient processes.
It is also essential for in-house lawyers to adopt new perspectives on several key aspects of legal spend management:
• Proactive Focus on Outcomes: Prioritising desired outcomes from the outset is crucial for managing expenditures and realizing substantial cost savings.
• Collaborative Fee Arrangements: Legal fees can be capped effectively through collaborative negotiations with your law firms.
• Efficiency Over Micromanagement: Shift away from the tedious task of checking time entries to assess billing practices and focus on more strategic aspects of legal project management.
While traditional methods still hold value, the adoption of advanced technological solutions provides a competitive edge by delivering greater efficiency, transparency, and strategic insight. As the legal industry continues to evolve, leveraging these technological advancements will become increasingly essential to maintaining robust and responsive legal spend management systems.
The AllyOne software platform is a comprehensive legal spend management platform which offers a holistic approach to managing legal spend. It integrates LPM spend management methodology, e-billing systems and procurement solutions, along with advanced analytics and AI-driven insights, to provide a robust tool for legal departments. And importantly, the methodology of setting strategic outcomes and collaborative costing for budget certainty is baked into the technology.
To find out more or book a demo of the platform, visit: www.allyone.com.au