March 19, 2025

best practices elm legal operations cost savings

One of the biggest challenges for law departments is controlling legal costs, yet most legal tech solutions focus narrowly on invoice review — checking bills against guidelines, adjusting fees, and routing for approval. But if the goal is real cost control, efforts must start long before an invoice arrives. From matter scoping and vendor selection to fee negotiations and engagement terms, much of the cost efficiency law departments seek can be achieved upstream, making invoicing a formality rather than a battle.

Cost control also requires collaboration. While law departments focus on managing spend, vendors seek predictability and stronger client relationships. The future of spend management must serve both — moving beyond isolated invoice review tools to comprehensive spend lifecycle management systems. By taking an end-to-end approach, from matter inception through to final payment, law departments and vendors can drive greater efficiency, predictability, alignment, and data-driven decision-making — creating value on both sides.

First Things First: Laying the Foundation for Cost Control

Cost control starts well before legal work begins. The firms a law department selects, the rates and fee arrangements negotiated, and the outside counsel guidelines (OCGs) put in place all shape the ultimate cost of a matter. Key cost decisions are already made before an invoice is ever reviewed, limiting the impact of any downstream efforts.

Technology plays a crucial role in getting these foundations right. Tools that support panel selection, onboarding, and rate negotiation — while capturing, analysing, and delivering data to inform decisions — enable law departments to manage vendor relationships proactively to ensure the best value for their organisations. This reduces surprises, improves compliance, and minimises invoice disputes later on.

The Spend Lifecycle: A Holistic Approach to Controlling Legal Costs

By the time an invoice hits a law department’s inbox, most of the opportunities to manage costs have already passed. Like building a house, you wouldn’t wait until construction is complete to think about costs — you’d plan every step, from choosing suppliers to negotiating prices, before laying the first brick. Legal work should be no different.

To properly manage spend, law departments need integrated technology tools that support spend lifecycle management — a connected process that starts long before any work begins and continues through to final payment. Without tools that work across each stage, cost control efforts remain fragmented and reactive.

Here’s what that lifecycle looks like in practice — and where the right technology makes a difference:

1. Intake: Setting the Stage for Effective Spend Management

Proper intake is the starting point for managing legal work effectively — yet it’s often overlooked. Capturing all necessary information upfront, including matter details, objectives, complexity, and expected outcomes, ensures that every step that follows — from sourcing and scoping to budgeting and benchmarking — is based on clear, accurate data. Technology-enabled intake systems guide users through structured workflows, helping law departments gather the right information upfront and clearly define the work required.

2. Sourcing: Setting the Right Foundations

Every matter starts with a decision — whether to handle it in-house or outsource. Making that choice requires good data on capacity, vendor performance, complexity, and cost. Traditional RFP processes are often slow and frustrating, but RFP and vendor-sourcing platforms streamline this by enabling structured RFPs and RFIs with clear requirements, while giving firms a simpler way to respond. These tools also capture data on pricing and outcomes, helping law departments make smarter decisions and giving firms insight into what makes a winning proposal — ensuring clear expectations and stronger cost control from the outset.

3. Engagement: Aligning Expectations to Prevent Cost Disputes

Once a vendor is chosen, getting engagement terms right is essential to avoid disputes later. Too often, engagement letters are slow to be put in place and often lack detail on scope and assumptions, leading to misaligned expectations. Technology that spans the spend lifecycle can carry agreed RFP terms into workflows and automate engagement drafting and approvals. By clearly defining scope and fees upfront, both sides avoid scope creep and overspend — making engagement an important step in effective spend management, not just a formality.

4. Legal Project Management: Keeping Work on Track and on Budget

Legal project management (LPM) is essential for keeping matters on track and within budget. Even with clear engagement terms, costs can escalate without real-time visibility into progress, work-in-progress (WIP), and spend. LPM systems give firms the ability to manage tasks, resources, and budgets efficiently, while providing law departments with up-to-date insight into how work is progressing. By enabling regular updates, shared dashboards, and early issue-flagging, LPM technology helps both sides adjust before problems arise — improving forecasting, reducing disputes, and ensuring accountability and value for spend.

5. Matter Management: Moving from Record-Keeping to Collaboration

Matter management should be more than tracking status — it should enable collaboration. Too much time is lost to inefficiencies like having to clarify poorly defined tasks or search for documents. A shared system lets both law departments and law firms access real-time information and manage tasks together, avoiding duplication, delays, and issues. This improves efficiency and alignment, helping both sides manage costs and avoid surprises as the matter progresses.

6. Pre-Bill Review: Shifting Responsibility for Accuracy

Pre-bill review is now a critical part of spend management, shifting responsibility for invoice accuracy to law firms. Firms are expected to ensure their invoices align with agreed terms and guidelines before submission — applying necessary discounts and adjustments. Technology makes this easier by automating reviews, reducing errors, and speeding up billing. For law departments, this shift means fewer disputes and better visibility into value — making billing smoother and reducing friction on both sides.

7. Invoicing: From Cost Control to Confirmation

When spend is well-managed, invoicing should simply confirm what was agreed — not trigger disputes. Clear engagement terms, active WIP management, and pre-bill reviews ensure invoices match expectations, making review quick and straightforward. Automation can flag only exceptions, saving time and enabling faster payment. This benefits law departments and law firms alike — reducing disputes, improving predictability, and making invoicing a seamless part of the process.

At Elevate, we believe spend management isn’t about isolated processes like invoice review — it requires an integrated, end-to-end system that connects intake, sourcing, engagement, project management, matter management, and billing. Only by bringing these pieces together can law departments and vendors manage spend collaboratively, proactively, and effectively. That’s why we built Elevate ELM — to streamline workflows across the full spend lifecycle.

Data and Insights: Unlocking the Real Value of Spend Management 

A full spend lifecycle approach not only improves processes but also creates valuable data that drives better decisions. By capturing data across every stage — from OCG compliance and rates to budgets, vendor performance, and WIP — law departments gain insights that go far beyond basic spend reporting. This consolidated data allows for analysis of spend trends, vendor benchmarking, and accurate forecasting — enabling smarter, more strategically astute decisions. Yet most eBilling tools still focus on simple metrics like quarterly spend, missing the opportunity to answer more complex, forward-looking questions.

To unlock value, law departments need insights like “Are we likely to exceed budget based on similar matters?” or “Is this fee estimate in line with market rates?” — answers that require comprehensive lifecycle data and advanced analytics. AI tools can help with forecasting, scenario modelling, and real-time insights, but without quality data from across the spend lifecycle, AI falls short. Ultimately, connecting and analysing this data enables data-driven decision-making, leading to better cost control, smarter sourcing, and stronger vendor relationships.

If law departments want real, sustainable cost control, it’s time to move beyond invoice review and rethink spend management as an end-to-end process. Managing spend proactively — from sourcing and engagement through to matter delivery and billing — aligns expectations early, reduces disputes, and ensures value. But this shift isn’t just a benefit for law departments. Vendors gain, too — with clearer scopes, faster payments, fewer billing challenges, and stronger client relationships. By adopting a true spend lifecycle approach, both law departments and vendors can work more efficiently, predictably, and collaboratively — turning spend management into a value driver, not a pain point.

Join us at Legalweek to see how our Elevate ELM platform is transforming spend management lifecycles in practice. We’d love to discuss how we can help you streamline and enhance your legal operations.