Category: Legal Operations

Ever grabbed an extra cookie from the cookie jar as a kid because you knew no one was watching? Or maybe you skipped out on your last set of reps during a workout because, hey, who’s going to know? 

Sure, we’ve all been guilty of cutting corners when we know there are no consequences. But did you ever attempt to take that cookie with a parent in the kitchen? We’re guessing you probably wouldn’t risk losing precious screen time over one cookie. 

That reaction – not going for the cookie when your parent was right there – is commonly known as the “Sentinel Effect”. The tendency for one’s performance to improve when they know they are being monitored can be observed in all walks of life, both at home and on the job.

The simple act of monitoring – even without applying penalties – is proven to improve behavior. It’s a great passive management technique: show someone you’re monitoring them, and regardless of whether you are actually watching or not, performance will improve. 

This is especially true when managing outside counsel. Historically outside counsel has operated without the oversight – or even visibility – of their clients. That lack of transparency fostered a situation where not only were guidelines consistently ignored, but sloppy business practices were allowed to fester. 

But how do you transparently monitor outside counsel to create the Sentinel Effect? 

The answer is simple — data. All the answers you need are right there in your billing invoices; you just have to know how to use it to create not only a feeling of increased accountability but also to stoke that competitive drive within every lawyer. 

Armed with data, in-house teams have the power to:

1. Enhance Law Firm Relationships

Law firms are retained to act in the best legal interest of the clients, but when it comes to billing, firms are still businesses and can be self-serving. The relationship becomes one-sided as clients are often left as idle price-takers while firms receive hefty paydays. 

Having regular meetings with law firms fueled by a variety of quantitative and qualitative metrics, such as billing rates, discounts, and more, will lead to more effective, robust conversations about what’s working well or where adjustments might be needed. By letting the data do the talking, the conversation is much easier – and clients get better results from their firms. 

Simple practices such as incorporating firm report cards and quarterly business reviews to regularly discuss KPIs serve as a reminder to your law firms that you’re closely monitoring the value the relationship delivers. Nobody likes a “gotcha” moment, so these regular check-ins can help quickly correct firms’ course of action, leading them to become more disciplined in their billing practices and act as a strategic business partner.

2. Eliminate Inefficiencies

From overstaffing to partners handling associate-level tasks, and everything in between, efficiency isn’t always top of mind to law firms. In fact, there’s a strong possibility that the firm that billed the most hours in your panel may actually be the most inefficient.

Inflated invoices are often the byproduct of inefficiency. But transparency on key metrics, like average partner hours, matter duration, or cost can quickly highlight where inefficiencies rack up the cost of your matters.

Examining and discussing these key metrics with your firms regularly shows that you’re analyzing their efficiency and comparing them to other – potentially more efficient – firms. Your firms don’t want to lose your business, so expect a material boost in productivity and the elimination of inefficient practices. Once you show you’re serious about evaluating performance – and value efficiency – managing your outside counsel effectively will be much easier. By using data to set transparent expectations, you provide a clear roadmap to a stronger relationship. 

3. Influence Strategic Decisions

To effectively manage spend you need to think strategically — and to truly think strategically, you need data. Corporate legal departments are increasingly demanding transparency around everything from rates to work allocation to the diversity of timekeepers and more. But visibility isn’t the only thing that data provides.  

Armed with apples-to-apples comparisons and data-backed insights, corporate legal departments can take a more informed, strategic approach towards the major decisions that impact their department and the business. 

For example, as COVID-19 rapidly accelerated the need to optimize spend and cut costs, many corporate legal departments began to reevaluate their outside counsel spend. Many departments needed to quickly review their rates and obtain rate freezes and discounts from their firms. In turn, this forced competitive firms to follow suit. 

4. Drive Down Costs & Increase Savings

Pricing is arguably the most critical part of any business – product or service. By its very nature, pricing is complicated. “Pricing tricks” are a fact of life – that’s true if you’re pricing sneakers or legal services. 

Now, it’s no secret that law firms use “pricing tricks” – some more above-board than others – on both rates as well as in the manifestation of those rates; their invoices. From block billing to unapproved rate increases to footing the bill for printing, there’s no doubt you’ve fallen victim to unnecessary costs. But the good news is that you have the power to change this narrative. 

By leveraging data to track the performance of your panel firms, you can easily identify the common law firm antics driving up your spend and address them quickly. Using data to show a pattern will, almost miraculously, make certain antics disappear. You may have to negotiate or address other patterns by changing your billing guidelines. Nonetheless, data is your launchpad for not just identifying those antics, but for actioning solutions to them (clawbacks and markdowns, anyone?). 

It’s pretty clear that transparency in business – legal or otherwise – has the power to influence performance and drive better outcomes.

But, you don’t have to take our word for it! One of Bodhala’s clients, a major insurance carrier, was having issues with their panel firms consistently exceeding budget on corporate matters. Prior to starting a very large matter merger, the organization’s in-house team worked with Bodhala to create report cards to share with the top firms in their panel. After receiving a detailed analysis of their performance from the insurance carrier, each firm immediately brought down their budget projections significantly.

Without data, you’ll be hard-pressed to hold your law firms accountable for the quality of service you expect. Data sets the foundation for a successful, equitable partnership in which you receive the value you pay for. 

So, will you continue to turn your back on the cookie jar or will you leverage data to drive better business outcomes?

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

Reproduced with permission. Published January 2021. Copyright © 2021 The Bureau of National Affairs, Inc. (800-372-1033) www.bloombergindustry.com.

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

It’s no exaggeration to say that the coronavirus pandemic has affected every single person and business around the world, forcing many of us to rethink what we know about how we work and the tools we need to do it – and legal tech is no exception.

The industry was already experiencing increased adoption and momentum, but the pandemic has forced both law firms and corporate legal departments to do more with less and modernize at an accelerated rate.  

Here’s a look at some of the top trends we expect to see in 2021: 

1. Remote Technology & The Talent Wars

For many, COVID-19 accelerated — and sometimes forced — the adoption of new technology in an effort to keep operations afloat. Businesses will continue to look to legal tech solutions to facilitate collaboration, eliminate man hours spent on menial tasks, measure performance of service providers, manage budgets, and more. 

The normalization of remote work has also opened the doors to a broader talent pool. Businesses are no longer restricted to just the candidates in their geographic area. They are now free to pursue the best talent – but so is everyone else, resulting in some serious talent wars. 

While we do believe physical offices will make a comeback, we foresee many businesses adopting a more hybrid approach that allows them to suit up and battle it out for the top talent. 

2. Artificial Intelligence

As legal tech looks to service more corporate legal departments to transform the tedious, manual tasks that typically waste precious time and resources, AI will become increasingly understood and less stigmatized.

Legal departments will leverage AI to deliver real-time insights, making them more efficient and effective. As we like to say at Bodhala — AI will help ‘let lawyers be lawyers!’

AI is turbocharging the legal industry and as we continue operating in a remote environment for the foreseeable future, expect to see more corporate legal departments adopt legal spend management tools, eDiscovery, contract management, and other legal tech solutions to drive their strategic initiatives,

3. Increased Focus on Data & Analytics

Data has long been the driving force of the strategic decisions in most businesses – from media to manufacturing and everything in between. It probably comes as no surprise, but legal has been a late adopter of data and analytics. But renewed focus on ‘the business of legal’ has forced a data reckoning, with both firms and corporate legal departments taking new interest in how they can leverage data to improve strategic decisions and business processes. 

In-house teams are also now demanding increased transparency from their outside counsel on everything from rates to the diversity of the timekeepers staffing their matters. This demand is driving a need for real-time data and reporting as well.

With cost optimization and diversity efforts assumed to be at the forefront of many corporate legal departments’ 2021 priorities, legal spend management solutions and data visualization tools will become even more prominent in the marketplace. 

4. Cross-Functional Collaboration

Legal departments have often had reputations for being a bottleneck when it comes to decision-making. But organizations are increasingly looking for solutions that support collaboration with legal departments to speed up, not slow down, their decision-making processes. 

In 2021, legal tech won’t just serve the legal department. It will play an integral role in cross-functional collaboration, consolidating pertinent information into one place and streamlining workflows.

For example:

• Finance departments may leverage legal spend management solutions and eBillers to optimize their workflows, consolidate invoices, obtain data-backed insights to support budgeting/forecasting, optimize spend, or report on the health of their bottom line.
• Sales teams will continue to benefit from legal tech tools that decrease sales cycles and simplify the process for prospects, like contract management and e-signature solutions.
• Legal procurement teams will expand their use of data from legal spend management solutions to improve strategic spending decisions and firm selection processes.

5. Continued Disintermediation of Legal Services

As organizations look to become more spend-savvy, disintermediation continues to be a common trend. 

Prompted by the high rates charged by law firms even for mundane tasks or simple matters, many in-house teams are embracing a more economic and efficient solution — Alternative Legal Service Providers, or ‘ALSPs’. 

Lawyers will leverage technology to not only identify target task and matter types, but to also recommend categories that could be outsourced to ALSPs and the projected savings opportunity. 

Thanks to AI, machine learning, and a continued focus on cost optimization and efficiency, we expect ALSP adoption to hockey stick in the next few years.

6. Increased Investment, Acquisitions & Partnerships

The legal services market is a half-a-trillion dollar global industry, and like any massive market opportunity, it’s being disrupted – for the better! The opportunities to service the industry are massive – and innovation is really picking up. And along with innovation comes investment. 

2020, despite all it’s challenges, saw a huge uptick in legal tech investment – from venture capital funding to large scale acquisitions. Growth is also being driven by partnership – both technology partnerships as well as channel partnerships are on the rise. Case in point – Bodhala. In 2020 we closed our $10M A Round in March, and announced our first major partnership with Mitratech in November. 

As products and revenue accelerate growth, we anticipate interest from the investment community to continue to grow — undoubtedly making 2021 increasingly exciting! 

Looking Ahead

Though we hope that our world can slowly begin to return to normal in 2021, the events of 2020 have certainly proven the long-term value legal tech solutions can provide. 

It’s more than likely we’ll see the newly adopted practices and technologies adopted in 2020 remain in place for years to come as the legal industry has slowly unearthed the benefits technology and innovation present. 

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

It’s been nine months since we last set foot in our New York City office, shared stories with each other “around the water cooler”, grabbed lunch with coworkers, or held company-wide meetings in-person – rather than in “gallery view”.

We could have never predicted how tumultuous 2020 would be: A global pandemic, an economic crisis, civil unrest, racial injustice – all amidst an election year, no less! 

As a startup, we’re accustomed to being scrappy and adapting on the fly, but I think it’s safe to say that 2020 has certainly redefined what that means. As I replay the last several months in my head, I’m in awe. Despite the challenges, the uncertainty, the spotty WiFi connections, the guest appearances by our kids in Zoom meetings, and the journey to maneuver the “new normal”, Bodhala has thrived.

Spend management has never been more important – and it shows. 2020 has undoubtedly been the biggest year yet for our business. I’m incredibly proud of our team’s commitment to our mission, and can’t wait to see what 2021 will hold for Bodhala. 

Check out these highlights from 2020: 

$10M Series A Funding 

In March we closed our first institutional round with a $10M growth investment led by Edison Partners. Edison Partners understood our mission to create a transparent market for legal services by leveraging data to drive price discovery and innovation. Since our funding we’ve expanded our product, accelerated our sales and marketing efforts, and enhanced our machine learning to deliver even more to our clients. Edison has been a fantastic partner over the last several months and we look forward to continued success in our partnership.

New Product Features

We’ve enhanced the product tremendously over the course of the year, rolling out new features that will better serve our clients. Take a look at a few of the new features we launched in 2020 to help clients surface sophisticated insights on their outside counsel spend:

• AmLaw 100 Market Benchmarking – Compare firm rates against relevant AmLaw 100 competitors, on everything from matter-type to partner-hours and gain the upper-hand in your law firm negotiations.

• Internal Benchmarking: Firm Report Cards – Compare individual firms against relevant competitors in your panel, with granular rate analysis by practice area or matter type. Shareable benchmarking reports for each firm drive transparency and encourage better business practices
• Savings Calculator – Instantly calculates overall impact to your spend, allowing you to drill down on rates across firms, practice areas, and matter types to identify savings opportunities.

New Partnership – And More To Come!

We recently launched our partnership with Mitratech, a leading global provider of legal and compliance software. The combination of Mitratech’s robust workflow and eBilling solutions with Bodhala’s proprietary machine-learning engine will allow companies to visualize their legal spend data in new ways and unearth powerful insights that support better business outcomes. Mitratech is a pillar in the legal tech industry, and we are thrilled to integrate Bodhala’s market intelligence with their world-class solutions to deliver sophisticated insights to our customers.

And look out for more exciting partnerships in 2021!

Diversity Report: Dismantling the Barriers to Racial Diversity at Elite Law Firms

At Bodhala, we believe that everyone has a part to play in the fight for equality. We wanted to take action that could help drive real change, going beyond the virtue-signaling we so often see from others. So, we put our minds to addressing the stark lack of diversity in the legal profession, specifically the dismal number of Black equity partners at elite law firms. Our report, “Dismantling the Barriers to Racial Diversity at Elite Law Firms,” takes a deep dive into the history of this issue, the minimal progress that has been made over the past few decades, and offers concrete steps corporate legal departments can take to hold their law firms accountable. I am incredibly proud of the work each member of our team is doing to address this issue and we’re hopeful that true change will come. 

Awards & Recognition

We’re honored and humbled to be recognized as the Legal Spend Management Innovation of the Year by Legal Tech Breakthrough and as an Emerging Startup of Legal Tech by Tracxn. 

Read All About It!

In a year filled with such big news for Bodhala, we’ve been fortunate enough to have numerous media outlets take interest in the work we’re doing to transform the legal industry. From discussing the opacity of the legal services market on Nasdaq Trade Talks to diving into Big Law’s Lebron James problem with Industrial Exchange to sharing insights on hypothetical election outcomes with Radiolab, we’re thrilled to be a source of industry knowledge for such reputable outlets. 

It’s safe to say that we’re all more than ready to bid adieu to 2020, but there’s no denying that this year was a defining moment for Bodhala. Strong teams are the foundation of success and I am incredibly proud of the tireless efforts of each team member here.

Stay tuned because we’ve got more exciting news, new features, and great content coming in 2021! 

Looking forward to a bigger, better, and healthier 2021, 

Raj

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

Raj Goyle, CEO of Bodhala, and Darren Guy, Chief Operating Officer of Global Legal, Compliance and Regulatory Affairs at AIG, sat down together – virtually, of course – to discuss his data journey at AIG and how Bodhala’s technology has empowered him to optimize spend and business operations.

Darren is the epitome of an innovator in the legal operations and spend management space, and we’re thrilled to be able to share his insights with you.

RG: Darren, thanks for taking the time to speak with me today. I’m excited to delve into the legal operations and data transformation you’ve led at AIG. Now, you’ve mentioned to me that when you arrived at AIG, the legal billing data was quite decentralized and bespoke? Is there a value that Bodhala now brings by centralizing and standardizing your data?

DG: Since arriving at AIG in early 2018, my team and I have worked diligently to revamp the foundations of our legal expense data analytics program while rebalancing our overall technology portfolio, enabling quicker management decisions and continued excellent legal outcomes, while bringing down total overall enterprise cost. We have combined internal “old school” finance techniques such as standard financial reporting and analysis discipline with more modern (and increasingly cheaper) SaaS-based external vendor data visualization applications (such as from your company), which allows our department to be more nimble and cost-effective. Bodhala has played an important role in these recent transformational efforts, as we continue to improve legal expense efficiency and performance through improved data visualization efforts.

We had been creating reports before Bodhala, but due to somewhat decentralized operational processes that created inconsistent data elements, it was extremely difficult (and time consuming) to make sense of our data in a timely fashion. Legal costs, particularly legal claims litigation expenses, play an integral role in the bottom line of any insurance company. It’s imperative our leaders have the best quality data as soon as reasonably possible in order to make proactive case management decisions. If you’re unable to quickly identify meaningful data trends and anomalies in your business lines, that can translate into significant missed opportunities for any company. 

Bodhala’s anomaly detection and data visualization capabilities help me bring a bunch of disparate data sources together to make better sense of our management information. By cleansing and restructuring our data, Bodhala has allowed us to reset and improve our reporting and analysis deliverables for my corporate legal and claims colleagues, fueling more consistent and proactive management decisions.

RG: How do you approach change management in such a large organization that might be set in its ways?

DG: I think change management has been the hardest part of my job — much more difficult than procuring different technology solutions or creating new policies. But that’s not exclusive to AIG by any means. Insurance is a very established industry with norms that can be hard to break. 

As we seek to improve data analytics capabilities at such a large organization with a long history of doing things a certain way, we are increasingly mindful of the importance of effective overall operational procedures and strong data governance policy. Data visualization programs are more successful when working in tandem with consistent procedures that produce common data elements. If you don’t have effective operational “golden rules” that govern your key data elements, any corporate technology application will struggle to be successful (i.e., the often-used analogy about garbage in, garbage out).

RG: What has been your primary tactic with your team in order to build an effective legal operations function? 

Since my arrival at the beginning of 2018, I’ve spent a significant amount of time promoting cross-training and collaboration opportunities within our AIG Legal Operations team so everyone understands all of the important functions of legal operations as a business; not only how they can improve the efficiency and effectiveness of our AIG Legal Compliance, Regulatory and Government Affairs/Public Policy team, but also how our hard work contributes to solving some complex problems for AIG in a way that minimizes risk while improving financial performance. As I’ve said many times to our employees internally, we only have one stock price. 

RG: The word “relationship” has been overused to stand as a proxy for economic and business value. The question we’re asked all the time is – how does the use of data in your industry affect the “relationship” with a law firm? How do you handle that?

DG: Meaningful data visualization techniques (i.e., presenting management information in a clean and easy to digest fashion) is key to having real and robust periodic conversations with your law firm strategic partners. Note I said strategic partner, not vendor, as we are not buying pencils here; rather, we are cultivating significant enterprise relationships and so a variety of both quantitative and qualitative metrics can support meaningful discussions about what is working well with a particular firm, or perhaps identifying areas where adjustments may be needed.  It is important to conduct a healthy dialogue and share an honest assessment of the overall value a firm brings to your company, and Bodhala helps us do that by presenting information from disparate data sets in a clean and professional manner. Bodhala’s Firm Report Cards provide a centralized snapshot of our top matters, top billing rates, and discounts, partner/associate staffing ratios, plus a host of other metrics/KPIs as defined by us. 

We get more out of these meetings in terms of real two-way constructive feedback when we can demonstrate command of the KPIs/metrics via effective data visualization approaches, which allows us to pivot to more constructive and impactful conversations about effective case management strategies and outcome-based value pricing techniques. If you don’t have an accurate understanding of “time value of money” economic concepts for your legal matter portfolio, it is hard to drive real efficiencies in your organization through pricing modernization. 

RG: We run into potential customers who think they don’t need Bodhala because they have an eBilling system in place. AIG uses both – can you explain how your eBiller and Bodhala work together? 

DG: EBilling applications are important and necessary, but in my opinion, are increasingly “table stakes” in an organization, as they are still just a collection of flat files heavily dependent on law firm billing accuracy and consistency. Bodhala can be a more dynamic addition to your technology portfolio, with its proprietary Hercules engine cleansing eBilling or other key department data, acting as a reporting “turbocharger” of sorts for an organization, providing usable analytics required to run a data-driven legal business. The ability to cleanse and restructure information can be critical for a larger organization still in the journey of cleaning up decentralized matter management practices. One other big advantage is the ability to enrich e-standard eBilling data with meta/contextual data from other sources and have it analyzed in one place. It gets us closer to truly understanding the “why” instead of the “what just happened”, which can lead to better intelligence and ultimately better pricing.

Also, as the costs of technology applications decrease significantly due to SaaS-solutions in the Cloud, companies can now rebalance their total technology portfolios in a way where they can spend less on their technology portfolio overall while adding more advanced (but complementary) anomaly-detection data visualization products such as Bodhala to their eBilling applications, while also separately investing in more workflow tools for Legal attorneys and Compliance professionals. In short, as costs have come down, we’ve been able to provide more smart technology solutions to our customers. I expect peer companies of our size will ultimately take advantage of both eBilling and advanced analytics platforms in the future. 

RG: Could you manage your department at scale without Bodhala?

DG: Of course. We could get the same metrics and measures without Bodhala, but it would take us more time and would require more resources. We can scale much more quickly with Bodhala. We help manage a significant amount of legal spend in our portfolio across many insurance business lines, so for me, managing every available expense lever appropriately is like a giant Rubik’s Cube, and it takes every forward-thinking tool in our toolbox – and that’s why we ultimately decided to add Bodhala to our product mix. Our ultimate goal is to help our attorneys manage our legal matters in the most efficient and effective way possible, and Bodhala helps me and my team do that by augmenting our data analytics program in a way that appropriately balances legal risk with economic discipline. Our legal operations mission is to always find the best combination of “right firm, right price”, leading to the optimal outcome for AIG and its insureds.

RG: If you found someone who is beginning their legal operations journey, what advice would you share with them?

DG: First, surround yourself with people who are energetic, intelligent and inquisitive, with expertise in a variety of areas (e.g., finance, operations, IT, project management, information management, administration) who can help you manage the business of law. 

Next, create an effective working partnership between legal and finance, as soon as you can. I think a lot of companies overlook that portion of the legal operations job. And don’t underestimate the role that proactive communication and expense transparency play with your internal corporate and business partners, and how that translates into improved collaboration and trust throughout your organization. No shocker here, but business folks are full of numbers people, and they simply want to be included in what’s going on. A good legal operations liaison should be able to effectively communicate how your company is proactively balancing both external and internal resources and expense ratios to manage one of the biggest and most volatile expense lines at the company. Communicating the value of the legal team using clear and concise data is critical to maintaining credibility and enhancing the legal department’s reputation within an organization.

But regardless of your industry, don’t shy away from advances being made in data sciences and information management. Because at the end of the day, isn’t the entire goal of Legal Operations to present information to management in a way that helps efficiently solve complex problems? Use it to drive efficiency, to increase the speed of management decisions, and ultimately to demonstrate to your organization that you’re getting the most value from every dollar that is spent on behalf of legal services.

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

We’re excited to announce that Bodhala was selected as the winner of the ‘Legal Spend Management Innovation of the Year’ award in the 2020 LegalTech Breakthrough Awards! 

LegalTech Breakthrough is a leading independent market intelligence organization that evaluates and recognizes standout technology companies, products, and services throughout the globe. The LegalTech Breakthrough Awards honor excellence and recognize innovation, hard work, and success in a range of LegalTech categories.

“Bodhala’s technology solutions are driving innovation in the industry by helping legal departments find the right lawyer at the right law firm at the right price.”

– Bryan Vaughn, Managing Director of the LegalTech Breakthrough Awards.

We are extremely proud and humbled to be recognized as a leader and innovator in legal spend management. We look forward to helping more organizations improve their strategic spending by bringing rigor and sophistication to their legal spend management processes.  

To learn more, please read the full press release here.

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

The changing nature of law firm business models has left many general counsels in the dark when it comes to understanding who at their law firm is being rewarded for the dollars being spent with the firm.

In fact, a recent survey of general counsels and senior in-house lawyers found that over half of the respondents were completely unaware of how origination credit is awarded. 

Given origination credit is the largest factor driving ownership stakes at law firms, this statistic is alarming. 

But it’s particularly alarming considering that our latest report found that the average number of Black equity partners at elite law firms was just 1.84% in 2019. A less than one percent increase from where that number stood in 1991.

This lack of awareness by general counsels is detrimental to Black and other underrepresented attorneys that often get snubbed from origination credit. All too often the credit for client acquisition is “already spoken for”, resulting in lower compensation for the attorney and oftentimes, prompts the attorney to leave the firm altogether. 

Clients – corporate legal departments – have the power to change this narrative. Data is helping drive the charge.

It’s increasingly important to companies that their vendors reflect their values – especially when it comes to diversity. But to ensure real progress among minority partners and associates, clients need to understand the implications of origination credit and the negative role it plays in holding back minority lawyers from achieving equity partner status.

Origination credit should not be doled out based on internal political games – though that is precisely how it is most often done. It should be consciously allocated by a client who clearly communicates which partners they consider core to the relationship.

Corporate legal departments keep BigLaw alive, yet most underestimate their leverage. Companies must hold their law firms accountable for how partners are compensated and how they prioritize diversity initiatives.

GCs, DGCs, and their teams must evaluate which partners are important to their portfolio of work, determine whether or not their firms are seeking out or nurturing minority partners, and monitor whether those partners are actually getting origination credit for the large sums of money being spent with the firm. If not, in order to promote real progress in diversity, companies must be willing to walk away. 

These aren’t always easy conversations to have, but they’re necessary to drive change and create a system in which minority lawyers can thrive. 

To help you get started, we have created a free template letter that corporate legal departments can utilize to kick off the conversation on diversity with their law firms. Download your free origination credit letter template today!

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

We are excited to announce that Tracxn has recognized Bodhala as an “Emerging Startup of Legal Tech”. Tracxn is a leading technology platform trusted by VC, PE, M&A, and Innovation teams to track startups and private companies across over 500 sectors.

Tracxn’s Emerging Startups Awards acknowledges a carefully curated list of high growth and high potential companies that are making an impact in the legal tech sector. Companies are selected based on a multitude of criteria including market size, investment by marquee investors, execution excellence, and future growth prospects.

Bodhala was recognized  as a “Minicorn” – a high growth, early-stage startup taking business to the next level by scaling up for accelerated growth. 

Following our $10M Series A funding this past April, Bodhala continues to grow rapidly both in headcount and customers, serving leading companies in private equity, insurance, and financial services.

To check out the complete list of honorees, click here.

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

Reproduced with permission from Copyright © 2020 The Bureau of National Affairs, Inc. (800-372-1033) www.bloombergindustry.com.

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.

Not all in-house lawyers handle discovery work. But the reality is that every in-house lawyer needs to take on some discovery work, no matter their area of expertise. Price discovery, that is.

The opacity of the legal services market has led corporations – especially large ones – to be routinely overcharged by their AmLaw 200 outside counsel. Not only are corporations being overcharged, their firms’ rates are growing year-over-year at an unprecedented rate. To put it in perspective, only healthcare premiums have grown more rapidly — with legal nipping at their heels. 

But why? The answer is simple: the legal services market is not an efficient economic market. In fact, you’d be hard-pressed to classify it as a functional economic market at all.

Economics 101

Governed by supply and demand, a functional market economy is squarely grounded by the ability for participants to have price discovery. This allows them to assign a value to the product or service they want to purchase – and determine if the price matches that value. 

This isn’t rocket science. This concept is implicitly understood by everyone — whether they know it or not. And yet despite being a long-standing profession central to the economy, there is no true price discovery for legal services. Buyers cannot assess price in terms of value (perceived or otherwise). They cannot compare their options. Competition is restricted. It’s a mess – a mess that buyers of legal services have to wade through constantly, trying to make the best of it. 

As a result, in-house teams are left at the mercy of their law firms who cite the prestige of their brand and established client relationships as justification for their ever-increasing legal fees. In-house legal teams have little choice but to build “partnerships” with outside counsel and trust that those firms are doing right by them. 

How good is your “good deal”?

Law firms might insist you’re getting the best price – better than everyone else – but can they prove it? Rate discussions often leave in-house teams feeling uneasy and left wondering if they’re really getting as good of a deal as law firms claim – or if law firm antics are at play. 

Law firms obsess over their realization rates. So if you’ve come to an agreement on rates and think you’re getting a good deal, chances are you’re not receiving any deal at all. Why? Because law firms will do everything in their power to manipulate the realization rate for their benefit. By jacking up the number of hours recorded to yield a higher realization rate, law firms give themselves an unwarranted raise year over year.

While it has made things complicated and costly for the buy-side, law firms have thrived on the fogginess of the legal “market”. Even when met with indisputable data and pushback from their client, a leading partner at an elite law firm claimed that they could not believe the data. An for what reason? Simply because other clients were paying the firm’s rack rates, proving that “invisible hand of the market” was at play. The murky relationship between price and value and the lack of true competition on much else other than brand and reputation has certainly padded their wallets.

But despite their hefty bank accounts, it isn’t all roses and lollipops for law firms either. The lack of price discovery in the market has its ramifications for firms, directly correlating with their constant pushback on technology and change.

If no one forces you to change, why change?

The constant influx of cash incentivizes firms to maintain the status quo, stifling competition, and cutting innovation off at the knees. To say that the legal industry is in the late majority of technology adoption would be generous – they’re laggards. This has allowed new business models to start infringing on traditional law firm turf. 

Seeing an efficiency gap and firms’ unwillingness to innovate, ALSPs (Alternative Legal Services Providers) have not only cropped up but gained mainstream acceptance. Tasks – and some types of matters – that used to be billable hours for law firms are now being allocated to faster, more cost-efficient resources. 

Pressure for accountability

The gravity of market inefficiency has been heightened recently due to the global economic crisis caused by Covid-19. Historically, top tier firms have continued to enjoy constant and sometimes accelerated growth during economic downturns. But with balance sheets under more scrutiny than ever, legal spend is starting to be examined in earnest. 

GCs and CFOs across industries can no longer afford to tolerate idle price-taker behavior. 

C-suite mandates to cut costs are straining internal relationships between legal and finance, forcing legal departments to find opportunities for potential savings in each line item of their budgets. Law firm relationships are no exception. 

It’s fair to say that the legal services market is broken, hurting on both the buy- and sell-side. Corporate legal departments are saddled with year over year rate hikes well above inflation, without the tools they need to understand the value they’re getting. Work that used to constitute billable hours for law firms is being siphoned off to more economical service providers.  Overpriced and stagnant.  But does it have to be that way? 

Data: The key to a level playing-field

The simple answer is, no. There’s a treasure chest just around the corner — full of 0’s and 1’s. No, it’s not a special edition of Lucky Charms. It’s data. 

Data has the power to turn in-house teams from price-takers to price-makers. Data puts them in the driver’s seat, giving them the transparency they need to understand the value they’re getting from their firms and optimize from there – be it with rates, efficiency, or stewardship. 

Based on Bodhala platform analytics, our legal experts predict that in-house teams have the opportunity to realize between 15-30% in savings by leveraging their own data. Data is the key to unlocking competitive, market-based rates. But to truly understand if those rates are delivering the value necessary to justify the price, companies need evidence. Data is that evidence.

The legal services market is one in which nearly all buyers underestimate their leverage. In-house teams have the ability to drive real change and break through the status quo on everything from fair market pricing to increasing diversity in the industry. The buy-side is now in a position to use data to incentivize accountability and innovation from the sell-side. If your firms don’t fight for your business by pushing themselves to change, then they’re not a critical partner to your business. 

The reluctance to provide transparency and adopt technology has created a distinct advantage for the sell-side. Continuing down that path puts industry incumbents in a precarious position. 

Disruption is already here for the legal services industry. We need a functional, transparent market for legal services. Advocating for transparency and the active use of data will be the difference between those who succeed in riding the wave of change, and those who drown fighting the tide. 

The question is this: Will you embrace data and transparency before it’s too late?

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Get in touch with our team of legal billing and data experts to find out how Bodhala can transform your legal department.