Wolters Kluwer ELM Solutions podcast examines rise in corporate legal departments’ outside spend

Rhea-AI Summary

The latest ELM Solutions' LegalVIEW Insights report reveals a significant rise in corporate legal department spending, with a 21% increase in median outside counsel costs and a 36% mean increase in 2021. As firms push for higher rates, in-house teams are encouraged to adopt legal spend management tools like LegalVIEW BillAnalyzer, which can yield up to 10% cost savings. The report, based on $155 billion in legal invoices, emphasizes the need for proactive rate management in the evolving legal landscape.

Positive

• 21% increase in median outside counsel spend for corporate legal departments in 2021.
• 36% increase in mean outside counsel spend in 2021.
• LegalVIEW BillAnalyzer can save up to 10% in costs and increase billing compliance by up to 20%.
• Provides industry benchmarking data for better negotiations with law firms.

Negative

• Rising legal fees may cause 'sticker shock' for corporate legal departments.
• Many in-house teams lack sophisticated rate management programs.

Data from ELM Solutions’ LegalVIEW database shows that spend is up even as vendor counts decline

HOUSTON--(BUSINESS WIRE)-- The legal industry is no longer a buyer’s market, with the most recent edition to Wolters Kluwer ELM Solutions’ LegalVIEW Insights report series finding that corporate legal departments (CLDs) experienced a 21% increase in median outside counsel spend and a 36% increase in mean outside counsel spend in 2021. A new installment of ELM Solutions’ Legal Leaders Exchange podcast sheds further light on that data, exploring why some corporations may be paying higher legal fees, as well as offering strategies that in-house counsel can leverage to help negotiate better rates with their law firm providers.

ELM Solutions experts Jeffrey Solomon, Senior Director of the company’s LegalVIEW BillAnalyzer spend management solution, and Nathan Cemenska, Director of Legal Operations and Industry Insights, explain that many law firms began advocating for higher rates to counterbalance the rigorous cost controls enacted by some CLDs during the pandemic. They also note that many in-house legal teams still lack sophisticated rate management programs capable of establishing well-defined billing guidelines and evaluating law firm invoices for compliance.

Solomon and Cemenska theorize that a bump in rates – and the resulting “sticker shock” – could spur more CLDs in the direction of technologies such as LegalVIEW BillAnalyzer, which leverages AI to deliver an up to 10% cost savings and up to 20% increase in billing guideline compliance while also providing in-house teams with the industry benchmarking data they require to engage in more proactive discussions with their law firm providers.

“We run into many law departments who take what their law firms say as gospel because they value the relationship and are afraid to have a more explicit discussion,” Solomon says. “But if you ask for preferred rates or discounts in exchange for more business, many firms will accommodate those requests.”

“Corporate legal departments can’t afford to place their rate management programs on autopilot,” Cemenska says. “If they do, the situation will likely become critical within six months’ time.”

The LegalVIEW Insights program is a series of reports, blogs and webinars that draws from the more than $155 billion in real legal invoice data contained in ELM Solutions’ LegalVIEW database. Published earlier this year, the fifth LegalVIEW Insights report examines trends in vendor mix and total outside spend.

ELM Solutions, part of Wolters Kluwer GRC, is a market-leading global provider of enterprise legal spend and matter management, contract lifecycle management and legal analytics solutions. The company provides a comprehensive suite of tools that address the growing needs of corporate legal operations departments to increase operational efficiency and reduce costs. Corporate legal and insurance claims departments trust its innovative technology and end-to-end customer experience to drive world-class business outcomes. The other legal solutions business of Wolters Kluwer GRC is CT Corporation. The division’s banking and regulatory compliance businesses are Wolters Kluwer Compliance Solutions and Wolters Kluwer Finance, Risk & Regulatory Reporting.

Wolters Kluwer ELM Solutions was named a leader in both the IDC MarketScape: Worldwide Enterprise Legal Spend Management 2020 Vendor Assessment and IDC MarketScape: Worldwide Enterprise Matter Management 2020 Vendor Assessment. The company’s award-winning products include Passport®, one of the highest rated ELM solutions in the latest Hyperion MarketView™ Legal Market Intelligence Report and TyMetrix® 360°, the industry’s leading SaaS-based e-billing and matter management solution. CLM Matrix, meanwhile, was named a “strong performer” in The Forrester Wave™: Contract Lifecycle Management For All Contracts, Q1 2021 report. ELM Solutions’ LegalVIEW® portfolio of legal analytics solutions is based upon the industry’s largest and most comprehensive legal spend database, with more than $150 billion in invoices.

About Wolters Kluwer

Wolters Kluwer(AEX: WKL) is a global leader in professional information, software solutions, and services for the healthcare; tax and accounting; governance, risk and compliance; and legal and regulatory sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2021 annual revenues of €4.8 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 19,800 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221122005164/en/

Media Contacts for Wolters Kluwer Governance, Risk & Compliance (GRC) Division

(including Wolters Kluwer Compliance Solutions; Wolters Kluwer Finance, Risk & Regulatory Reporting; Wolters Kluwer ELM Solutions, and Wolters Kluwer CT Corporation):

Paul Lyon

Senior Director, Global Corporate Communications: Global Marketing, Communications & Planning

Governance, Risk & Compliance Division

Wolters Kluwer

Office +44 20 3197 6586

Paul.Lyon@wolterskluwer.com

Frank Ready

Senior Specialist, Corporate Communications, Legal Services

Governance, Risk & Compliance Division

Wolters Kluwer

717-205-3647

Frank.Ready@wolterskluwer.com

Source: Wolters Kluwer

FAQ

What were the key findings of the ELM Solutions LegalVIEW Insights report for WTKWY?

The report highlighted a 21% rise in median outside counsel spend and a 36% increase in mean spending in 2021.

How can LegalVIEW BillAnalyzer benefit corporate legal departments?

It can provide up to 10% cost savings and a 20% increase in billing guideline compliance.

What challenges do corporate legal departments face according to the report?

Many lack sophisticated rate management programs, leading to potential overspending.

What is the significance of the $155 billion data in the LegalVIEW report?

It represents real legal invoice data that informs trends in legal spending.

How does the increase in legal spending impact companies using WTKWY?

It may result in higher costs for legal services, affecting budget allocations.