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March 2017
What's Empathy Got To Do With It? Q&A With The Leads of the Design Thinking Workshop at the ACC Legal Operations Conference
Sean Hewens and Rochael Soper Adranly, IDEO

Legal ops pros are tasked with driving change – from new technology and processes to new ways of engaging outside counsel. The capstone session of the upcoming conference is a workshop on Design Thinking from IDEO, which “helps organizations innovate by empowering the people who drive them.” The “design challenge” will focus on influencing in-house counsel: "Empathy: The Secret Weapon for Operational Improvement Inside the Legal Department.” Here are some answers to questions for the session faculty.

For the uninitiated, please tell us what design thinking is and how it's being used in legal.

Design Thinking is a methodology used by IDEO for over thirty years to solve complex problems and find desirable solutions for our clients. IDEO is using this methodology to address some of the most pressing challenges of the legal industry including issues around talent, services delivery, and making legal processes and systems more human-centered for both lawyers and the non-lawyers who interact with them. What is compelling to us about bringing design thinking to the legal industry is that it is a profession filled with super smart individuals who solve problems for a living and yet so many challenges within the legal industry (inefficient services delivery model, low client satisfaction, diversity issues, access to justice issues) persist year after year, decade after decade. And it’s not because the individuals who work within legal are not smart or experts in their field, it’s that it is time to bring new methods of problem-solving to these decades-old challenges that smart minds and expertise have failed to solve.

Core to how IDEO works is using cross-disciplinary teams. For any legal design challenge that we approach, we have a legal designer as part of the core or advisory team. But we also staff the project with team members who do not come from the legal industry - organizational designers, writers, content strategists, design researchers, anthropologists, interaction designers, etc. The ability of these team members to see and approach problems outside of the “expertise” of the legal industry is a key component of IDEO being able to solve complex challenges.

Can you provide some examples from the very beginning levels to more advanced?

At its core, design thinking is about understanding users’ needs, hopes and desires for the future. Each IDEO project begins with a research phase that involves spending time with users in order to understand these needs, hopes and desires. One example from a legal design project we did with the patent group of a large public company involved trying to understand what was keeping its inventors from participating in the company’s patent process and then designing ways to catalyze greater participation. At the outset it could be easy to assume that the way to increase participation was to pay inventors for submitting ideas into the patent process. However, rather than carry these assumptions into a project, we start with a blank slate and talk to a cross section of users within the organization. In this particular project, we found that there were many human reasons why people did not participate in patenting, including not feeling their ideas were good enough, fearing rejection, or believing one had to be a Ph.D. to patent anything. Once we understood what was actually motivating these stakeholders, we could then design effective tools, processes and roles to help the company increase participation. At a more advanced level, design thinking can be used to design not just products or services but the entire organization or complex system within which those products and services exist. One of the reasons IDEO created a legal design and innovation practice was because we saw some projects that we did with a certain part of an organization (say the product team) fail to reach the market because they would get “hung up” in other parts of the organization, often the legal group. We saw one IDEO design solution, which, if implemented would have put the organization well at the lead of its industry, get “hung up” in the organization’s legal group for nearly a decade while the rest of the industry caught on and passed this company. Experiences like these have made us passionate about designing for all parts of the organization, especially the legal teams. This mindset has gained increasing importance as organizations are beginning to understand that innovation and creative competitiveness are key differentiators in the marketplace and to be effective, all parts of the organization, not just one or a couple parts of it, need to be able to work collaboratively and in an innovative manner.

Corporate legal operations professionals often struggle to get the in-house counsel in their departments to go along with the changes they are implementing, even when it’s at the behest of the general counsel. That is the “design challenge” participants will tackle at the workshop. What does empathy have to do with it?

Design thinking begins with empathy, empathy for the users who will be using the product, service, process or system that one is designing. IDEO itself is trust-based and non-rules based culture and we feel these aspects are highly correlated with collaboration and innovative workplace culture. Rather than forcing people to “go along" with changes, we design for all of the stakeholders involved with or touched by the proposed change and build consensus toward the new way of working. If we try to use structure to push an agenda (i.e., try to force a mandate), we find that the culture pushes back as this goes against our natural human collaboration and interconnection instincts. At IDEO we talk about “creating movements, not mandates.” By designing for the needs of the stakeholders (users) of the particular process or tool, their participation is much more likely because when a design meets their needs, they will have little reason to resist using or implementing it. The stakeholders themselves then become the biggest proponents of the change, thus creating the movement of change across the organization.
 

Rochael Soper Adranly is General Counsel + Legal Design Lead of IDEO, the world's leading international design firm. A JD/LLM graduate of Duke Law School in Durham, NorthCarolina, Ms. Soper Adranly has been representing creative and innovative individuals as well as pursuing her own creative projects for close to 20 years. 


Sean Hewens is a Senior Design Lead in IDEO’s Design for Change studio in San Francisco, helping companies and law firms use human-centered design to transform their organizations. 

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Campbell Soup's Reese Arrowsmith Named Chair of ACC Legal Ops
ACC

The Association of Corporate Counsel is excited to announce that Reese Arrowsmith, VP, head of legal operations at Campbell Soup Company, has been named as the inaugural chair of the legal operations membership section of the ACC. 

Reese spoke with Metropolitan Corporate Counsel about his plans for ACC Legal Operations, the accomplishments of the ACC membership section since its launch two years ago, the growth he’s seen in the field of legal operations and where he thinks it’s going next. The MCC interview can be read here

As a first step, Mr. Arrowsmith, along with co-chair Sam Ranganathan, head of legal operations at AbbVie, submitted a strategic annual plan to further expand the section's footprint as a resource for corporate law departments, general counsel, and operations professionals.   

"We are excited to have a new strategic plan in order to take our progress a step further and build our resources. A lot of this will be based on our collaborative approach, as we are asking our interest groups to contribute toolkits, templates and best practices for various work streams," Reese told the MCC about the section's strategy. "People are clamoring to know what their fellow legal operations professionals are doing and what benchmarks tell us, so we will continue to be an information hub."

The plan also includes great collaboration with legal service providers and ensuring the section is able to respond to the needs of those just delving into operations initiatives while also advancing the transformative work of sophisticated operations programs.


Reese J. Arrowsmith, VP, Head of Legal Operations, oversees the daily operations of the Law and Public Affairs department, including budgeting and financial reporting, financial analysis and controls, recruitment and on-boarding of new personnel, IT services, facilities and equipment, and procurement. Reese went to Campbell in April 2016 from Lincoln Financial Group, where he was VP, Head of Operations. He was previously Vice President, at Duff and Phelps in Washington, DC. Check out his presentation on Running Legal Departments Like a Business from the ACC Legal Ops kick-off conference.

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AI for Legal Ops and Corporate Counsel - The First Wave
Jeff Cox, Citigroup

The first wave of legal artificial intelligence (AI) is here; it’s slowly rising through corporate budgetary beachheads, reaching eagerly awaited tide pools to prove critical use cases, and doubling back to build a second wave capable of challenging the dunes of legal departments and transforming the prevailing landscape for legal ops and corporate counsel alike.

For legal ops, the first wave of legal AI holds great promise and opportunity, as it presents unparalleled access to mountains of Big Data, both internal and external, that were previously never scaled nor considered. More than unbridled access to raw data, AI provides legal ops with powerful tools to meaningfully structure data sets better and faster than humanly possible. 

With the never-ending search for “more for less” from corporate legal departments, finding new methods to better leverage Big Data and create value is an essential measure of success. The underlying problem legal ops face has two prongs: (1) the company already has the internal data needed to enhance effectiveness and avoid unnecessary risk, but lacks sufficient tools to pull, correctly classify, and appropriately employ its data, or (2) the company does not have the external data needed to make fully informed decisions, and also lacks the resources to develop and maintain access to this data. Enter AI.

Moving from Risk Management to Risk Avoidance

Compared to the collecting, categorizing, and manipulating power of human beings, trained AI systems can scour millions of documents within minutes, if not seconds, and do so for a fraction of the cost. To illustrate the ability of AI to leverage internal company data hidden from corporate counsel, one need only look at the prominent use case of Intraspexion.

Intraspexion is the “Minority Report” of litigation and, Alice v. CLS Bank notwithstanding, recently received a patent for “Using Classified Text and Deep Learning Algorithms to Identify Risk and Provide Early Warning” (U.S. Patent No. 9,552,548). More condensed, Intraspexion uses Deep Learning, a “sub-sub-subset of AI,” to read through millions of company emails to reveal the handful of high-risk emails in-house counsel should review to help avoid and prepare for potential lawsuits.

One of the more important takeaways Nick Brestoff, the Founder of Intraspexion, provides to in-house teams, is that “corporate attorneys do not need to know how to program a computer to use Deep Learning.” Intraspexion’s algorithms are trained by Brestoff’s team using the text from cases for a particular type of lawsuit, and once the algorithm has been sufficiently trained, it can either be installed locally on a company computer or in the cloud. From there, all that’s needed is for the in-house team to read the high scoring emails and determine whether the results produced false positives or “surfaced a needle in the haystack.” In this sense, Brestoff argues that "AI doesn’t mean Artificial Intelligence; it means Augmented Intelligence,” as Deep Learning algorithms augment corporate counsel, empowering them to make decisions on whether to investigate, and what advice to give.

In looking for an apt analogy to describe how AI solves the first prong of the problem, Brestoff puts it best: “If Big Data is a lake, in-house legal teams are in the boat and can see only the surface. To catch a fish (either an advantage to take or risk to avoid), you need a fishing rod. That’s what Deep Learning is to Big Data.” Rather than waiting for when risk “metastasizes into a lawsuit,” Brestoff aims to provide legal departments with the tools to move from managing risk to avoiding risk.

Reigning in Legal Spend in Litigation

For legal ops leaders of Fortune 500 companies, finding the means to reduce total legal spend for litigation matters is the Holy Grail that AI has the power to uncover. To better comprehend the sea change legal AI is ushering forth, Premonition and UniCourt provide notable use cases for how having access to well-structured external data can solve the second prong of the problem through improving the way outside counsel is selected and litigation is managed.

At its core, “Premonition is an AI system that mines Big Data to find out which attorneys win before which Judges,” asserts Toby Unwin, the Co-Founder and CIO of Premonition. Premonition also claims to have amassed the “largest litigation database in the world,” dwarfing LexisNexis, Westlaw and Bloomberg combined through focusing on lower court and state court opinions, which represent 97 percent of all U.S. litigation. Leveraging this data with machine learning (ML) techniques, Premonition provides powerful judicial analytics, motions analytics, attorney win rate data, case duration statistics, and more to corporate clients.

Imagine a plaintiff’s attorney files a complaint seeking a seven-figure judgment against your company, and, using Premonition’s data, you find out that this attorney has lost nine out of the last ten times, and five of which are in front of the presiding Judge. Moreover, you are able to quickly identify the top 20 attorneys, a couple who are from your panel firms, who have the best track record for this particular case type in front of this particular Judge. Then going a level further, you are also able to uncover which motions were successful for defendants for that case type and that Judge, and discover that defendants have success rates of 80 percent on Summary Judgment motions and 70 percent on Motions to Dismiss.

“Legal departments are viewed as a cost center by the C-Suite,” notes Unwin. “Proving that you actually deliver value for your budget is an important motivator” for legal ops teams to adopt AI, as well as the nagging fear of missing out. Moving from traditionally more reactive positions, Premonition puts legal ops in the driver’s seat to better strategize with litigation departments on who to hire and how to move forward, all the while, reducing the underlying risk and total spend of litigation for the company.

Located at the intersection of AI and intelligent automation, UniCourt is utilizing algorithms and crowdsourced data alongside its automated docket updates and collaboration platform to challenge exorbitant subscription models for enterprise level clients. For legal ops leaders, Josh Blandi, the Co-Founder of UniCourt, understands that, “you can’t value add with analytics if you don’t have the data to produce it properly.” With this in mind, UniCourt’s focus is on “allowing people to work with the data” available in their growing database of over 31 million cases and 12 million documents.

“Political views aside,” notes Blandi, “one of the clients that uses UniCourt is the NRA, and they use it to track all of the Second Amendment litigation.” The NRA used to have two full-time paralegals, who every day would go through Pacer and countless state court websites to track the dockets of hundreds of cases, download any new documents, and then update their website to disseminate the information. Using UniCourt, “they went from having two full-time paralegals to one, who now does more in less than half the time,” and seamlessly shares new documents to Second Amendment litigation attorneys and other interested parties across the U.S.

Corporate counsel can also leverage UniCourt’s sharing options to more efficiently manage litigation. In less than one minute, corporate counsel can: (1) create a folder for outside counsel; (2) pop in cases assigned to that firm; (3) set the folder on auto-update; and (4) invite the firm to join the folder.

“Corporate counsel don’t have to pick up the phone and call to get an update on case status,” says Blandi, they can simply open the firm’s folder or create docket alerts. To save clients additional time and money, UniCourt also integrates with PACER to provide intelligent updates, leading to tremendous costs savings: “With UniCourt, you never have to log in to PACER again,” says Blandi.

From Blandi’s perspective, while AI is used by UniCourt to gather and normalize millions of cases and documents, it’s the use of intelligent automation to save clients time and money that has positioned the company to pick the low hanging fruit already ripe for consumption by legal ops and corporate counsel.

Growing Trends and Key Takeaways

One of the growing trends for legal AI is to improve user experience (UX) in legaltech. UX encapsulates the start to finish experience a user has when interacting with a product, and for legal AI, this means developing a better user interface (UI).

In legal AI, “there is a trend to improve UI to make it less a piece of technology that needs any expert knowledge to use,” claims Richard Tromans, founder of TromansConsulting, who is a consultant advising law firms on the adoption of legal AI technology. Tromans has also interviewed dozens of legal AI companies, providing in-depth reviews of what’s on the market through his website, ArtificialLawyer.com. “Part of the trend,” notes Tromans, “is to make this the kind of technology that simply becomes a part of everyday life for lawyers, which sounds simple, but is in fact very hard to do.”

When asked how legal departments can position themselves to catch the AI wave, Tromans suggests that, “legal departments, as with law firms, should not rush into using AI systems.” First, legal departments need to know what’s on the market, then identify their pain points and problems legal AI can solve, and further, decide whether to manage the technology in-house or have outside counsel take ownership.

For Fernando Garcia, the General Counsel for Nissan Canada, a vital step legal departments must take is to “start building a corporate and department culture that encourages and embraces technological change.” Not being afraid to experiment by testing out new technologies is fundamental for legal departments to move past decaying legacy systems. “There are several levels of AI,” claims Garcia, and “we today can already take advantage of the basic tools such as advanced contract management, legal outcome predictors, etc., but the best is still to come.”

Garcia also finds that there are “many great solutions looking for volunteers for pilot projects,” and that legal departments should take advantage of free trials and demos when available. Beyond free trials and demos, Garcia suggests that legal ops should also participate in legal tech incubators and conferences, such as the ACC Legal Operations Conference, as these events offer “a great opportunity to work alongside and work with the Steve Jobs of tomorrow.”

The black and white TVs of legal AI are here, representing the first wave capable of washing away the fears of technological change and instilling excitement for future growth and progress. While the first wave pushes forward to prove its weight, it is only a matter of time before the color TVs and plasma screens of legal AI appear on the scene to provide the added depth and enhanced resolution needed for legal ops leaders and corporate counsel to re-engineer their respective roles.

 

Jeff Cox is a Citi Legal Network Operations Analyst for Citigroup’s Legal Operations team in Tampa, FL. As the global conflict waiver relationship manager for Citi, he coordinates and reviews findings from information security assessments on outside counsel, and also manages communications for the Citi Legal Network.   Mr. Cox is licensed to practice in Florida, and is excited about all things AI, legaltech, and fintech. Follow on Twitter @JeffCoxEsq.

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Outside Counsel Cost Management: A View Around The Corner
Peter Krakaur, PK Consulting

Courage can’t see around corners but goes around them anyway. Mignon McLaughlin

It is 2017; time to manage outside counsel spend. Again. You are not alone. Historical pricing practices and market dynamics offer opportunities for additional legal service delivery cost reductions. In this corner of legal department operations, outside counsel management offers a relatively easy target to realize savings.

You can, should, and no doubt will focus on continued outside counsel management initiatives. Before proceeding too far, look around the corner and consider who should be doing the work. Are your outside counsel management initiatives designed to address specific, albeit important, cost management targets? Alternatively, are your initiatives integral components of your broader legal service delivery strategy?

Below, I suggest a number of factors that legal departments might consider as they embark on or continue with outside counsel management initiatives. In particular, I focus on various operational issues associated with managing outside counsel in the light of all available legal sourcing options.

Although addressed primarily towards in-house practitioners and operations professionals, the following content is also relevant to law firm professionals. After all, effective law firm-department relationships are partnerships. Ideally, the following suggests opportunities to grow in this regard.

Your Plan

You’ve got to be very careful if you don’t know where you are going, because you might not get there. Yogi Berra

Thankfully, your 2016-authored strategic plan identifies elements of you outside counsel management approach:

  • Update outside billing guidelines and automate their enforcement through an enhanced eBilling platform leveraging advanced analytics, coupled with more consistent internal payment processes.
  • Manage law firm pricing negotiations with RFPs/RFQs, focusing on increased use of value pricing and alternative-based fee arrangements (AFAs).
  • Create, manage and monitor budgets for your matters.
  • Identify, collect, and report on key performance indicators (KPIs) and industry benchmarks in light of current and future trends (and by organizational areas, practices, and geographies).
  • Use data analytics and modeling to extract meaningful and actionable information about outside counsel costs and pricing.
  • Implement systems and processes for evaluating and providing law firm feedback (e.g., QBRs – quarterly business reviews).

Depending on your team, their skills and your culture, legal operations professionals (existing or new roles) may conduct pricing negotiations consistently, objectively and strategically. These professionals will also likely architect a deliberate legal IT strategy to manage this vision.

Your approach may also include two additional elements worth highlighting.

Legal project management

Setting the right price is important, but absent project management you run the risk that you will not meet your budgets and plans. Project management helps you manage scope, quality, time, and cost, ensuring pathways to successful value delivery. Law firms are investing in legal project management. In conjunction with your law firm cost management initiatives, you might collaborate with key law firms to develop and implement thoughtful project management partnerships.

Convergence

You better cut the pizza in four pieces because I’m not hungry enough to eat six. Yogi Berra

How many law firms do you use? Are there any other organizational areas that have direct relationships with law firms that are not part of the legal budget? You might examine the number and percentage of firms accounting for greater than $X (e.g., $100k) of spend. What are the amounts and percentages of invoice adjustments or rejections, and the accuracy of submitted accruals for each law firm? What are their percentages of matters with budgets or that are AFA- or value-based? These and other metrics may suggest that your outside counsel management plan include an intentional reduction in the number of outside counsel used by your organization.

A convergence/preferred provider initiative8 offers at least two benefits. First, the use of many outside firms translates to additional overhead. Someone must track and manage pricing negotiations, e-Billing and other system integrations, procurement and finance vendor approvals, invoice and time entry reviews, accruals, and rate increase and conflict waiver requests. More relationships to manage, more communications, and more distractions for the team.

Second, a convergence initiative offers you an opportunity to partner with select law firms to develop and implement thoughtful pricing structures within and across your practice teams.

Ideally, your outside counsel management initiatives will make you feel less bloated from a cost perspective. Will these initiatives really change your overall legal eating habits? Although you may benefit from different pricing structures, fewer firms, and focused department efficiency, you may not have altered the way you deliver legal services. Efforts to create more focused bites at the pie should not distract you from broader, systemic cost saving opportunities that await around the corner.

Your Portfolio

I never blame myself when I’m not hitting. I just blame the bat and if it keeps up, I change bats. After all, if I know it isn’t my fault that I’m not hitting, how can I get mad at myself? Yogi Berra

When managing financial investments, it is prudent to conduct regular checkups to maintain a current, balanced and diversified portfolio – stocks, bonds, funds, and cash equivalents. In certain respects, the use of outside counsel is an “investment” in one asset type. You’ve chosen the resource. The harder part is remembering how, why and when to use it.

As you conduct your outside counsel checkup, consider if you can secure short- and long-term savings through thoughtfully managed outside counsel costs and a diversified legal service sourcing portfolio. Put another way, if your focus is on outside counsel cost reduction alone, you may be missing broader opportunities. Prioritize long-term cost-effectiveness over straight, short-term cost savings to secure durable value. Start with your in-house team and explore your options to insource, outsource and otherwise value staff

Your Team

You can talk all you want about having a clear purpose and strategy … , but ultimately this means nothing if you are not investing the resources you have in a way that is consistent with your strategy. In the end, a strategy is nothing but good intentions unless it's effectively implemented.  Clayton Christensen

Look for intelligence and judgment and, most critically, a capacity to anticipate, to see around corners. Also look for loyalty, integrity, a high energy drive, a balanced ego and the drive to get things done.  Colin Powell

Your in-house team is your core. It includes a broad talent mix: counsel, paralegals, legal operations,and other legal professionals. You may now or in the near future integrate AI to your legal service delivery model.

In addition to outside counsel, you may diversify your legal staffing portfolio with temporary or contract hires, consultants, and managed/outsourced service and talent providers (LPOs for short). Where and how you invest will be driven by organizational and departmental strategies, adapted to meet episodic and continuous demands for legal service.

As you (re)explore your sourcing portfolio, you might consider the following team management issues:

  • Talent: What is the optimal mix of skills and experience for your team and organization, now and in the future? Your answers may suggest that you train, borrow, buy, or try and buy talent (i.e., insource, outsource, hire contractors and temporary employees, leverage secondees and interns, etc.) Also consider how staffing allocations impact team growth, training and cross-training opportunities.
  • Culture/Diversity: What type of culture are you fostering in your legal team? How will your sourcing decisions impact this? Consider your diversity goals. You can continue to promote diversity by pushing all your providers to expand and create opportunities at all levels.
  • Process: Effective solutions involve an integrated mix of people, process and technology. How will changes to the staffing (people) element change your legal service delivery processes? How should you disaggregate your work and where should it go? What work should be shifted from lawyers to paralegals or other legal professionals? What processes are best outsourced or insourced? Analyze the impacts on your legal project management strategies as you partner internally, and with law firms, LPOs, and your other legal service delivery partners.
  • Collaboration & Engagement: How can you enhance collaboration and engagement within your team and with your organization? How do sourcing decisions impact your ability to learn and adapt to ongoing business needs or your ability to partner with internal clients? How do they impact your ability to measure internal client satisfaction?
  • Knowledge Management: How does the use of law firms, outsourced providers or temporary/contractors impact your KM strategy? How many internal resources will devote time to maintain your KM platform given your sourcing decisions? Can elements can be outsourced?

Your Costs

A nickel ain’t worth a dime anymore.  Yogi Berra

Fully loaded apples

In addition to team management issues suggested above, optimal sourcing decisions are based on cost comparisons. Presumably, you have specific, negotiated rates with law firms, outsourced providers, contractors, and consultants. As you gather comparative internal numbers, remember that there are a costs beyond salary -- benefits and other compensation elements, taxes, rent, perhaps travel or other unique costs relating to your team, geographies, and organizational structures. Consider how you calculate fully loaded costs for your comparisons.

There is no magic percentage to apply as the mix of inputs varies widely by organization, location, and industry. Where possible, you might try to derive a blended hourly rate for counsel and for other legal professionals internally and for each type of other provider that can serve as a basis for apples-to-apples analysis. Even assuming that you derive these data-driven costs, you might include an additional internal cost adjustment.

Productive Time

There are so many things that we wish we had done yesterday, so few that we feel like doing today.  Mignon McLaughlin

How many X (e-mails, invitations, meetings) do you have today, this week? How much time was correctly spent on training, hiring, reviews, and other team management activities? How do these numbers grow when you survey your entire team? As you calculate fully loaded costs, you might also revise your calculation to account for “productive time.”

Consider how in-house teams scrutinize outside counsel bills and individual time entries in particular. This painful process enables legal teams to evaluate productive outside counsel work, and to approve, reduce, or reject certain activities accordingly. Although there are some exceptions, many legal departments do not track their time and have little, direct visibility into the productivity of individual team members. Absent these details, it may be easier to assume 85-90% of your calculated fully loaded cost to develop a comparative “productive” hourly rate for your team. Or not.

Your Data

Data is like garbage. You’d better know what you are going to do with it before you collect it. Unknown author.

Data supports strategic decision making. Your outside counsel management initiatives no doubt include plans to track relevant data (e.g., fee types, rates, budgets, client satisfaction, ratio of inside counsel to outside counsel spend, etc.) In parallel, you may track your internal historical and current operational costs (by matter type, practice, geography and organizational unit). Finally, you may have identified benchmarks and KPIs to measure your success, and to create dashboards to monitor your progress.

Carefully identify the relevant data you capture and the business value you hope to derive from that data. In addition to helping you stay on track, your data that will help your team better understand the cost for each provider and resource, perhaps by phase, task, and matter/project. Under the light of value-based pricing, what should you do about shadow billing? If your team has the luxury of understanding, defining and measuring value, shadow bills offer only additional overhead and may be misleading. Moreover, there are clearly benefits to keeping things simple. That said, for the moment this data may provide the context your team needs to have comfort with
and develop the prices for your work. As your team develops a better pricing expertise and you (re)balance your sourcing portfolio over time, the data may be less relevant.

In-house and law firm project leads do not always understand how to price, scope, or determine the underlying value of a matter/project. Training on these issues is one area in particular where in-house and law firm lawyers have a shared need and interest. Perhaps in-house teams can partner with select outside counsel to provide joint training in this regard? In the meantime, there is no perfect approach regarding the capture and use of shadow billing. Legal teams need to weigh the costs and benefits in light of their data and outside counsel management strategy.

Importantly, time-based billing is still embedded in many e-Billing systems. There is rich data to help with matter value estimation and correlate historical costs with understood results. Even though legal departments and law firms continue to explore beyond hourly billing and appropriately rely on AFA’s and value pricing, hourly rates remain durable and relevant in pricing discussions and analysis. Collectively, this data will help you understand the comparative costs of all providers and formulate your current, optimal legal sourcing strategy.

Your Future

Remember, the future ain't what it used to be. Yogi Berra

Legal service delivery requires agile assessment of staffing and sourcing options. Given the relative inefficiency in the way outside counsel services historically have been priced and managed, these services offer a logical target for in-house teams. As you continue to manage client expectations and your spend, view all corners of your legal department strategy to develop and manage a holistic staffing mix. You will realize savings, lock in long-term efficiencies, and deliver value.

This article originally appeared on LinkedIn in January 2017 and is available here.

 

Peter Krakaur, Principal of PK Consulting, is a senior legal operations executive and lawyer with over fifteenyears of experience creating and executing innovative strategies that drive operational efficiencies in support of the business and practice of law. He has developed and led teams of lawyers and legal professional managing legal projects, pricing and billing, knowledge management, change management, and technology initiatives.

As the former Director of Legal Operations at a Bay Area energy company, Mr. Krakaur was responsible for the development and administration of processes and systems that supported the legal department and its collaboration with all company employees, law firms, and third-party legal providers. As former Chief Knowledge Officer for a global law firm, he directed the strategic direction of global knowledge management initiatives, leading the knowledge management, client risk and acceptance and client collaboration teams. He also designed legal project management initiatives in support of the firm's pricing, matter budgeting and client service strategy


 

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What's Up In ACC Legal Ops
ACC
What’s Up in ACC Legal Ops? Plenty!  
 
Here are a few items that you will want to act upon. 
  • New Model Law Firm Data Security Controls Released – You can include them with your billing guidelines in term sheets with your law firms. An ACC working group developed the model controls and vetted them with a cross-section of law firms. 
  • Register for the 3rd Annual ACC Legal Operations Conference – It’s bigger than ever, with three concurrent sessions to choose among, from “shark tanks” for checking out emerging, AI-driven technologies to a workshop on design thinking. The “design challenge” is how to influence the in-house counsel in your legal department! There are group discounts available, and early bird rates expire April 15.  A few speaking slots are still available – fill out the Faculty Interest Form to throw your hat in the ring. 
  • Participate in the Technology Survey – Share evaluations of the technology in your legal department and join the ACC Legal Operations User Directory to connect with peers to discuss applications you are considering. It takes just five minutes to review each application, and you can complete the survey in more than one sitting.
  • Join a Regional ACC Legal Operations Group near you – In-person roundtables have been held recently in New England, New Jersey, North Carolina and SoCal, and there are more coming up next month in the Mid-Atlantic and Minnesota. Drop a line to ACCLawDepartment@ACC.com to get involved in a Regional Group or in one of the functional Interest Groups.
 

Catherine J. Moynihan is Senior Director of Legal Management Services for the Association of Corporate Counsel (ACC). She directs the ACC Legal Operations Section and the ACC Value Challenge, providing resources, education, networking and advocacy to advance the law department function and the value of legal spending. 

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Highlights from the ACC Legal Ops News & Announcements Page

There is a lot of terrific information floating by in the social media stream - often too much for busy legal ops professionals to consume. The ACC Legal Ops News & Announcements tab tracks the best items to keep you well informed.  

We are adding more hand-picked items all the time - be sure to bookmark or subscribe to www.acc.com/legalops/news.

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Register for the 2017 ACC Legal Ops Conference

The 3rd annual ACC Legal Operations Conference offers its members a unique opportunity to learn about the latest trends and advancements from industry experts, while also networking and collaborating with peers to address shared issues and opportunities. The conference will be held June 4 - 6 in metro Chicago, IL.  Register (here).  View the conference agenda (here). 

Who Should Attend?
Members of ACC Legal Operations – including leaders of corporate legal department operations, outside counsel and/or vendor management, IT, finance, project management, litigation support, as well as those in an enterprise function devoted to supporting the legal department – should attend the conference.

What to Expect? 
Attendees should expect the following:

  • Pre-conference bootcamp opening reception (June 4th)
  • General counsel and design thinking gurus
  • Workshops, instruction and expert-led roundtables
  • Member-only Interest Group meetings
  • Abundance of networking opportunities

What is the Cost?
Early Bird Conference Rate $650 (April 15 Deadline)
Regular Conference Rate $750

Bring a colleague!  Receive a discount of $200 off per person for groups of multiple attendees from the same company – code: LO17GRP.

ACC Legal Operations member faculty receive complimentary registrations. Interested in speaking? Fill out the Faculty Interest Form

For More Information: lawdepartmentops@acc.com.

 

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Not a Member of ACC Legal Ops? Join Now!

Join now to get access to resources, participate in any of the Interest Groups, and use the online Member Forum for ad hoc benchmarking and referrals. The ACC Legal Ops section is active throughout the year, adding resources, conducting benchmarking studies, and providing webinars by legal operations professionals, for legal ops professionals.

For more information, visit www.acc.com/legalops or contact LawDepartmentOps@acc.com.

 

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Contributing Editor:

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Campbell Soup's Reese Arrowsmith Named Chair of ACC Legal Ops
AI for Legal Ops and Corporate Counsel - The First Wave
Outside Counsel Cost Management: A View Around The Corner
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Highlights from the ACC Legal Ops News & Announcements Page
Register for the 2017 ACC Legal Ops Conference
Not a Member of ACC Legal Ops? Join Now!
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