Improving Legal Expense Management with Technology

Legal expense management can seem like a daunting task with the massive amounts of data generated in the modern world.  Last year, more than 205 billion emails were sent each day by a world population of just 7.2 billion.  While the Information Age presents challenges for corporate legal departments in terms of litigation, e-discovery, and concerns over information security and data breaches, the types and amounts of data now available are valuable tools for managing the cost of litigation and claims.

So what’s the best way to harness legal expense data in a timely and organized fashion so it can be effectively used for managing litigation and controlling costs?  Technology holds the answer.

Data analytics, driven by technology, enables past legal expenditures to be analyzed in a wide variety of ways, leading to a greater understanding of the underlying events and decisions behind typical spend patterns.  The decision making process gets even better as more information is available.  When information is presented in a form that is easier to understand and use, it becomes easier to accurately predict future spend in similar lawsuits or claims.  More relevant controls can also be identified to help outside counsel with adhering to case budgets.

Legal expense management technology allows for legal work in the defense or prosecution of a lawsuit or claim to be organized by category of work or task.  Some examples of broad legal expense categories may include things like “drafting”, “in conference” or “correspondence”.  Tasks may be further organized with an overlay of the phase of the litigation in which the task occurred, such as discovery or trial.  Capturing legal fees incurred to complete tasks in each respective phase builds a complete financial picture of the cost of the matter, by both activity and by phase.


This technology helps us to view data in many different ways, through many different lenses.  Slicing and dicing the data captured in litigation reveals which activities are most prevalent, most effective, and least efficient, as well as the point in time or phase in the litigation in which they occurred.  These views improve decision making, helping with the reduction, avoidance, or cessation of tasks having little effect on case outcome given the price paid for them.  Patterns revealed through this data may also signal when it’s best to engage in settlement negotiations in a dispute.

Historical legal expense data can also be extrapolated to predict the likelihood of similar events occurring down the road.  This information is an incredibly valuable predictor of future expenditures in similar litigation or claims matters.

In-house counsel and claims and risk managers have vast amounts of information available for their use in managing litigation, claims, and the costs incurred in connection with them.  Without the right software or expertise, it can be challenging to identify manageable trends and patterns. Modern legal expense management tools now allow data to be captured in new and unique ways and organized (or reorganized) in to help with managing disputes and costs.  For claims and litigation management, data analytics is an important decision making tool capable of delivering a wide range of financial and strategic benefits.

The change cycle for technology is very short, so it’s important to regularly assess whether you are using the right legal expense management tools in the right way to drive better substantive and financial results in your litigation and risk management matters.  Corporate law, risk, and claims departments should conduct regular inventories of the data in their possession, much of it captured in outside counsel’s invoices, and to insure that the value present in the data is effectively realized in the form of better outcomes and measurable cost savings on legal expenses.

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