Skip to main content

Solutions

Products

Recommended products

Questions? We are here to help.
Contact us

Purchase

Questions? We are here to help.

Resources

Budgets

Departmental Budgets and Reforecasts | Overview

The Departmental Budgets/Reforecasts module enables companies to more closely project, monitor, and control legal spending. With it, companies can do the following:
  1. Track and report on matter budgets over time.
  2. Create company budgets (hidden from law firms).
  3. Set a single consolidated company budget for a matter with multiple firms.
  4. Quickly create workflows for creating and reforecasting departmental budgets throughout the fiscal year.
  5. Report on spending and budgets compared to historical versions across all matters.

Summary of the Departmental Budgets/Reforecasts Functionality

The departmental budget is the legal department's estimate for spending. The Departmental Budgets/Reforecasts module must be turned on by a Tracker database administrator. After the module is enabled, companies can create departmental budgets that are based on the law firm matter budget, or they can use an internally generated company budget, which is hidden from the law firms.
With Departmental Budgets/Reforecasts enabled, legal departments can carefully monitor spending and run reports comparing current spending with current or historical budgets across all matters.
note
By default, all matters are designated as "on budget." When you initially activate the Departmental Budgets/Reforecasts module, all matters will be designated as "on-budget," meaning that the Departmental Budget/Reforecasts will be activated for that matter, and all spending for the matter will be charged against the departmental budget. If a matter is "on budget," you can still use a law firm matter budget for the matter. You can edit the "on budget" setting per matter on the Matter Options page, or you can change it for all matters using bulk update.

Generating Departmental Budgets

During setup of the Departmental Budgets/Reforecasts module, legal departments specify how departmental budgets will be generated by default, either by using law firm matter budgets or by using company budgets. If a company budget is used, the law firm will not be able to see it, and the company can include figures for things other than the law firm's fees and expenses. Another reason to use a company budget is that if the legal department suspects a law firm budget is too high or too low, it can create a company budget and include more realistic figures without revealing this information to the law firm. For each matter, companies can change how the departmental budget is generated.
note
If departmental budgets are generated from law firm matter budgets, law firm matter budgets will be required for all matters by default. During setup, when you activate Departmental Budgets/Reforecasts, if you select law firm matter budgets as the default method for generating the departmental budget, Tracker will require law firm matter budgets for every matter by default. You can edit this setting per matter on the Matter Options page, or you can use bulk update to edit it for all matters. You can also edit any firm's profile to specify that the firm is never required to provide budgets.
To change how the departmental budget is generated for a particular matter:
  1. Open the matter whose budget option you want to change.
  2. Select the
    Budgets
    tab.
  3. On the toolbar, select
    Budget options
    .
  4. In the
    Departmental Budget/Reforecasts Options
     section, click
    Yes (On-budget)
     next to
    Include matter in the Dept. Budget/Reforecasts?.
  5. Next to
    How are Dept. Budgets/Reforecasts generated
    , select the appropriate option.
  6. On the toolbar, select
    Save & close
    .

Determining When Departmental Budgets and Reforecasts Are Due

During setup of the Departmental Budgets/Reforecasts Module, legal departments specify when departmental budgets will be due. Budget, accrual, and status report due dates are all set and controlled in the Calendar of Events.

Generating Reforecasts

A reforecast is a budget update or "snapshot" of current spending estimates. Reforecasts are available only when the Departmental Budgets/Reforecasts module is enabled. Budget reforecasts are saved in Tracker—creating a snapshot of spending estimates as of the closing date—so they can be compared later against each other or against actual spending. For example, if a company requires periodic reforecasts for its 2019 departmental budget, the company can then compare the reforecasts throughout 2019 and ask law firms or company users to justify the changes.
When setting up Departmental Budgets/Reforecasts, companies can specify one of two requirements for reforecasts. They can require that users either 1) review the current budget but update it only if necessary, or 2) review and actually update each budget for which he or she is responsible. If multiple reforecasts are due throughout the fiscal year, this setting can differ for each one. For example, a company can email budget review requests for June but require that all budgets be updated in December.
To see when reforecasts are due and what action is required (request a review or require updates) consult your company's Calendar of Events.

Reviewing and Approving Departmental Budgets and Reforecasts

During setup of Departmental Budgets/Reforecasts, companies determine which users will be responsible for reviewing, editing, approving, or rejecting law firm matter budgets. If the Departmental Budgets/Reforecasts module is enabled and company budgets are the source, the financial data reviewers are also responsible for entering the company budget. During System Setup, the Tracker Coordinator can choose one of the following options for financial data reviewer:
  • Lead Company Person
  • Lead and #2 Company Person
  • Matter Administrators
  • Matter Editors and higher
When budgets or reforecasts are pending review and approval, the responsible user's Action Items indicates that the user has financial data pending review. Financial data is reviewed from the Budget Review Page. To access it, click the
Budgets & Accruals
 alert from your Action Items. You can also click Financial > Budget Review in the left navigation. Financial data that requires review is displayed.
If you want to approve all financial data, click
Select all on Page
, then click
Approve All
.
note
When you click
Approve All
, all financial data will be approved. Verify that you have reviewed all data requiring approval, including additional law firms' financial data.

Edit Departmental Budgets and Reforecasts

  1. Open the matter whose budget option you want to change.
  2. Select the
    Budget
     tab.
  3. Use the dropdown to select the firm whose budget you want to edit.
  4. On the toolbar, select
    Edit Current Budget
    .
  5. Edit the budget.
  6. On the toolbar, select
    Save & close
    .

Creating Matters for Contingency Budget Amounts

At any given time, some matters will exist that will carry forward into the next fiscal year. On the other hand, there will be an unknown number of litigation and other matters that will spring up at various times during the next fiscal year. When preparing a departmental budget for the next fiscal year, companies should factor in a contingency amount for as-yet unopened matters. As discussed above, budgets can only be entered with respect to an external matter. Consequently, Company System Administrators should create a few (or perhaps many) external matters—with no lead firm assigned—that can be used for entering company budgets for contingencies. For example, a company might create the following external/no-lead-firm matters for these contingencies:
  • Future litigation for 123 Business unit
  • Future transactions for 123 Business unit
  • Future IP/Filings for 123 Business unit d
  • Future litigation for 456 Business unit
  • Future transactions for 456 Business unit
  • Future IP/Filings for 456 Business unit

Entering Historic Departmental Budgets

Some companies want to enter historic departmental budgets to use for reporting purposes. For example, a company might enable Departmental Budgets/Reforecasts in 2013 after having used department budgets for several years. The company can enter historic budgets from 2010, 2011, and 2012 to use for comparison and reporting. For more information, contact your Tracker Client Relationship Manager.

Auto-Generated Departmental Budgets

If the input period lapses and no departmental budget has been entered, Tracker will auto-generate a budget of $0 in order to provide a baseline for future reporting purposes.

This article applies to:

  • PRODUCT: Legal Tracker
  • Subject: Budget
  • Audiences: Company

Related Content