By Timo Tschersig, Head of Customer Success at BusyLamp, a legal operations software provider.
CFOs are always under pressure to reduce costs, increase revenue and forecast accurately for the future. They can be forgiven for treating legal as a cost centre: a recent survey of chief legal officers by the Association of Corporate Counsel (ACC) found that one-third anticipate outsourcing more work to law firms next year. Outsourcing legal work is unavoidable and therefore one of the biggest potential expenses of any legal team.
There are three main ways legal can reduce costs when it comes to outsourcing: catching erroneous billing from law firms; improving efficiency and therefore reducing how much work is outsourced; and making data-driven decisions on which work to outsource to whom.
The same survey also found that CLOs are implementing new technologies to improve efficiency, and that more than half either plan to adopt a new technological solution or have done so recently. As outsourcing legal work is a necessity, a legal spend management technology solution that provides the ability to use granular spend data to drive more value from firms could be just one way in which legal and finance can reduce costs together. So what is it that holds finance and legal departments back from working together?
The case for a legal-specific solution
Many finance departments do not understand why legal can’t use the enterprise accounts payable (AP) system, but legal invoices are more detailed than other departments’ invoices and the way legal work is procured often differs too. In order to fully understand expenditure and therefore reduce costs in a strategic manner, corporate legal departments need to capture granular information – including detailed breakdowns of timelines, timekeepers and expenses coded against tasks, activities and expenses – than an AP system can manage.
A typical legal team will receive thousands of invoices a year. Because of their granularity, reviewing these invoices manually is time-consuming and prone to error. Different billing guidelines – what firms can and cannot invoice for – exist for different firms. Trying to remember and accurately apply these rules when manually reviewing invoices is a daunting task and mistakes, and therefore over-spend, will slip through the net. AP systems cannot manage these billing guidelines either and there are many other limitations. The answer, then, is to implement a technology that bridges the gap between legal and finance and enables each to work together.
The benefits of legal spend management technology
With the increased pressure on legal departments to improve efficiency and control costs, modern legal spend management solutions are a sensible option as they quickly generate savings that exceed the initial investment.
Legal spend management is the practice of controlling outside counsel spend such as the costs of using external law firms. Management of outside counsel spend involves having visibility of spend, identifying and actioning cost-reduction opportunities, and budgeting future spend. The level of detail provided by a legal spend management solution adds value to legal and finance, allowing legal departments to identify cost-saving measures both in the immediate term and by making use of data-driven strategies for the future. Most legal spend management systems integrate with the enterprise AP system, giving both finance and legal teams the information they need so they can work together smoothly and transparently.
This visibility of spend is especially useful in those situations where it’s not the legal team mandating the law firm. In some companies, business units can mandate firms directly, which is where a centralised legal spend management system can help provide company-wide reporting on total legal spend. This centralisation can also help the company negotiate volume discounts with the firm.
Using legal spend management to reduce costs
Legal spend management software can reduce costs for legal departments by automating invoice review and enforcing legal billing guidelines (rules such as caps on hours, total spend, expenses, overtime or staffing) through e-billing: the core feature of legal spend management solutions. By automating invoice review and guideline compliance with e-billing software, an in-house legal department can save 5% of external legal spend in year one, and 2.5% in subsequent years. It also offers real-time cost transparency, visibility and consistency of how legal bills, matter information and budgets are input, processed and centrally stored. This increased transparency makes budgeting easier and reduces unexpected costs.
As with many software tools, legal spend management dramatically improves efficiency and accuracy. With e-billing, information is automatically processed digitally and centrally with no need for manual sorting and organising. This saves a huge amount of administration time spent doing tasks which carry the risk of significant manual errors, and even makes some tasks, such as data entry, scanning and filing, redundant. With counsel no longer doing these admin tasks, they have more time to do legal work, which can reduce the volume of work being done by firms.
Having real-time, secure, accurate and consistent centralised data saves a lot of time accessing and reporting on documents, legal matters and financials. Custom reports required by the business can be scheduled for automatic creation and delivered to stakeholders in legal, finance, or elsewhere by email.
Over time, the use of legal spend management creates a database of all historic matters and their associated spend, broken down into UTBMS and LEDES codes – an industry standard for coding legal work to a fine level of detail. There will always be a need for expert legal advice from specialist firms and it’s worth paying for it on business critical matters. However, analytics can be used to gain insights into legal spend and inform data-driven decision making by using UTBMS-level codes to compare costs, savings, spending trends and budget-to-actuals across law firms, matter types, practice areas, task codes, jurisdictions, timekeeper seniority, and more. This allows the department to decide where savings can be made, but also where investment is necessary. The goal is to get more value and efficiency, rather than reducing costs for the sake of it.
Modern legal spend management solutions also include tools beyond e-billing and reporting that enable the entire lifecycle of legal work to be completed in a single system. One such feature enables counsel to submit request for proposals (RFPs) and cost estimates to law firms. Pre-structuring the requests in a consistent format ensures a fair and easily comparable response. Proposals are more likely to be competitively priced, as firms know they are competing for the work. Unlike enterprise procurement systems, these estimates also comply with the legal-standard coding that enables a more detailed evaluation of the proposal. Using data from responses and estimates can empower a legal department to make more informed resourcing and budgeting decisions faster. Throughout the course of the matter, law firms can submit Work in Progress (WIP), work completed that has not yet been billed. Unlike accruals, in a legal spend management system this is submitted with the same line item coding as the invoice itself. This gives both legal and finance visibility of upcoming invoices at a granular level and also allows invoices to be pre-approved. At the end of the legal matter, counsel can score the firm within the system and other lawyers can reference this qualitative data when mandating or negotiating with firms in the future.
Providing data to the finance department
Presenting legal spend data in a clear, concise way that gets the message across is a challenge, as different stakeholders will often want the same data presented in different formats. A legal spend management system automates invoice review so data is inputted consistently and has robust reporting tools for all stakeholder needs.
Legal spend management software empowers the legal department to make their own decisions around cost control, without blindly cutting budget in a way that may be detrimental to the business. At the same time, finance has access to the higher-level figures and KPIs that they need either through the legal spend management solution or a seamless integration between that and the AP system.
In order to deliver greater financial benefits to the business, finance and legal departments can put in place Key Performance Indicators (KPIs). These KPIs can be presented in a dashboard within the system, or sent by email to stakeholders on a regular basis.
KPIs worth considering include:
- Total cost of services (inside and outside)
- Legal spend as percentage of revenue
- Budget-to-actual total spend comparison (e.g., percent handled within budget)
- Outside expense versus in-house
- In-house lawyers versus revenue
- Cost per matter
- Cost per lawyer
- Spend after implementing e-billing compared to spend without.
Having one source of truth ensures all relevant data is held in one place. It means higher data quality, with more data available for better analysis and more reliable reports. There is greater transparency and all the information is readily available for the finance department.
Finance and legal: working together
With the increased pressure on legal departments to improve efficiency and control costs, legal spend management software quickly generates savings that pay for the investment so is a popular software purchase for legal operations managers. The benefits of legal spend management software are directly related to reducing costs so it’s easy to prove return on investment quickly.
The best way to improve legal operations to benefit the wider business is by eliminating cost surprises, wherever possible. Given the open-ended, unpredictable and sometimes urgent nature of many legal matters, it’s unrealistic to expect that everything can be accurately forecast. But steps can be taken to minimise the variables, improve the value, and help control overall spend, including some measures available through legal e-billing.
With a legal spend management software solution in place, legal departments and finance departments no longer need to be at loggerheads. In fact, the transparency between the two can only be of benefit to the business. Legal spend management improves reporting and forecasting, helps teams make smarter and more cost-effective outsourcing decisions, provides greater spend visibility as well as facilitating the negotiation of volume discounts, highlights and reduces errors such as overcharging by outside law firms and minimises risk such as exposure or gaps in legal counsel. By working more closely together, both departments not only support each other but also bring greater financial benefits to the business. In anyone’s book, but especially in that of the CFO looking to deliver cost savings across the business, that’s a win-win.
The importance of app-based commerce to hospitality in the new normal
By Jeremy Nicholds CEO, Judopay
As society adapts to the rapidly changing “new normal” of working and socialising, many businesses are working tirelessly to ensure that they have all the necessary safety precautions in place to keep trading. One such sector is hospitality, but the way it typically operates now looks very different to what we were used to seeing prior to the pandemic.
Many pubs, restaurants and other hospitality establishments have now been open for a few months since lockdown, providing much relief and enjoyment to many consumers, as well as getting many employees back into work. However, a core component for businesses to maintain trading in these times is to ensure the crucial safety of staff and customers.
Payments are playing an important role in this and we’re seeing payment technology being implemented in new and unique ways to help make the hospitality sector as safe as possible. One such technology is app-based commerce, which allows businesses to interact with customers in ways that minimises physical contact whilst crucially still enabling engagement.
With table service now mandatory and Test and Trace measures continuing, we’re likely to see this technology being increasingly adopted in the months and years ahead. So, let’s take a look at what its use means for the hospitality industry and beyond and how it lines up with the government’s latest advice for businesses within the sector.
Understanding government guidance
Guidance issued from the UK government expands upon advice already offered by the Prime Minister to the hospitality sector, at the point of reopening back in July. It has been stated that all indoor hospitality is limited to table-service, interaction between staff and customers should be minimised as much as possible, masks are being enforced for indoor hospitality staff and the rule around groups of 6 continues.
At the same time, businesses now have a clear duty to support NHS Test and Trace by collecting names and contact details from customers so they can be reached if a customer/worker tests positive. This is a recent mandatory move having previously been guidance.
What’s more, it’s recognised that payments are a practical tool to help companies adhere to these guidelines. Throughout the pandemic it has emphasised that contactless payments are useful for reducing human interaction and touch points – such as PIN pads.
Early on, we saw the payment industry increase the authentication limit for contactless spending limit from £30 to £45 to help reduce cash purchases, cash machines and PIN pad usage. The Government are strongly encouraging the use of contactless payments in the hospitality sector, however, there’s a big part of the solution that they may have overlooked that can help hospitality businesses meet these guidelines with even greater ease – app-based commerce.
Why use apps?
Apps provide a whole host of benefits and are the perfect tool for not only minimising contact, but also ensuring customers are contactable at a later date, if needs be.
While contactless payments eliminate the need for customers to pay using cash, or touch PIN pads, apps can remove physical human interaction at the point of sale altogether. This is because they enable customers to pay ahead or at the table, meaning they don’t need to leave their seats or regularly interact with staff. And done well they can even be a boost for business, enabling more convenient transactions and higher levels of repeat purchase.
When it comes to ensuring that customers are contactable, apps and e-wallets have a real advantage over traditional card-based transactions and anonymous cash payments. They allow companies to retain details about who has attended an establishment at a given time, enabling them to know whether a customer was present while a person known to be carrying the virus was in the vicinity. The communication advantages of apps also allow establishments to manage their footfall and customer flow.
The role of app-based commerce in the new normal
Apps will become more and more important for all types of businesses, as consumers shift their behaviour towards digital. They represent a new ‘real estate’ for retail and other businesses to manage – to present their brand in the right way, to engage customers and drive transactions.
Recently, we’ve seen Apple support this move towards app-based commerce with the launch of App Clips, further bolstering its use as we emerge from lockdown and encouraging safer and hygienic ways to pay.
App Clips are a great way for consumers to quickly access and experience what an app has to offer. They are fast and lightweight so a user can open them quickly and start and finish an experience from an app in seconds. And when they’re done, the business can offer the opportunity to download the full app from the App Store.
We are also seeing a number of hospitality businesses warming towards the use of app-based commerce and doing a great job of implementing it. The technology has already become central to the safe trading operations of big names in the industry such as Caffè Nero and The Young’s Pub, which are great examples of how to make apps work for your business.
As the industry steadily navigates its way through a new normal of operating, we expect that app-based commerce will skyrocket. In fact, we’ve already seen a great number of businesses throughout different industries expressing interest in the payment method, suggesting that it will play a pivotal role in moving forward. It certainly is a great way for businesses to keep staff and customers safe.
Why the FemTech sector might be the sustainability saviour we have been waiting for
By Kristy Chong, CEO & Founder Modibodi ®
Taking single use plastics out of circulation is no easy feat, but the answer might lie closer than we think
FemTech: The Beginnings
The term FemTech was initially coined to describe the powerful offering from tech start-ups as they ventured into developing revolutionary products centred around women’s health needs. Whilst the beginnings were humble, we have seen a whole host of innovations enter the market which have changed the game for women and business leaders around the globe.
Fast forward to 2020, FemTech is an industry predicted to be worth $50 billion by 2025 and a powerhouse that is not just tackling women’s health issues but also helping to solve major environmental and sustainability crisis that we face today.
The fearless female entrepreneurs have founded and grown businesses that are continuing to help women across the globe deal with issues such as fertility, periods, sexual wellness, pregnancy and many others. And the best is yet to come.
It is a Man’s World
Traditionally, both technology and medical sectors have been very slow in tackling women’s issues and notoriously lagged in developing products and tools that address issues predominantly affecting women. Whilst figures show that women spend 29% more on healthcare than men, only 4% of overall R&D funding goes towards developing products for the women’s sector therefore the market is ripe for disruption.
As a woman, a mother and entrepreneur I knew that like many others I had to take matters into my own hands.
Following an incident with incontinence whilst training for a marathon in 2011 after the birth of my second child, I recognised the need to innovate apparel that offered a dignified, supportive and sustainable solution for women to manage leaks from periods, incontinence and everything in between. After two years of product development and over 1000 scientific tests, I founded Modibodi in 2013 with a long term view of breaking taboos, opening minds and offering a reusable, sustainable option for sanitary products that’s not just for women – but for the benefit of all bodies on this planet and the environment too. Now, we’ve expanded on that notion to support all people, including men who suffer incontinence, sweating and chafing, providing them with a reusable, sustainable option with our Modibodi Men range.
As you can imagine, this was far from simple not just due to tech and business sectors being notoriously dominated by men, with figures showing that 98% of VC funding goes towards male founded products but also because we were not just selling a new brand of lipstick or gym-wear, we had created a whole new product category based on talking about things that made people and retailers uncomfortable.
As a social advocate for women’s health issues and rights I knew that I needed to persevere because the amalgamation between technology and feminism is a major force of social change and one that can have wide scale impact on our world.
The Sustainability Story
The sustainability agenda has really taken off in the last couple of years, especially in our war against single use plastic. But it occurred to me very early on that we are not doing enough and there are still areas that need urgent review.
Very early on in the development stage of Modibodi I knew that sustainable sanitary products could be a game changer in eliminating single use plastics from circulation and whilst the world and respective governments were focusing on plastic straws, I felt the change needed to come from numerous angles and streams of consumerism.
The proof of concept was starring us right in the face, the average woman uses an average of 11,000 disposable feminine hygiene products in her lifetime and these convenient products come with an inconvenient environmental cost. They take 500 to 800 years to biodegrade, which means the first ever tampon and pad is still in landfill. Even more alarmingly, 8% of all waste that enters water treatment works comes from period waste, including non-flushable items such as pantyliners.
This is why I believe that the revolutionary innovations that are born out of the FemTech sector have capabilities to be one of the key drivers of the sustainability agenda. There is something remarkably special about a group of purpose driven businesses that can connect with consumers through a collective set of values to drive change and be a force for good.
As most purpose driven business leaders will tell you, the fight never stops as the world evolves and continues to change. The sheer growth in the FemTech sector and the capabilities developed to date have changed millions of lives around the globe.
As an industry and a movement, we’ve also managed to play our part in driving the sustainability agenda and I will argue that actually the wide scale change and unity needed to continue making strides in eradicating single use plastic from our circulation will come from within the powerhouse that is FemTech.
The sheer capacity for change can be easily demonstrated if we look at the granular data and its potential for growth. If just 100,000 young girls use Modibodi alone from the start of their menstrual cycle, this would prevent 1.1 billion disposable hygiene products from ending up in landfill or 1.5 million garbage bags of waste. As of May 2020, our global base of 500,000 customers alone have prevented an estimated 2.5 million garbage bags of disposable hygiene waste from ending up in landfill or flushed into the ocean.
With the FemTech industry growing at a racing speed, I have no doubt that we are at the tipping point of pioneering wave of inventions that will take the agenda further and have the capacity and means to lead the movement. It is up to the trade organisations and world leaders to recognise the potential that such businesses and brands carry in order help to facilitate its growth trajectory.
Limitless possibilities: Delivering disruption with IoT
By Nick Earle, CEO of Eseye
In the past decade, digital companies like Amazon and Netflix have used data to reinvent products and services in ways no-one imagined possible. Shopping and films were not new concepts, but these companies and many others built hugely successful businesses by disrupting existing industries through connected, personalised, data-driven services.
We are on the brink of a similarly disruptive revolution, as the Internet of Things (IoT) starts doing the same for ‘physical’ businesses – from tennis rackets to coffee machines and industrial machinery – allowing them to offer connected, data-driven, differentiated experiences. This is sometimes referred to as the ‘next Internet’ and IDC predicts that in total there will be 41.6 billion connected IoT devices or “things” by 2025.
Access to this incredibly detailed data on every aspect of how the physical world works will create endless disruptive innovations – from both new and existing companies. This presents limitless opportunities, but also severe threats to companies that wait too long.
A decade ago, many predicted this revolution, but it has taken longer than expected. Despite pockets of innovation, many have struggled to deliver successful IoT projects. We have yet to see the IoT equivalent of Netflix.
There are some obvious reasons for this. Many companies with a long heritage in the physical world find digitisation hard to navigate. Moving from selling units via a capex model to managing a continuously connected, data-driven relationship via an opex model is a big shift – involving new technologies, business processes, skills and management metrics. Concerns about how to do this can cause management paralysis where the outcome is often ‘do nothing and wait’. Arguably a worse approach than trying and failing.
It’s also a culture issue. We don’t like change, it’s difficult and we only do it when we have to. The problem is that when you are the market leader your existing financial metrics often disguise the change that your competitors are implementing in the market. A large installed base of customers will keep generating revenue for a long time and it’s often hard, if not impossible, to recognise the new disruptive business models that are winning the next generation of customers. But as the old saying goes, you overtake on the corners not the straights, and the COVID-19 pandemic has accelerated many digital initiatives not slowed them down. Your business model is being disrupted whether you can see it or not and it’s almost certainly accelerated during 2020.
Another reason is much more basic. Due to the fragmented nature of the Mobile Network industry, where multiple players compete with each other with their proprietary SIMs, the holy grail of ubiquitous global cellular connectivity for each and every device via a single embedded eSIM has not been possible. The reality is no network SIM, even from the largest Tier 1 operators, can deliver more than 90% global coverage, even with extensive roaming arrangements. You don’t want a connected lawn mower which is invisible in 10% of cases, or a connected health monitoring device that misses 10% of emergencies. And to fill that connectivity gap you don’t want to have to use a different operator’s SIM – that just adds complexity, cost and kills the business case. If this connectivity barrier can be removed, then the savings in manufacturing and supply chain costs that can be delivered from moving to single global product SKUs will more than justify the investment in IoT pilots and new product rollouts. This is the problem that Eseye solves and we are currently doing it for more than 2,000 customers worldwide.
I’ve spoken exclusively to IoT industry leaders from Microsoft Azure, EY, Thales, Relayr, and The Chasm Group, to understand the opportunities that IoT offers for companies to create disruptive products and services, and the lessons they’ve learnt delivering digital transformation and disruption through connected devices.
Dr Miroslaw Ryba, Global IoT Leader at EY, explained that: “Disruptive IoT is about taking the sum of thousands of IoT sensors – say in a factory – and combining data to deliver transformational insights. And that the next, exciting phase, will be a new data economy.
“There is [already] an agreement that the user gives up their data in return for a service. Imagine what will happen once that data expands to real-world activities. It will allow the development of whole new classes of products and services aligned to customer needs.”
Tony Shakib, Global IoT Business Acceleration Leader, at Microsoft Azure believes that we’re at an inflection point where some companies are taking investment in IoT infrastructure seriously, allowing them to capture meaningful data, and integrate it into their workflow management systems. Here they can start delivering, and acting on, real-time insights.
He said: “Gradually we’re crossing from the experimental phase to mass adoption” he explains. “Once we get there, we’ll see real change. Once you start connecting devices and using data intelligently, the amount of innovation you can do becomes exponential.”
When moving from incremental advances to big disruptive IoT-driven transformation, Shakib believes the key is cultural change.
He explained: “Tech is not the bottleneck – devices, security, connectivity, and cloud platforms are all there if you know where to look. The problem is people struggling to understand the art of the possible.”
VP of IoT at Thales, Andreas Haegele, unpacks the points of consideration including, security, connectivity and process when trying to maximise the benefits of IoT.
“Most business models of the past – and many today – are ‘sell and forget’. IoT connects your products, which changes what you offer. It creates an ongoing connection between you and the customer allowing you to deliver ongoing services and collect data which provides valuable insights.
“However, there are other factors to consider, namely around process and security. Eseye, for example, offers out-of-the-box connectivity which you can embed in an IoT device and it just works, there is no need for setting up new networks, security protocols, certification with mobile network operators (MNOs), etc. IoT needs security to be embedded from the start as security is very hard to retrofit. There must be a unique identity for every device so they can be managed during their lifetime. And you need to make sure software updates can only be accepted by trusted sources.
“Also, built-in connectivity is central to IoT. Each device needs to consider the right type for them, but I expect most will use cellular eventually, since it removes many roadblocks to uptake. If devices over-complicated connectivity, that’s a major turn off for customers who expect seamless, convenient experiences.”
While Peter Van der Fluit, Principal at Chasm Group, said: “Any company that currently makes or operates a physical product needs to be thinking about IoT. If you don’t connect your product to create a differentiated offer, someone else will.
“To be successful in embracing IoT, or any disruptive technology, companies should divide their business into four ‘Zones’ – an approach established by Geoffrey Moore in his book Zone to Win. Two of these Zones focus on innovation, and two on the core business. Each needs a different leadership style, culture, financing and governance.”
With so much disruption and change thrust upon companies, business models are inevitably going to evolve. Josef Brunner, CEO at Relayr, explained to me how IoT is disrupting business models, forever.
Josef said: “IoT is creating whole new ways of thinking for those who manufacture products, enabling them to change how they sell in a way that works better for them and their customers. This is often talked about as moving from selling products to selling services. We’d go further and say that at its best, IoT is about selling outcomes. Rather than charging an hourly or monthly subscription, the manufacturer can sell the value that is delivered.”
But there are pitfalls to be avoided when switching to a model that sells outcomes. Josef explains: “The main mistake companies make is to think of IoT as a technology project, looking at what tech is available and working out where to deploy it. Instead, they should start with the business problem.
Start by looking at what assets you have, and how they could be used to deliver a better experience for customers. Put the customer need at the centre of that offer. Then look at how tech can enable it.”
The inventors of the internet could never have predicted Uber and Netflix. Likewise, we can only guess at what IoT entrepreneurs will come up with once they have access to data from trillions of devices capturing rich data on every aspect of our lives and businesses. But it’s likely to be an even bigger wave of innovation than the first version of the internet unleashed. There really are no limits.
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