Redefining legal value

Opportunities for legal teams to demonstrate value: Success hinges on financial outcomes

C-suite respondents report that a company’s success is largely driven by profits and revenue — with 72% of respondents citing profits, and 61% revenue. When asked how they plan to increase profits and revenue, 32% list improving operational efficiency as their top strategy, while 19% remain focused on cost reduction — priorities that can be achieved by implementing an advanced spend management solution.

Demand for advanced spend management solutions grows

For most companies with a global presence, legal ops is now a cornerstone function. Legal departments are widely embracing and relying on technology. Additionally, according to the 2026 State of the Corporate Law Department Report, companies see the value of investing in their own legal teams. In fact, 42% plan to increase allocation and spending for in-house legal teams, while 22% plan to cut spending with outside traditional law firms. 

With this investment comes greater expectations and pressure to deliver. Legal department leaders are routinely asking their legal ops teams questions like:

• Are there ways to introduce technology to solve specific problems and get better results in particular ways? 
• How can we reduce or better predict spend, by matter, firm, or type of issue? 
• Is there a better way to report on spend quickly and comprehensively (including ad hoc requests) 
• What about the feasibility of using a company’s own historical data and a comprehensive benchmarking database to answer business questions and find new opportunities?

Legal departments can rise to the challenge and meet growing demands by investing in advanced spend management solutions that not only provide transparency into legal costs, but also valuable insights and proactive solutions. And to deliver better end-to-end visibility, more control over spend, and real-time strategic insights, legal departments need advanced spend management technology that incorporates AI and machine learning.

Common challenges for legal departments

To fully realize and maximize technology’s benefits, legal departments must overcome barriers common in complex legacy approaches. Below are some of these challenges, along with the solutions AI-powered advanced spend management solutions provide.

Lack of transparency. Without the right technology in place, legal departments don’t have a comprehensive view of legal spending. They’re unable to accurately track current spending, predict future spending, or make data-driven decisions, making it difficult to enforce billing guidelines and hold outside law firms accountable for their work. A critical component that’s missing for many legal departments is internal performance benchmarking and external benchmarking for negotiations. Without benchmarking, it’s difficult to prove consistency internally, with others in the industry, and across law firms.

The solution. Advanced spend management solutions can provide deeper insights into legal spending , making it easier to track and manage costs.

Insufficient visibility. Legal matters often involve complex risks. But sometimes the costliest risks aren’t obvious. When the overall risk profile isn’t examined, resources may be allocated in inefficient and ineffective ways. Likewise, predicting the effects of regulatory changes is also challenging, as legal risks can change quickly. Legal ops teams often lack reporting and analytics functions to help make sense of new information and changes in the legal landscape.

The solution. Real-time dashboards and AI-driven insights can help legal teams better understand and manage their work while reporting cleanly to general counsel and C-suite executives.

Unchecked spending. The focus on legal cost control highlights the need to save and optimize in this area. Legal departments need ways to effectively manage rate increases. But traditionally, managing spend involved a lot of tedious and manual work.

The solution. AI can automate invoice reviews — making decisions around legal spend can be more data-driven and focused.

Manual effort and errors. Legal work has traditionally required significant manual effort by legal teams — leading to operational inefficiencies, human errors, and lost revenue. Plus, such problems expose companies to compliance and risk management issues — making it difficult for legal teams to operate with speed, accuracy, and a strategic focus.

The solution. Using technology solutions that incorporate AI and ML, legal departments can largely automate repetitive tasks and reduce the time and errors associated with manual data entry and review.

Key features to look for in an advanced spend management solution

AI-driven advanced spend management tools are rapidly changing how legal teams operate. By empowering teams with more understanding, control, and insight into legal matters and spend, teams are delivering faster and better results. Capabilities that best-in-class advanced spend management solutions provide include:

Advanced process-management capabilities. Spend management tools that have built-in AI and ML capabilities enable streamlining, digitization, and automation. AI helps lawyers automate repetitive tasks, thereby streamlining processes, saving time, and reducing errors. For example, AI can be used to help execute low-liability agreements like nondisclosure agreements (NDAs) while ML can help with legal research, contract review, and document analysis.

AI-powered invoice review. The invoice review process often requires some degree of manual review and is notoriously tedious and time-consuming. Tools that use AI and ML to automate the review process can quickly identify and flag all possible billing anomalies. This feature greatly reduces manual effort and errors, allowing teams to focus on more strategic, high-value work.

Real-time insights and dashboards. Without context, data is just numbers. Advanced spend management tools with AI and ML provide real-time visibility into legal spend and matter management, and display that information in a clear and intuitive way. This ability brings insights to light and provides context. With this clearer picture, leaders are empowered to make data-driven decisions and optimize resource allocation.

The Legal team at Netflix was able to improve their efficiency with a spend management system. “Now we have a single workflow, one process, one route to get timekeeper rates approved and data captured,” said John Elliot, manager of Legal Operations. “With very little impact on people’s day to day lives, we get amazing results!”

PDF-to-LEDES conversion. LEDES-formatted invoices provide a clearer and more accurate view of outside counsel charges. The right tool can automatically convert PDF invoices into the LEDES format. This option improves cost control and spend visibility, making it easier to integrate data into reporting features.

Customizable user experience. To promote widespread adoption, an advanced spend management solution needs to be user-friendly and intuitive. The right tools include views that allow for easier-to-use reporting and incorporate a preview function.

Seamless integration. To streamline processes and improve data quality, it’s important that a tool integrates with other systems, such as matter management. Easy integration provides end-to-end visibility and better control over legal spend.

Legal department use case: Using legal tech for single-plaintiff employment litigation

Applying technology tools to a process that typically takes manual intervention can introduce incredible efficiencies for legal departments. Negotiating alternative fee arrangements for single-plaintiff employment litigation is one example of how a spend management tool can benefit a legal department.

It can take up to three months for a Legal Ops team to review historical spend to make a data-informed decision about the appropriateness of the rate structure. This analysis is particularly crucial with today’s skyrocketing rate increases. It’s a task that becomes unwieldy when a team is managing outside law firms with negotiations required roughly every two years and fees increasing at different rates for each. Doing this work manually can be a full-time workload, taking one legal advisor away from providing better value to the company. A best-in-class advanced spend management solution provides data-based, rapid, and accurate spend forecasting and analysis while eliminating the manual workload.

Benefits and opportunities for legal departments

These tools help legal teams become more effective, cost-efficient, and valuable. With the right solution, legal departments can:

Accurately capture and report critical data. Data about hourly rates, matter resolution, RFPs, AFAs, and other factors is critical to effectively manage legal departments and demonstrate their value to the larger organization. Advanced spend management tools powered by AI and ML enable accurate data capture and reporting. Integration with matter management systems provides additional benefits as the self-service portal automatically creates matters and feeds accurate data into the spend system.

Reduce costs and increase ROI. Using AI, advanced spend management tools provide faster and better forecasting for legal spend and enable informed decision-making — reducing overall costs for legal departments. At the same time, the greater insights these tools provide allow legal teams to be nimbler and more strategic. Corporate legal departments using the advanced spend management solution from Thomson Reuters enjoy an average ROI of 2.5% to 15% annually.

Get more bargaining power. Advanced spend management lets legal departments come to the negotiating table with more bargaining power. A premium system uses AI to quickly provide real, benchmarked data that informs rates and rate increases — replacing the more subjective way that negotiations are often done.

Keep spend aligned with a changing market. The market is constantly changing, and legal spend can be a casualty of these shifts. AI-powered advanced spend management tools can help keep spend aligned with the changing market by providing accurate benchmarking and valuable insights.

Move beyond spend management. Spend management is an essential piece of broader project management and matter optimization. Historical spend data can give insights into the benefits of working with a certain law firm, renegotiating terms, or deciding if aspects of a matter need to be adjusted. When AI and ML are incorporated, the functions of traditional spend management are greatly enhanced — allowing legal departments to more accurately and clearly demonstrate their value.

The Legal department at Columbia Sportswear uses the spend management solution from Thomson Reuters and recognized the impact right away. “It makes you wonder how things were done previous to this,” said Katie Maksym, a patent administrator at Columbia. “I can’t imagine how you evaluated law firms… before you had a tool like this.”

Become a strategic partner. With data-backed, AI-powered insights into legal operations and spend, the legal department is poised to be a strategic ally at the center of organizational discussions. By leveraging data to anticipate future costs and needs, legal professionals can proactively collaborate with the C-suite on cost management. Connecting spend management to other systems in the department makes data even more powerful as it provides a clearer and more complete picture of the department’s impact.

Customer spotlight: Amazon

As Amazon expanded globally, the legal department faced challenges in managing paper bills and tax information from international business units and law firms. The company needed a cloud-based tool to help the Seattle-based legal team centrally manage billing, budgeting, and spend reporting. By implementing a spend management tool, Amazon streamlined its internal processes. This tool automates the routing of internal tax and entry information for each invoice to local business units for review. Amazon now uses this technology to collect invoices, budgets, and unbilled time from 100% of its firms in more than 90 countries.

Get the best-in-class advanced spend management tool

Thomson Reuters offers a comprehensive advanced spend management tool that’s powered by AI and ML — enabling legal departments to make data-driven decisions and provide strategic insights that add real value to the companies they serve.

Proven to reduce annual legal spend by up to 15% the year of implementation, this system is the global industry-leading AI-powered spend and matter management tool for corporate legal departments — providing detailed insights into current expenditures, how to optimize spend strategies, and actionable insights. Thomson Reuters provides law departments with reliable projections and data so they can better manage expenses, including helping determine whether matters should be given to outside counsel or handled in-house. Legal departments can better understand proposed rate increases, make informed decisions based on industry insights, and gain deeper insights into the spend of their departments compared to their peers. Advanced spend management tools help legal departments and legal ops take on a more proactive, advisory role in the organization — moving from a cost center to a source of value, and even profit, for the company.

Implement advanced spend management technology to enhance your legal department, streamline processes, increase efficiency, and uncover powerful insights that provide real value for your organization. Learn more about Legal Tracker AI.