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I L T A W H I T E P A P E R | T E C H S O L U T I O N S 36 is a path from the inability of a firm to effectively make timekeepers aware of the client's OCGs when working on a matter, to non-compliance with the guidelines, to costly invoice write-downs. So much so, that the average realization rates of legal invoices in North America, according to Thomson Reuters 1 , is currently 83%, representing a significant loss in revenue for law firms. Over a whole year, multiplied across every submitted invoice, this has an enormous impact on a firm's bottom line. And don't forget that there's also an additional cost which is the erosion of trust. Firms that consistently fail to submit compliant invoices will start to gain a reputation for being unreliable with their invoicing which, over time, will undermine the client's confidence in the firm. However there's even worse to come. Spend management systems not only validate e-bills for compliance, they also capture a lot of data on legal spend for later analysis. Come panel review time, clients have full visibility of the firms whose invoices have breached their outside counsel guidelines the most. The ultimate sanction they can exact is to deselect the firm from the following year's panel. Consistent failure to comply with OCGs can therefore cost a lot more than just the value of the invoice write-downs. It's clear that it's really important for firms to ensure that OCGs are complied with in the most efficient way possible. Educate your lawyers With the above in mind, what is best practice for law firms to avoid non-compliance, and minimize the cost of compliance? This starts with instituting the right cultures, processes, policies and technologies to ensure three things: Awareness: Timekeepers need to be aware of the outside counsel guidelines for each client Acknowledgement: Timekeepers need to acknowledge these rules and ensure adherence Compliance: There need to be mechanisms in place to capture non-compliance before the invoice stage and, indeed, ensure enforcement before these non-compliant items get sent to the finance team To that end, a firm's first action should be building timekeeper awareness. Many law firms rely on timekeepers making themselves familiar with the rules by simply emailing a link to the client's OCGs in a document management system, or something similar, and hoping that the timekeepers read and remember them. Other law firms go further and use some elements of education to ensure familiarization with their clients' outside counsel guidelines. However, it is not feasible or cost-effective to put lawyers through a comprehensive course on all the individual client OCGs, nor to pull them all into a room every time a client amends their OCGs. The 1 2 3 1. 2020 State of the Legal Market (TR Peer Monitor/ Georgetown Law study) A C C E S S T H E R E P O R T

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