New Resources for a New Age Brad Blickstein David Cambria
Recent Headlines 1992 • GC Plan Few Hires – But Still Say More Work Coming In-House • How to Control Litigation Costs • Pressure Rising for Early Settlement; Bad Times are Good Times for ADR • Controlling the Cost of Environmental Regulation • Alternative Billing Making a Comeback • Law Departments Look for Improved Management Reporting • High Fees and High Pressure Spawn and Alternative • Foreign Firms Offer Quality Work at Bargain Rates
Law is a complicated thing The number of laws have been growing every year for the past two hundred years. For example: The IRS laws were first codified in 1874 and today has more than 3.4 million words and if printed at 60 lines per page is more than 7500 pages long.
Regulatory Activity and Complexity are Increasing
Breaking the Duopoly • Until recently almost ALL legal work was either done in-house or sent to law firms – we call this the “ Duopoloy ” • This is no longer true • Let’s brainstorm some of the new resources for getting legal work done
Why is this happening?
Law Department Operations Survey The 10 th Annual Law Department Operations Survey from the Blickstein Group provides insight into many critical success factors of effectively managed corporate law departments. www.blicksteingroup.com 7
www.blicksteingroup.com 8
Your Host www.blicksteingroup.com 9
Our law firm rates went up by more than 5% last year 4% 13% www.blicksteingroup.com 10
Our law firms discount their hourly rates 90% 90% www.blicksteingroup.com 11
Our law firms are innovative 9% 31% www.blicksteingroup.com 12
Our law firms do a good job at suggesting AFAs that meet our needs 21% 21% www.blicksteingroup.com 13
“Law firm unwillingness” is the biggest impediment to using AFAs 75% 10% www.blicksteingroup.com 14
Corporate law departments will be the primary driver of change in the legal sector 85% 85% www.blicksteingroup.com 15
How is this happening?
We use data mining and analytics for selection of counsel 25% 25% www.blicksteingroup.com 17
Most law departments will be using artificial intelligence for legal-type work in the next three years 35% 50% www.blicksteingroup.com 18
We use alternative legal service/non-law firm vendors for: Document Review 55% Contract Review 27% Contract Drafting 22% Internal Investigations 14% Compliance 10% Due Diligence 22% 0% 10% 20% 30% 40% 50% 60% www.blicksteingroup.com 19
ADM Case Study
Distill Best Practices into Matter Management Simple Processes Legal Holds Significant Matter Settlement We implement disruptive NDA’s Requests changes within the department, Process manage the disruption and Invention Reserve Setting ensure adoption to department Disclosure 10 q processes and policies. Board Shipping Communication Risk COI Ebilling
Workload Allocation Overview • Survey respondents were asked to estimate the amount of time they spent on various matter types and sub types. • Overlaying the workload data with the Risk/Impact categorization of the matter types by the leadership team, we (1) analyzed alignment (or lack thereof) relative to level / expertise required, and (2) identified opportunities to leverage down work where appropriate. Key Takeaways • Sub-optimal allocation coupled with self-identification of work is leading to misalignment of resources and potential “under delivery” of legal services. • ADM L/C/GR can potentially be more effective and efficient in providing legal services by: - Leveraging more Lower Value / Lower Effort work downward, freeing up the leadership team and senior level resources to spend more time on strategic work. - Streamlining processes, using enabling technology and alternative service providers for certain matter sub types and tasks. Privileged and Confidential – For Discussion 22 Purposes Only
A Framework for Focusing Legal Service Delivery – It’s About Resources, Not Importance The framework below helps the department identify what work to keep in house, outsource to experts, or automate based on the work’s impact on competitive advantage and the level of risk involved. Experiential: Un Unique / Sp Specialty ty: • Specialized work requiring • “Middle 60” work. expertise or experience. • Situation-driven • High risk, significant approach. bottom line impact. • Key focus area for law • Non-recurring or department management. OUTSOURCE MANAGE unpredictable. ( with in-House Support/ INTERNALLY • Requires deep bench Mission Critical (High Risk) Management) strength and horsepower. Risk AUTOMATE OR AUTOMATE OR Non-Mission Critical (Low Risk) OUTSOURCE OUTSOURCE Commodity / Bulk: Experiential: • Repeatable, • “Middle 60” work. commoditized, routine, • Situation-driven CONTEXT (Low Impact and risk is ring-fenced. on Competitive Advantage) Impact CORE (High Impact on Competitive Advantage) approach. • Does not require in- • Objective is to minimize, market location or to the extent possible. specialized knowledge. Privileged and Confidential – For Discussion 23 Purposes Only
Employing the Framework Dedicate in-house legal resources to handling request YES YES Mission Critical? NO Refer client to electronic tools available or to outside resource REQUEST CORE? INTAKE Outsource matter with extensive management from in-house experts YES Mission Critical? NO NO Point client to automated tools or OC with relevant experience
A Framework for Focusing Legal Service Delivery – It’s About Resources, Not Importance The framework below helps the department identify what work to keep in house, outsource to experts, or automate based on the work’s impact on competitive advantage and the level of risk involved. Experiential: Un Unique / Sp Specialty ty: • Specialized work requiring • “Middle 60” work. expertise or experience. • Situation-driven • High risk, significant approach. bottom line impact. • Key focus area for law • Non-recurring or department management. OUTSOURCE MANAGE unpredictable. ( with in-House Support/ INTERNALLY • Requires deep bench Mission Critical (High Risk) Management) strength and horsepower. Risk AUTOMATE OR AUTOMATE OR Non-Mission Critical (Low Risk) OUTSOURCE OUTSOURCE Commodity / Bulk: Experiential: • Repeatable, • “Middle 60” work. commoditized, routine, • Situation-driven CONTEXT (Low Impact and risk is ring-fenced. on Competitive Advantage) Impact CORE (High Impact on Competitive Advantage) approach. • Does not require in- • Objective is to minimize, market location or to the extent possible. specialized knowledge. Privileged and Confidential – For Discussion 25 Purposes Only
Workload Allocation What is ripe for alternative sourcing?
Plot Risk vs. Impact • Asset Purchase • Contract/Trade • Breach of Contract • Corporate Governance • Clients Business/Contracts - Strategic • Corporate Services/Support - Advice Strategic Advice • Commercial • Finance/Treasury • Communication & Training • Government Relations - Legislation • Communications and Public • Health and Safety Relations • Intellectual Property • Compliance Process Implementation • Intellectual Property - Patent • Confidentiality (NDA) Prosecution • Contentious - Strategic Advice and • Internal Department Meetings Counsel • International Trade • Contract Facilitation/Administration
Plot Risk vs. Impact • Invoice Approvals • Professional Services Agreements • IP - Trademarks • Real Estate - Acquisition/Disposition • Licensing • Regulatory - Strategic Advice and Counsel • Lobbying • Special Projects • M&A • Statutory/Regulatory Compliance • Marketing Agreements • Strategy and Leadership • Navigating Matrix Roles • Training and Development • Other Compliance • Transportation • Outside Counsel Management • Vendor Management • Performance and Personnel Management
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