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Departmental Budgets and Reforecasts | Options and Settings

When you set up departmental budgets, there are a number of options that can be set at different levels. This page helps you decide whether to use law firm matter budgets or company budgets as the source for departmental budgets, and it provides an in-depth explanation of the different configuration options available for departmental budgets.

Choosing between law firm budgets and company budgets

In Tracker, a departmental budget is your legal department’s spending projection. Some legal departments might want to generate their budgets by using the figures provided by their outside firms; other departments may write their own budgets, and still others may use budgets dictated by other departments in the company. To accommodate these differences, Tracker lets you create your departmental budget in one of two ways: 1) you can adopt the law firm matter budget figures, or 2) you can create your own company budget. The company budget can exist concurrently with the law firm matter budget, and they can have different figures. The company budget is always hidden from law firms.
Effect on system-wide budget requirements
When configuring the Departmental Budgets/Reforecasts module, companies choose whether law firm matter budgets or company budgets will be the default source of departmental budgets. If your company has selected law firm matter budgets as the source of the departmental budgets, then by default, law firm matter budgets will be required for all matters. However, a matter creator can change the default setting on a matter-by-matter basis by accessing a matter's matter budget options.
Effect on reforecasts
If the law firm matter budget is the source of the departmental budget, the law firm must enter reforecasts. Similarly, if the company budget is the source of the departmental budget, the company is responsible for entering the reforecast.
When should legal departments use the law firm matter budget as the source for the departmental budget?
If you rely on the figures provided by your law firms in determining your matter budgets, or if company users enter the law firm matter budgets, then it is most effective and efficient to have the law firm matter budgets be the source of your departmental budget. If the law firm matter budget is the source, company users do not need to enter separate budgets. Even if you anticipate changing the law firm matter budgets somewhat after they are submitted, it still might be more efficient to have company users edit the budget rather than submit an independent company budget. For more information, see All Budgets: Creating and Editing .
In the following situations, you might want to select the law firm matter budgets as the source for the departmental budget:
  • Your company believes that the most accurate estimate of spending on a matter is the budget your legal department and the outside firms have agreed upon.
  • You want the law firm to review and update the budget throughout the fiscal year using reforecasts.
  • You are not dealing with a matter group. Departmental budgets for matter groups must use the company budget as the source.
  • You want to use law firm matter budgets but also want a company budget, either to compare the two, or because you want to include additional figures in the company budget. You can require both law firm matter budgets and company budgets for any matter.
When should legal departments use the company budget as the source for the departmental budget?
In the following situations, you might want to select the company budget as the source for the departmental budget:
  • You do not require budgets from law firms.
  • The budget figures provided by the outside law firm are too low or too high and you want to more accurately estimate legal spending.
  • You do not share your company's budget figures with your outside law firms.
  • You want a budget that includes expenses other than the firm’s fees and costs. For example, you might want to include travel costs for a company employee to attend depositions or mediations.
  • You are working with a matter group. You must use a company budget as the source for the departmental budget for a matter group. However, you can still have law firms submit law firm matter budgets for the individual matters within the group.

Overview of Departmental Budgets

When your company enables the Departmental Budgets/Reforecasts module, the default can be set to generate Departmental Budgets and Reforecasts using Law Firm Matter Budgets or by requiring company users to input a Company Budget in each matter. Regardless of the default setting, a Matter Creator can configure an individual Matter's Matter Options so that the Departmental Budgets/Reforecasts for that Matter are generated either by the Law Firm Matter Budget or by a separate Company Budget.
If the Departmental Budget is generated from the Law Firm Matter Budget, then the law firm is responsible for the Reforecast. Similarly, if the Company Budget is the basis for the Departmental Budget, the designated budget reviewers will be responsible for providing the Reforecast budget figures.
Departmental Budgets: Law Firm or Company Budgets
One key aspect of the Departmental Budgets/Reforecasts module is that companies can decide whether to use a Law Firm Matter Budget to generate the Departmental Budget or to create and maintain a separate Company Budget for each matter.
Why Use the Law Firm Matter Budget as Your Departmental Budget?
If you are relying on the figures provided by your outside law firms in determining your Matter budgets, then it is more effective and efficient to have the Law Firm Matter Budgets be the source of your Departmental Budget. Use Law Firm Matter Budgets as the source for Departmental Budgets/Reforecasts if the following are true for your company:
  • Your legal department is looking for ways to save time and reduce internal workloads. If the Law Firm Matter Budgets are the source of the Departmental Budgets, there is no need to have company users separately input Matter budgets into Tracker, resulting in a significant time savings for your legal department.
  • Your company believes the most accurate estimate of spending on a Matter is what your law firm and you have agreed upon.
  • You want the law firm to review and update the budget using Reforecasts at intervals throughout the fiscal year.
  • If and when a separate (and hidden) Company Budget is appropriate, the individual Matter can be set up so that the Departmental Budget source is a Company Budget separately by created by a company user.
Why Use the Company Budget as Your Department Budget?
If you develop your Matter budgets internally or do not require that your outside firms provide budgets, then it is more effective to use Company Budgets to generate the Departmental Budgets/Reforecasts. Use Company Budgets as the source of Departmental Budgets/Reforecasts if the following are true for your company:
  • You only tangentially rely on the budget figures provided by outside law firms.
  • You feel the budget figures provided by outside counsel are too low or too high and you want to more accurately track the estimated legal spending.
  • You do not want to share the company's budget figures with your outside law firms.
  • Matter budgets include fees and costs in addition to those generated by outside legal spending (e.g. travel costs for legal department staff).
  • You use Matter Groups to budget a a higher level than the Matter.

Configuring departmental budgets

There are two levels of setup options for departmental budgets. The first set of options is configured in the Settings on the Budget & Accrual Setup page. Although companies can view the options and make the decisions regarding budget and accrual settings, only a Tracker database administrator can save changes to the Budget & Accrual Setup page. The second set of options is at the matter options level. Users with a role of matter editor and higher can make changes at this level.
Settings options
On the Budget & Accrual Setup page, companies can set the default budget formats for the entire system. Note: Only a Tracker database administrator can save changes to this page.
The following three options are set on a global level in Settings:
How to generate a departmental budget.
This setting requires the company to decide whether company or law firm matter budgets will be the source of departmental budgets by default. This setting can always be changed per matter by editing the matter budget options.
If you choose to use law firm matter budgets, then by default, budgets will be required for every matter. You can change this setting for many matters at once using Bulk Update, or on a matter-by-matter basis by editing an individual matter's budget options.
When there are multiple firms working on a matter, how should company budgets be entered?
Question 4.2 requires the company to decide whether the company should enter one aggregate budget for all firms in a matter or separate budgets for each firm.
For example, assume three firms are working on a matter. If the company opted to enter a consolidated budget, it would enter a single amount for all three firms ($900,000, for example.) But if it opted to enter separate budgets, it would enter three individual budgets—perhaps $300,000 for each firm.
When should reforecasts be generated, and should users be requested or required to update the budget?
Tracker can save reforecasts as frequently as every month or as infrequently as once per year.
There are several steps to deciding the reforecast schedule:
  1. Decide how many reforecasts you want in a year, and in what months.If the company does not want any reforecasts to be saved, you should set a single reforecast to be due in the same month as next year’s budget, and you should select the email bdgt request option. This way, Tracker will still send the reforecast reminder, but it will include that reminder in an email with the annual budget reminder. With these settings, the company can take full advantage of departmental budgets while making the reforecast requirement as unobtrusive as possible.
  2. Keep in mind that the reforecast input window will correspond with the input window for law firm matter budgets, accruals, and status reports. The due date for these items is set and controlled in the Calendar of Events, which can be edited only by a Tracker Coordinator.
  3. For each reforecast throughout the year, decide whether you want to request or require that the user enter a new budget.
    • If you select
      email bdgt
       request, the responsible user will receive an email message requesting that the user review and update budgets if necessary. However, the user will not be required to actually log in to Tracker and edit the budget, and the user will not receive an Action Items alert. If the user makes no budget changes, whatever budget is in place on the reforecast day is the budget that will be saved as that reforecast.
    • If you select
      require update of all bdgts
      , the responsible user will receive an email message requiring the user to log in to Tracker and review and update the budget, and the user will receive an Action Items alert.
Matter budget options
Regardless of the default setting, for each matter, the company system administrator decides whether the matter will be on-budget or off-budget—that is, whether a departmental budget will be generated for the matter. If the matter is off-budget, it can be filtered out of spending reports for departmental budgets, and Tracker will not require or save reforecasts for that matter.
No matter how the default settings have been configured in Settings, for each matter in which departmental budgets are required, matter administrators and higher can decide whether the departmental budget will be generated from the law firm matter budget or a company budget. These options are available on the Matter Options page.
If the matter is on-budget, you must select how the departmental budget is generated. If you want both a law firm matter budget and a company budget for the matter, you can require both.
  1. In the relevant matter, click
    Edit Options
    .
  2. Under Law Firm Matter Budget Options, under
    Are Law Firm Matter Budgets Required
    , select one of the following:
    • Yes - From Lead Firm Only
    • Yes - From all Firms/Vendors (but not if access is billing only).
  3. Under
    Departmental Budget/Reforecast Options
    , next to
    Include matter in the Dept. Budget/Reforecasts
    , select
    Yes (On-budget)
    .
  4. Under
    How are Dept. Budgets/Reforecasts generated
    , select
    Company users will enter separate Co. Dept. Budget
    .

This article applies to:

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

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