Financial Services Compensation Scheme
A household name in financial protection, the Financial Services Compensation Scheme was challenged in its forecasting, budgeting and decision-making by uncertainty over legal spend. The finance and legal functions worked together to find the ideal solution: Apperio.
The Financial Services Compensation Scheme is part of the UK’s regulatory framework – and therefore a significant user of legal services. Equally, it is a non-profit which must rigorously account for its spending.
In this instance, the legal team and the Senior Business Partner in Finance decided to implement Apperio when accounting for the FSCS's legal spend on a monthly and yearly basis. They had found disparities between:
- Assigned budgets
- Expectations in the legal team
- Monthly spend recorded in the ledger
- Invoices received
It became clear that these variations were primarily due to the challenge of accounting for Work In Progress, which made month-to-month finances opaque and annual needs (forecasting, budgeting) subject to interpretation.
The Senior Business Partner worked with colleagues in both the finance and legal functions to find a solution for the need for spend visibility. Apperio’s legal spend tracking software became the obvious choice.
In particular, Apperio has proved easy to implement and use across both functions – which is crucial because, in this case, Apperio is being used weekly by both finance and legal professionals to proactively monitor legal spend. It was a priority that Apperio should not disrupt both teams’ existing workflows.
The rich datasets created by Apperio’s analytics are also delivering new use cases. As well as budgeting, the data will be used to support benchmarking (understanding what matters should broadly cost and applying that knowledge to future matters) and to deliver credible business cases to the board, whereby benchmarking improves decision-making where legal costs are an important part of corporate planning.
Apperio has changed the way that the finance and legal teams work together, because both sides now have improved data to support rational and justifiable decision-making. Work in Progress, which accounted for 90% of the disparity, is now fully resolved. The legal team also have a better understanding of Finance’s priorities and processes.
The finance team is now able to forecast legal spend requirements month-to-month, because insight is based on activity in real-time, rather than waiting for invoices to be presented. The finance team can account for unbilled invoices at year-end. And it can set forecasts and raise or lower budgets with confidence based on reliable data. This removes nasty surprises and means budgets can be optimised against real-world needs.
Giving finance professionals confidence in their legal partners
Apperio gives CFOs and other senior finance partners the visibility they need over legal spend. This creates a better partnership with legal teams and unlocks the opportunity for finance professionals to contribute to legal with better forecasting and data-driven process and panel management.