Morrison on Metrics: Reliance on accounts payable for external spend data

While potentially necessary for many small legal departments, there are drawbacks to solely relying upon this data.

A surprising number of law departments rely on tracking their external spend data only through their accounts payable (A/P) department. Mostly, one- and two-lawyer departments indulge in this practice. Some of the departments that do also keep a parallel database, probably in a spreadsheet, but the official record comes from the finance department. A/P law departments, as we might call them in comparison to matter-management system departments, deal with some drawbacks if they choose to provide external spend data for benchmark surveys.

The primary disadvantage of relying on the accounts payable records and the general ledger is that some expenses might have been miscoded to the legal account (or legal spend miscoded to another account). Unless the law department has a way to verify the correctness of the charges to external legal spending, they will remain uncertain about accuracy. For example, a settlement paid by the company might be treated improperly as an external counsel payment.

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Rees Morrison

Rees Morrison, Esq. is the founder of General Counsel Metrics, LLC. Based in Princeton, NJ, Rees has for the past 25 years consulted solely to...

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