Financial pressures, crystal ball gazing and market uncertainty all play their part in making the job of leading a legal department a huge challenge. In this roundtable, lawyers from FTSE 100 companies debate legal operations efficiencies in the face of the challenge to ‘do more with less’.
At a morning roundtable in London in association with Consilio, The Lawyer gathered important figures from some of the biggest UK companies to assess both the pressures they faced and some key findings in The Lawyer FTSE 100 2017 report.
The event was hosted by The Lawyer editor Catrin Griffiths and Consilio managing directors Drew Macaulay and Robin Snasdell, with 12 in-house lawyers from a range of sectors debating efficiencies and what they could do better as a community. The usual lament of ‘having to do more with less’ was heard, but advice was never far behind.
Assess what your lawyers are doing
“Find creative ways to obtain funding or prove ROI. Relating to contract management, if the sales department is interested, that’s one less problem,” said Snasdell (left). “If you can prove that the technology will enhance the revenue, you don’t even have to do anything; you can ride that wave to justify purchasing the technology.
“Another angle is looking at your internal cost: assessing all the lawyers working on internal contracts and how they’re working on those. How much time would be created if their processes were more efficient?”
Adopt document management technology
Unsurprisingly, contract management and the processing of myriad documents contained in legal departments were high on the agenda too. During Worldpay Group’s recent enormous merger with Ohio-based credit card company Vantiv, Worldpay Inc deputy general counsel Ruwan De Soyza had to process more than one million contracts without contract management automation. Unfortunately, according to De Soyza, the firm might have done this too well.
“We went through the diligence and were able to do it to a public standard without any of the contract management automation simply because we had standard contract deviation,” said De Soyza (left). “The diligence was very straightforward on both sides, US and UK.
“[But] it then becomes more difficult to ask my chief financial officer for this software. They’ll say: ‘Well, you’ve just done it. Why do I need to spend money when you’ve just done a process of that magnitude and didn’t need it in the first place?’”
The leading names in AI (artificial intelligence) contract review technology are often quoted. Kira, Luminance and RAVN have all got people talking, excitedly, about the implications they will have for law. With so much noise and hype, however, it can be difficult to identify what a firm actually needs.
Designate a legal operations chief
“One of the data points from [The Lawyer] FTSE 100 report shows that less than half of the companies have someone who is focused just on legal operations,” said Macaulay (right). “It’s quite hard to drive your car while changing a wheel. You’re supposed to be driving, not leaning out of the window.”
Create or join a peer network
For National Grid group head of legal operational excellence Mo Ajaz, word of mouth and trusted opinion matter more than any sales call.
“It’s all about peer networks,” he said. “First, you’ve got to understand what your need is. Once you know your need, there’s a peer network and simply asking people. They’re both powerful for understanding the real issues with technologies.
“My issues with some technologies are when they start off as an e-billing system, which morphs into a contract management system, which morphs into a mass management system when there’s no real reason for that set-up.”
This is a fundamental problem. Receiving a barrage of sales calls about the latest technology is all very well but, if you have no way to measure objectively how that technology would work in your department, what is the point of it? And who has the time for those conversations when there are so many plates spinning already?
There are risks inherent in Ajaz’s word-of-mouth approach, however. A wrong opinion on a piece of technology could be circulated and fads are common, so it is important to listen to the market.
Indeed, others at the roundtable disagreed with Ajaz on this. RBS head of e-disclosure and technology innovation Anupam Razdan (left) applies rigorous in-house evaluation before committing to any new technology. The team at RBS prefers to carry out its own research to ensure any investment is made only once.
“Once you understand the technological needs of your business, you can go out into the marketplace,” said Razdan. “A peer network is good but you could also argue that it tends to be a bit of an echo chamber. You need to do your own due diligence and roll up your sleeves a bit.”
Razdan has confidence in this opinion but he is in the minority among in-house counsel, figures show.
Call in the tech experts – it’s worth it
The UK is still behind the US in the number of companies that recruit a member of staff with specific responsibility for assessing technology and budgetary concerns. Of the 12 lawyers at the event, only seven said their company employed someone to tackle this issue.
In the FTSE 100 report, 50 per cent of respondents said artificial intelligence and other innovative technologies had been ‘very successful’ in reducing their legal spend. Meanwhile, 64 per cent thought legal service delivery could benefit by adding technology professionals to the team.
Statistically, the roundtable figures were slightly above average, but there is still a long way to go.
Rope your external legal teams in
Another point of debate explored getting the most from one’s firms, particularly on pricing. Whether it was outsourcing, fixed-fee work or panel reductions, everyone seemed to have tried — or at least considered — all conventional means of trimming their budget.
“We’ve been successful in combining our automation with an outsourcing deal; it’s allowed our more experienced lawyers to work on more difficult matters,” said London Stock Exchange (LSE) group general counsel Catherine Johnson (right). “We’ve left the basics to an outsource service. It’s really crude but we still get around a 40 per cent saving.”
LSE is in the process of considering how else to streamline this work. However, for Ajaz and his team at National Grid, it was a case of overhauling the company’s panel arrangement.
“We put in a decision tree to make sure the work got allocated to the right person, and we asked firms to record every decision they took that added value to National Grid’s account,” said Ajaz.
“When something that would have been done in London is now done in the regions, there’s a price difference.”
Ajaz’s method of identifying the best person for the job has benefits, but Aviva Investors general counsel and legal operations director Rachel Wheeler thinks face-to-face interaction provides a more honest relationship.
“You can do everything on a fixed fee now,” she said. “A key focus for all the lawyers in my team is: if they’re putting an instruction out to a law firm, I want them to actually meet. I want them to meet that law firm and that partner, to agree what that fixed fee should be.”
Wheeler’s style of management for her law firms requires authority and illustrates the changing relationship between in-house lawyers and those in private practice. It will surely develop further but, for those in the FTSE 100, this is just another problem to resolve.
The Lawyer FTSE 100 Report
This report, in association with Consilio, is the definitive guide to in-house teams at the FTSE 100 and the law firms that serve them. It details which law firms are working with each of the 100 companies, and on which subjects. It also includes key metrics on in-house teams and best practice case studies. It is a must-read for FTSE 100 in-house teams and any law firm that works, or hopes to work, with this group of companies.
Crafting thoughtful and cost-effective solutions
Consilio was once again delighted to host this intimate roundtable discussion with senior legal counsel from FTSE 100 companies.
Companies present covered a range of verticals from banking and insurance to energy and pharma, and participants included those holding traditional legal department leadership roles such as group general counsel and head of legal but also newer titles such as head of legal operations and group head of legal operational excellence. This variation in attendees’ roles enabled some very interesting conversations as those with more strategic leadership mandates were able to discuss more tactical initiatives with experienced legal operations professionals from similarly sized corporations.
At the beginning of the event, attendees were encouraged to share what they would like to get out of the session and, perhaps unsurprisingly, this tended to align closely with the job function of each guest. Those in general legal leadership positions had reasons including a need to save 5-10 per cent of their total budget and an initiative to restructure their legal department without any allotted capital expenditure budget. Those more focused on legal operations had more tactical reasons for attendance, including a requirement to reduce administrative work undertaken by Legal or implementation of new technologies.
A key point on which all attendees seemed to agree regardless of role or sector was the need to create a close partnership with other parts of the business to facilitate change. For example, one attendee noted that their project to implement a contract management system was made much easier because Finance and Procurement needed data from contracts as well as Legal, and that cultivating strong personal relationships within their business had facilitated that buy-in.
Another common theme was the shift in the type (and location) of lawyers in attendees’ departments, with one citing an increase in dedicated contracting lawyers and another explaining the benefits of their Sri Lanka-based Legal team. The creation of dedicated hubs for corporate ‘back office’ functions is not a new concept, but the forming of legal teams within these centres has certainly lagged behind other business functions such as Finance or IT.
On the technology front, most attendees agreed that the implementation of core legal department technology such as matter management systems, electronic billing or contract management systems was likely to significantly boost efficiency, but that care needed to be taken with the selection and implementation to ensure the full benefits were realised and avoid the creation of expensive white elephant systems.
In summary, the conversation showed a strong desire within corporate legal departments to meet efficiency challenges through the traditional people, process and technology approach to organisational change. As one of the largest legal department management consulting practices in the UK, we look forward to assisting corporate legal departments in crafting thoughtful and cost-effective solutions to the specific challenges they face as well as guiding them towards achieving their longer-term goals.
By Drew Macaulay and Robin Snasdell, both managing directors, Consilio