Legal analytics

In a COVID-19 economy, law firms and legal departments could be monitoring their respective cash flows more closely, driving renewed interest in e-billing and spend management solutions that can help illuminate potential savings or causes for concern. Still, while the vendors behind those solutions may be seeing an uptick in business, the more sustainable path to growth may revolve around tools that allow employers to better track the productivity of a newly remote workforce.

Other changes or demands with regards to corporate legal or law firm financials may be short-lived. For example, Nathan Wenzel, co-founder of SimpleLegal, said many people are hoping there's a movement away from the billable hour towards fixed fees, but a shift like that won't happen in one swift movement.

"You're going to see a big swing and then you are going to see the pendulum come back. You won't see it come back all the way, and that's kind of how progress happens," Wenzel said.

But law firms and legal departments are reexamining their bottom lines. Wenzel indicated that SimpleLegal has noticed a recent shift in the way existing corporate customers are engaging with the e-billing and spend management on its platform. Traditionally, those clients have been focused on using those tools to help manage or run a legal department more effectively. Now, users are expressing more interest in solutions that help reinforce billing guidelines or analyze law firms and their rates.

"We see a renewed interest in the costs savings side that, quite frankly, when we launched the company we didn't see as much of," Wenzel said.

The ongoing drive towards cost savings has already had an impact not only on the direction of products, but the rollout as well. Jeffrey Solomon, senior director of product management, data analytics at Wolters Kluwer ELM Solutions, said the company is trying to shorten the onboarding process for corporate clients to implement solutions like its LegalVIEW BillAnalyzer Data Service, which was introduced in February.

"What we are trying to do is make it really easy for them to implement this, so where we can provide kind of a best practices approach from both a change management perspective and how they roll this out internally and how they role this out with their law firms, but also in taking it to the next level" Solomon said.

Like SimpleLegal, Wolters Kluwer ELM has also seen the focus of e-billing tools shift from department management to analytics-based decision-making. Solomon said they've seen other providers start to establish bill review practices and build AI solutions, but entering that market may be easier said than done thanks to the volume of data required to power the analytics.

"We have a three-and-a-half-years start on everybody. We have these AI solutions and the benefit of that data and the benefit of dozens of customers working within those AI solutions," Solomon said.

There are other complications as well, including the difficulty of building an e-billing or spend management tool that can integrate across multiple client systems, like finance, patent or HR departments. This may hold especially true as companies continue transitioning to a more remote workforce, something that Wenzel at SimpleLegal expects will linger post COVID-19.

As a result, spend management and e-billing solutions could be leveraged to help law firms or legal departments track the productivity of their employees, whether it's by hours billed or other hard metrics.

"That move requires tools that allow you to measure and understand and to be quantitative. And so that change is the one that will last," Wenzel said.