InsideCounsel has a nice piece on how law firms are using analytics to cut costs here. Here’s the money quote:
The electronic invoice format leaves mass amounts of data to capture and store. With analysis, this data can provide insights into legal spend management and legal performance management. The resulting information leaves corporate law departments in a better position to evaluate cost and make improved decisions on resource allocation through:
- Cost-effectiveness: Data analysis allows you to create benchmarks from which to negotiate rates with law firms and predict costs for future matters
- Efficiency: Data insights also help identify for which matters to outsource or create alternative fee arrangements
- Engagement: Performance management insights allow an organization to identify the best people or location of a law firm to assign to a matter
There is no doubt that the trend away from the hourly rate will be aided by analysis.