A new product out today from the legal department management platform LexisNexis CounselLink could change the paradigm for how legal departments pay outside counsel, enabling law firms to receive payments within two days of initial invoice approval, while allowing corporations up to 90 days to more thoroughly review, process and fund the invoices.
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A brand-new product out today from the lawful division monitoring platform LexisNexis CounselLink can transform the paradigm for exactly how lawful divisions pay outdoors advise, making it possible for law firms to get payments within 2 days of initial invoice approval, while enabling corporations as much as 90 days to more thoroughly testimonial, process as well as fund the billings.
CounselLink today is introducing a brand-new variation of CounselLink FastTrack, a solution that expedites settlements to outside guidance while allowing corporations to strengthen their balance sheet by holding funds longer.
The service utilizes an outdoors bank companion, City National Financial institution, that pays law firms’ billings within two days of when they are originally authorized after a first-pass evaluation, while enabling corporations up t0 90 days to money the payment while they evaluate as well as process the billing.
While CounselLink formerly supplied a version of this service on an individual invoice basis, today’s launch permits firms and their firms to set it up for all billings as part of their recurring partnership.
FastTrack is modeled on supply chain financing in other sectors, however is an initial for the legal sector, Dan Ruderman, director, calculated partnerships, at LexisNexis, told me during a briefing last week.
No Charge to Regulation Division
The service sets you back the company nothing. In fact, CounselLink claims it in fact conserves them money by getting rid of vendor invoice queries as well as refocusing accounts payable teams on higher-value tasks. Companies can likewise make interest from maintained funds and make credit histories from CounselLink that can be applied to CounselLink registrations or other solutions.
The law firms that select to enlist in the program pay a tiny service charge, in return for which they can obtain payments within two organization days of invoice approval. This has the potential to boost firms’ cashflow, unlock working capital, and get rid of invoice inquiries, while maintaining the firm’s existing banking connections.
The service fee is computed as a percentage of the billing amount, but it is not a set percent across the board. Instead, the bank will set the charge based on the credit scores worthiness of the firm as well as the length of time it will hold the money. On an invoice of $15,000, the fee would be roughly $450, Ruderman claimed.
Part of that charge goes to the financial institution, part to CounselLink, as well as component back to the company customer in the form of a credit history that can be applied versus CounselLink services.
FastTrack is intended to attend to troubles faced by both business advice and law office, Ruderman claimed. For business counsel, they frequent a capture between intending to put in the time to carefully evaluate invoices while really feeling stress from their interior economic department to maintain capital and also spending on budget.
For outdoors firms, they can see their payments locked up in corporate lawful for months, in some cases developing huge spaces between when the service is made and also when the payment is obtained.
” Currently the legislation department can claim, we understand you wish to get paid swiftly as well as we know that we’re a traffic jam because procedure, so we’re going to set this up as well as if you choose to opt right into it, you can get paid right away,” Ruderman said.
” At the same time, the general advice can rely on the CFO and also claim, I comprehend that the longer we hold on to money, the much less we have to borrow. Therefore, I’ve put all my firms on a fast pay program where we can hang on to our money for a couple of extra months.”
What happens in those instances when the invoice review finds a problem and the law firm has already been paid?
Ruderman claimed the first review will certainly capture numerous concerns, because it consists of both automated testimonial utilizing CounselLink’s policies engine and also an initial testimonial by the customer. However if there is a conflict later regarding the settlement, the company and the firm would certainly work it out either individually or in a subsequent billing.
Fasttrack will certainly be readily available to CounselLink consumers starting May 18. There is no charge to sign up.
Featured picture by Mohamed Hassan from Pixabay.
elLink today is introducing a new version of CounselLink FastTrack, a service that expedites payments to outside counsel while allowing corporations to bolster their balance sheet by holding funds longer.
The service uses an outside bank partner, City National Bank, that pays law firms’ invoices within two days of when they are initially approved after a first-pass review, while allowing corporations up t0 90 days to fund the payment while they review and process the invoice.
While CounselLink previously offered a version of this service on an individual invoice basis, today’s release allows corporations and their firms to set it up for all invoices as part of their ongoing relationship.
FastTrack is modeled on supply chain financing in other industries, but is a first for the legal industry, Dan Ruderman, director, strategic alliances, at LexisNexis, told me during a briefing last week.
No Cost to Law Department
The service costs the corporation nothing. In fact, CounselLink says it actually saves them money by eliminating vendor invoice inquiries and refocusing accounts payable teams on higher-value tasks. Corporations can also earn interest from retained funds and earn credits from CounselLink that can be applied to CounselLink subscriptions or other services.
The law firms that choose to enroll in the program pay a small service fee, in return for which they can receive payments within two business days of invoice approval. This has the potential to improve firms’ cashflow, unlock working capital, and eliminate invoice inquiries, while preserving the firm’s existing banking relationships.
The service fee is calculated as a percentage of the invoice amount, but it is not a set percentage across the board. Rather, the bank will set the fee based on the credit worthiness of the corporation and the length of time it will hold the money. On an invoice of $15,000, the fee would be roughly $450, Ruderman said.
Part of that fee goes to the bank, part to CounselLink, and part back to the corporate customer in the form of a credit that can be applied against CounselLink services.
FastTrack is intended to address problems faced by both corporate counsel and law firms, Ruderman said. For corporate counsel, they are often in a squeeze between wanting to take the time to carefully review invoices while feeling pressure from their internal financial division to keep cash flowing and spending on budget.
For outside firms, they can see their payments locked up in corporate legal for months, sometimes creating large gaps between when the service is rendered and when the payment is received.
“Now the law department can say, we know you want to get paid quickly and we know that we’re a bottleneck in that process, so we’re going to set this up and if you choose to opt into it, you can get paid right away,” Ruderman said.
“At the same time, the general counsel can turn to the CFO and say, I understand that the longer we hold on to cash, the less we have to borrow. To that end, I’ve put all my firms on a fast pay program where we can hold on to our money for a few extra months.”
What happens in those cases when the invoice review finds an issue and the law firm has already been paid?
Ruderman said the initial review will catch many issues, because it includes both automated review using CounselLink’s rules engine and an initial review by the client. But if there is a dispute later about the payment, the company and the firm would work it out either separately or in a subsequent invoice.
Fasttrack will be available to CounselLink customers beginning May 18. There is no cost to enroll.
Featured image by Mohamed Hassan from Pixabay.
