Warning Bells

I spoke last week about Litigation Management best practices to an audience of 35 of America’s largest companies, a group representing many major industries – pharmaceutical, auto manufacturing, retail, financial services, transportation, construction, food.  Most of these companies have a good reason to be interested in improving their litigation management, because they face hundreds of litigated matters every year and collectively (sometimes even individually) they spend hundreds of millions of dollars defending and resolving cases that significantly impact their companies’ prospects and profits.

As we discussed the types of reports that can provide needed comparative data about phases of litigation, one gentleman asked where he might get such information.   Good question, but an easy answer, I said.  You run these reports out of the e-billing system.  All the e-billing systems I know of can align the data in the way we were discussing.

This was when the first warning bell sounded.  He said, “what is e-billing?”

Astonished, I asked my audience members who were using e-billing to tell him about their various e–billing systems.  The second warning bell took the form of complete silence.

I asked the audience to indicate who was using e-billing.  Out of the 35 assembled major US companies, only three were using e-billing software!  Less than 10% of these companies were using a basic tool to manage matters that have exposures exceeding a billion dollars and costing them millions in legal fees and other costs.

 Ok, I thought, we have to take a step back here and focus on some basics.  So, I asked those three how they were using their e-billing software.  Were they using it to create cumulative information libraries and to generate the kinds of typical comparative reports that are “baked into” the software?

 The third and final warning bell sounded.  No, they answered.  They were using it primarily to monitor and pay legal bills and flag bills that charged excessive rates or added too many timekeepers to the team.  Certainly that is a one use, and a good use, of the software, but it is like using a Ferrari to plow the potato field. The car can perform that function, but it can and should do so much more.

 In these times when “managing the legal spend” has become top priority, there is little excuse for failing to take advantage of readily-available data-mining tools that are both sophisticated and relatively easy to implement.  I don’t know if the low rate of e-billing usage was because the companies just didn’t know about the concept, did not know who to put in charge of it, or feared the cost of purchase, installation and management of e-billing.  Yes, it is possible for large organizations to manage some matters without investing in up-to-date software tools.  But it is a false economy.   If you are trying to learn from the management of those matters and develop information that can be used going forward, you absolutely need the most powerful tools.  What occurs when legal departments go beyond just paying bills with the e-billing software is something like this:

Data ► Information ► Knowledge ► Judgment

Of course, if you don’t possess and use the initial data-gathering capability, you’re nowhere: no data, no information, no knowledge, no wisdom, no historical basis for judgment.  For legal departments’ top decision-makers, this should be an unacceptable equation.

© 2010, Edge International US, LLC.  All rights reserved.

No part of this post may be copied or reproduced without the express permission from Edge International US, LLC.

This entry was posted in General Counsel, Legal Spend, Outside Counsel. Bookmark the permalink.

One Response to Warning Bells

  1. Pingback: Legal Management Potpourri « LawLearn

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