There are many areas of running a legal department that typically fall within the scope of responsibilities of the head of legal department operations, but none impact the legal department’s finances as profoundly as outside counsel and legal vendor management efforts. Initiatives and programs under this umbrella include:
- convergence of firms and vendors (or other preferred counsel or vendor programs),
- development and maintenance of outside counsel and legal vendor guidelines,
- administration of standardized rate request processes, the development and management of matter budgets and other aspects of spend management (including spend data analytics initiatives), resource allocation planning and management,
- development and management of alternative fee arrangements, the development and administration of counsel and vendor performance scorecards, RFP/RFI program management,
- development and management of e-auction processes and similar innovative programs, and other initiatives.
Leading legal departments, often working with corporate finance and procurement, are now focusing on building centralized, comprehensive world-class programs to effectively manage these activities and achieve certain overall goals, such as cost reduction, improved relationships with outside counsel and vendors, increased service quality, and departmental efficiency.
Join Jeff Paquin, President, Institute for Law Department Excellence as he interviews his guests, David Cambria, Director of Global Operations-Law, Compliance and Government Affairs, with Archer Daniels Midland and Aaron Van Nice, Director Legal Operations, with Baxter Healthcare Corporatetion, as they share their decades of experience in building and managing these programs.
April 17, 12:00 pm Central
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The best data analytics can lead to the same organizational culture.
Marlisse Silver Sweeney, Law Technology News
Are the big bucks being shelled out on big data not having the big impact anticipated? Michael Schrage wrote in the Harvard Business Review that the best data analytics lead to the same organizational culture.
Schrage’s research suggests it’s how the companies use their analytics that really matters. The ones that have moderate outcomes are employing big data for decision support, he said, whereas the most successful return on analytics is when “firms use them to effect and support behavior change.” It seems analytics are the most effective when “they’re used to invent and encourage different kinds of conversations and interactions,” he said.
However, this isn’t as easy as it may seem. “People may need to share and collaborate more; functions may need to set up different or complementary business processes; managers and executives may need to make sure existing incentives don’t undermine analytic-enabled opportunities for growth and efficiencies,” suggested Schrage. (read the article)
Ari Kaplan, Reinventing Professional Services
During a recent trip to Seattle, I spoke with Dan Kalish, a partner with HKM Employment Attorneys, which has just launched One Hour Employment Lawyer, a new service that allows prospective clients to book live consultations focused on employment matters for a $299 flat fee.
Debra Cassens Weiss, ABA Journal
Alternative legal fees are often discussed, but less often embraced, especially in litigation matters.
The Washington Post spoke with two lawyers who are putting their beliefs into action.
One is Crowell & Moring partner Kathy Kirmayer, a litigator who charges alternative fees for most of her work. Often Kirmayer will charge a flat fee with a success fee for positive outcomes such as early dismissal of a case.
“What I’m looking to do is provide the lowest cost to the client as possible—asking how few people can do this task?” she told the Washington Post. “How quickly can we get this task done? What’s the lowest cost to the law firm, and what’s a reasonable return on that investment? It’s cost-up pricing rather than basing off an hourly rate.”
Another believer in alternative fees is Steven Greenspan, head of litigation at the legal department of technology and aerospace company United Technologies. About 70 percent of the company’s legal fees, including its litigation fees, are based on alternative billing. For litigation matters, the company’s outside law firms charge for different phases of a case, such as investigation, discovery, trial preparation, trial and appeal.
“We believe the hourly rate is dead, and we shouldn’t engage outside counsel on an hourly rate basis,” Greenspan told the Washington Post. “I almost never get pushback [from law firms] today. Two or three years ago, I got pushback all the time.” (read the post)
Building a world-class legal vendor management program starts with identification and goals
When programs are properly developed, implemented, and administered, a legal department can save millions of dollars that could be reallocated
David Cambria, Aaron Van Nice, InsideCounsel
While there are many areas of a legal department that typically fall within the scope of responsibilities of the head of legal department operations (LDO), almost none impact the legal department’s finances as profoundly as outside counsel spend and legal vendor management. In fact, most law departments spend more than 60 percent of their budgets on outside counsel and legal vendors. Efforts encompassing outside counsel and legal vendor management may involve the identification, selection, utilization, measurement, or some other aspect of a legal department’s law firms and other vendors. Optimizing outside counsel and legal vendor management only results when the general counsel and LDO make productive changes to the internal and external relationships that consist of the right mix of in-house professionals, outside counsel and clients.
Types of outside counsel and legal vendor management initiatives
Developing and implementing creative programs to manage outside counsel and legal vendors is a critical aspect of the job of LDO professionals. Building world-class outside counsel and legal vendor management programs that aligns the work of outside service providers with the objectives of the client should always be a top priority among LDO’s. By focusing on substance rather than form, LDOs can develop and implement outside counsel and legal vendor management initiatives. Ultimately, outside counsel and legal vendors will be able to take on more of a strategic business advisor role, and contribute to goals such as cost savings, improved relationships, increased service quality, reduced risk, efficiency, and better decision making. (read the article)
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Navalent’s Mindy Millward said “context” is often hard for those raised in the legal world to understand
Zach Warren, InsideCounsel
Aspiring to become general counsel? Or maybe you’re just looking to advance one step up the ladder in your legal department? Either way, it’s important to know that the idea of what makes a good in-house legal leader may not be the same as what it was in your parents’ generation, or even the same as just 15 years ago.
Increasingly, high-level in-house counsel are asked to not only be legal leaders, but to be proficient in the business as well. According to some career experts, that means the characteristics that companies are looking for when hiring in-house counsel has changed as well.
Mindy Millward, managing partner and owner of Navalent Consulting, has placed a number of individuals in high-level positions, including general counsel. Navalent recently undertook a two-year longitudinal study and found that 65 percent of newly-appointed executives fail within the first 18 months. In order to combat this high turnover, Navalent suggests that companies focus on four main characteristics that companies look for when hiring these leaders: breadth, choice, context and connections. (read the article)
From the Experts
Ari Kaplan, Corporate Counsel
In an era of consolidation, half of the law departments at large companies concentrate their e-discovery spending with two to four outside providers, while another 39 percent spread their work across more than five. Only 11 percent have a single dedicated provider. Although 58 percent would not comment on the companies with whom they work, 42 percent revealed relationships with certain organizations.
These were some of the results we found in November 2013 when my company, Ari Kaplan Advisors, conducted a flash telephone survey of 26 predominantly administrative professionals (half of whom were either the director of legal operations or the director of electronic discovery) from Fortune or Global 500 companies. These respondents had knowledge of, and responsibility for, their organization’s electronic discovery protocols and litigation practices, and they shared their views on key trends for 2014, including the vendor selection process.
Effectively Navigating the Process
While the selection process for outside providers differs, the respondents revealed consistent patterns. (read the article)