The Poppy ROI Calculator: Our Approach
As an in-house legal professional, you know that effectively managing legal spend is crucial.
The value of a dedicated legal spend management tool is intuitive as you understand the challenges of unclear spending patterns, the frustration of inconsistent billing guideline enforcement, and the missed opportunities to drive better legal and financial outcomes without firm performance insights.
But how do we translate that intuitive knowledge into clear financial concepts that your broader team can understand?
It boils down to control, efficiency, and data-driven insights:
Gaining Control Through Visibility: Simply knowing the total amount spent with each law firm isn't enough for strategic cost management. A sophisticated tool provides granular visibility into spending patterns.
Where is the money really going? Understand costs broken down by specific project or matter, practice area (e.g., litigation vs. M&A), or even individual tasks. This allows you to identify unexpectedly high-cost areas and make informed decisions about resource allocation or alternative approaches.
Stopping Financial Leakage with Automated Enforcement: Your company may have billing guidelines with law firms (defining acceptable charges, required discounts, staffing rules, etc.) or each reviewing attorney might have a personal sense of what is or isn’t reasonable. In either case, manually checking every line item on every invoice against these rules and guidelines is impractical and inconsistent. This leads to financial leakage.
Automated Invoice Review: An AI-powered tool automatically flags violations like incorrect rates, charges for prohibited overhead expenses, duplicate time entries, block billing lacking detail, or work performed by unauthorized staff.
Consistency is Key: Automation ensures rules are applied consistently across all invoices, not just spot-checked ones, capturing savings that would otherwise be missed. This directly prevents paying for non-compliant charges.
Driving Savings Through Data-Driven Insights: Beyond individual invoice checks, analyzing aggregated data uncovers significant savings opportunities.
Negotiating Leverage: Understanding a firm's performance, typical rates for specific tasks, and overall spend volume provides concrete data to negotiate better volume discounts, preferred rates, or move towards Alternative Fee Arrangements (AFAs) like flat fees or capped costs, reducing reliance on the traditional billable hour.
Essentially, a legal spend management tool transforms legal expenses from a partially opaque operational cost into a manageable, analyzable category of corporate spending. While the legal team experiences this as better workflows and less administrative burden, the financial impact comes from plugging leaks, optimizing vendor relationships, and enabling strategic cost control.
Conceptually understanding the benefits of a legal spend tool is important, but translating these benefits into concrete numbers is often necessary to secure budget and broader team buy-in. This is where quantifying the Return on Investment (ROI) becomes essential, and that's why we set out to develop an ROI calculator of our own.
Our Approach
Now, we'll admit, we're often skeptical of ROI calculators. Many feel designed to produce impressive-sounding numbers rather than realistic, actionable insights.
We decided that our approach had to be different, grounded in two core principles:
Transparency:
We show our work. All assumptions and calculations are visible, allowing you to adjust them based on your team's specific situation.
Conservatism:
We deliberately use conservative default assumptions.
Our goal isn't to inflate the numbers, but to provide a realistic estimate you can trust.
How Poppy Legal Drives Measurable Returns
Our ROI calculator focuses on two primary areas where a tool like Poppy Legal delivers quantifiable value:
Reducing Direct Legal Spend: This comes from automatically enforcing billing guidelines, catching errors and potential duplicate charges, and surfacing data-driven opportunities for negotiating discounts or exploring Alternative Fee Arrangements (AFAs). While industry estimates often suggest potential savings of 5-15% or more, our calculator starts with a deliberately conservative default assumption of 2.5% – a figure you can easily adjust. Even modest improvements here can significantly impact the bottom line.
Saving Valuable Team Time: Think about the time spent on manual invoice review, back-and-forth communication with outside counsel regarding billing questions, and potentially manual data entry for spend tracking. Poppy Legal automates much of this. Our calculator helps quantify this efficiency gain based on the number of invoices you process and the estimated cost of your team's time. Again, we use conservative defaults (like assuming only a 40% time saving on review, even though it's often higher) which you can tailor to your reality. We even provide the option to exclude time savings from the ROI calculation entirely if you prefer to focus solely on direct cost reduction.
Calculate Your Potential ROI
We believe that seeing realistic numbers, based on transparent and conservative assumptions, is the most helpful way to understand how Poppy Legal can empower your in-house team.
With those thoughts in mind, we encourage you to use the Poppy Legal ROI Calculator to plug in your own assumptions and get a clearer, data-driven picture of the value Poppy Legal could bring to your team.