LSM Lessons: Associated British Foods and EDF
Legal spend management software solves several different challenges depending on the organisation. During the pandemic specifically, this could be as fundamental as no longer being able to review and pay paper-based invoices in the office. For Associated British Foods (ABF), who were already using eBilling before lockdown, usage of the system increased because remote working meant eBilling was the only option! However, legal spend management software really comes into its own when applied strategically.
For ABF, this meant maximising volume discounts with firms. Daniel Wate, their Legal Technology Analyst says, “Legal isn’t revenue-generating, so we implemented legal spend management software to ensure we were spending responsibly and give us accountability. With last year being challenging, for example, the temporary closure of our Primark stores, we’ve been more likely to maximise volume discounts with firms, something we couldn’t do unless we knew what we were spending”. This has been achieved by consolidating the number of firms and reaching volume thresholds faster. Another savings area is through using spend data to make the case for hiring internally, “we’ve noticed that sometimes it’s cheaper if we hire someone else rather than using a law firm”, Dan explains.
As Managing Legal Counsel, Lynne Kellett says that EDF UK NNB (EDF) use the tool for a similar purpose, “We leverage local firms as an extension of the in-house team so we need spend data to encourage our firms to deliver additional services and value add in line with our panel arrangements.”
Even in BAU times, spend management is an important strategic tool. ABF started their eBilling journey in 2012. Daniel reflects, “It was a very manual process. We spent a lot of money but didn’t know with which firms, how many firms, where in the world, who was instructing the firms or how much we were spending!” They also had a suspicion that the rule, “legal must be notified before engaging law firms” was not being followed. Using eBilling.Space has allowed them to control this more effectively.
This cost visibility is also important for EDF. Lynne remarks, “the General Counsel wanted to “press a button” to find out how much was being spent, when, and where, without using spreadsheets”. Legal spend management tools today go beyond the process of eBilling, with RFP, WIP, vendor management and complex analysis and prediction capabilities now commonplace. EDF was looking for such a tool, after identifying that the end-to-end process for engaging firms was just as important as tracking the costs. Freeing the team from admin and reporting was also critical.
Involving Stakeholders in the Legal Spend Management Project
Although the primary users of legal spend management software, the legal team are not the only stakeholders and it’s important to involve other departments in the project journey. Sourcing, finance, tax and IT are typical examples of functions that need to be involved. They can help you draft RFP requirements, offer a different perspective, ensure legal processes integrate with other departmental processes, and help solidify the business case if the tool benefits more than just the legal team.
Involving finance was particularly key for EDF since reporting to finance was a heavy administration burden before they implemented eBilling.Space. Lynne remembers, “part of the streamlining of the process was to remove some of those manual steps, so we wanted to make sure the output would still meet finance’s requirements”. Lynne also recommends getting help from IT as they have experience rolling out tech projects, but cautions it may take longer than you expect, “legal are not profit-generating like other departments so you need to make your case early and strongly!”. Daniel echoes this sentiment, “while IT is a useful resource because they do rollouts all the time, they are busy and you will have to join a queue. So get them involved as soon as possible and communicate often”.
Future Legal Spend Management Plans
As referenced earlier, legal spend management is more than just eBilling. In the near future, EDF plan to make use of the RFP tool in eBilling.Space but also want to report objectively on how law firms are delivering additional value. Lynne explains, “The longer we use the software, the more data, and more consistent data, we are getting about our firms. This will help us drive not only the best price but the best value – especially for larger projects. This is win:win – it’s not free for law firms to give us these value-adds, so tracking it means we can recognise it”. Being able to do this in one single system means avoiding yet another spreadsheet.
Next on ABF’s agenda is billing guidelines, which are already in place for the company’s USA law firms but they plan to implement them throughout the rest of the world. Using eBilling.Space for driving value is also important though. Daniel says, “we pull a lot of reports but don’t get the maximum benefit from them, we need to think how we can use them to drive discussions with and leverage usage of law firms.”