More P&C Insurers Turning to Legal E-Billing

Tom Gaillard of Bottomline Technologies discusses how insurers are getting the upper hand in managing their claims litigation outcomes through legal spend management. It’s about more than just controlling costs.

Best’s Review: Can you outline for us Bottomline’s involvement in the insurance industry?

GAILLARD: Our Web-based legal spend management solution, called Legal eXchange, helps insurers manage legal expenses with greater levels of predictability and control. Bottomline is one of the early providers of legal e-billing and our solution has evolved to include the full spectrum of legal spend management capabilities, including e-billing, budgeting, collaborative tools and custom reporting. Today, Legal eXchange is used by many of the nation’s largest property and casualty insurers to manage and measure outside counsel performance for better decision making and case outcomes.

BR: How are today’s insurers handling the challenges of managing their legal spend? Is there still a lot to do?

GAILLARD: We think so, yes. Our estimates indicate that about 80% of the largest insurers are using an electronic invoicing solution. But when you look at small to midsize insurers, that figure drops to 50% or even lower. A tremendous opportunity remains to help these companies improve their approach to legal spend management. The first, and perhaps biggest, area of savings with rules-based electronic invoicing is validating attorney billing rates. That’s an area that many companies focus on to deliver significant ROI. Other areas include invoice compliance with billing guidelines, collaborative case budgeting, and pursuing prompt payment discounts. To put the potential cost savings in perspective, one Legal eXchange user, a large multiline carrier, recently reported that they save six dollars for every dollar spent on legal e-billing.

BR: How do you avoid the perception among outside counsel that legal e-billing is all about costs?

GAILLARD: To our clients, legal e-billing isn’t solely about cost savings; it’s about providing the right level of service to the insurer. Our clients use the data electronically collected from invoices to establish benchmarks and ask important questions, such as: Are outside counsel working in conformance with pre-established guidelines? Are they putting budgets in place beforehand? Are agreed-upon deadlines being met? In other words, they use e-billing data to make strategic decisions about managing their business on a go-forward basis.

To help clients maximize the benefit of Legal eXchange, we’ve placed a great deal of emphasis on hiring professionals who have been in the client’s shoes. For example, we’ve got experienced insurance defense attorneys on our staff who work with customers and their outside counsel. Choosing a vendor is more than a technology decision, and Legal eXchange clients appreciate the level of industry knowledge that we are able to bring to bear. Anyone can build software, but it takes a specialized knowledge of the industry to provide a really valuable business tool. That’s one area where we think that we truly excel.