LIBOR Goes Dark in 2021: Are You Prepared?

LIBOR, the London Inter-bank Offered Rate, is estimated to be tied to over $240 trillion dollars of financial arrangements globally – including public and private loans and bonds, credit cards, mortgages, student loans and interest rate derivatives – and will be discontinued by 2021. LIBOR is a reference rate that is calculated daily from voluntary submissions provided by a panel of banks. The panel banks each provide the rate at which they believe they can borrow currency from another bank. When LIBOR is rising, the indication is that banks believe that there is a greater risk of defaulting on loans, thereby necessitating a higher interest rate to offset the potential risk of that default. The rise or fall of LIBOR generally indicates the rise or fall of interest rates.

As a matter of historical interest, LIBOR was first published in 1986, and quickly became the benchmark rate that influences interest payments on a wide range of financial products and contracts. By the end of 2016, contracts based on USD LIBOR totaled nearly $200 trillion in gross national exposure, according to the New York Fed. Last year, Bloomberg reported that LIBOR underpinned $370 trillion in contracts globally.

LIBOR had been under scrutiny for some time, by some accounts as early as 2003, as accusations and later investigations revealed that certain panel banks were dishonest in their submissions to manipulate LIBOR to make profits. The validity of LIBOR was challenged by these scandals and more so, after billions of dollars of fines were levied by regulators against panel banks proven to be involved in LIBOR manipulation. As a result, many panel banks were deterred from further participation with LIBOR and its use as a widely regarded benchmark has fallen out of favor. In 2017, it was announced that LIBOR would not be sustained after 2021. The impact of the LIBOR is widespread, and market participants will be impacted from consumers, businesses, investors, to banks and countless others.

Many adjustable rate financial products are tied to the performance of LIBOR. Now that LIBOR is going away, many questions arise such as what will dictate my interest rate after LIBOR? Does my contract have a fall-back provision? Similarly, businesses big and small will need to identify contracts that are tied to LIBOR and ask themselves similar questions to assess risk and navigate the course of action moving forward.

If your legal department is losing sleep over the sunsetting of LIBOR take heart. Although you may have a large volume of contracts to repaper before this financial industry benchmark becomes obsolete at the end of 2021, you can put systems and partners into place now to minimize the workload and stress on your team.

What can you do to prepare?

  1. Identify. The first step of the process will necessarily include identification of all contracts referencing LIBOR. Considerations during this identification phase include: (1) whether there are any exceptions that need to be addressed to ensure an exhaustive search; (2) whether there is a way to systematically identify those contracts where the LIBOR reference does not require further action, i.e. the maturity date of the contract is prior to 2021; and (3) how you will determine, upon identification of the universe of LIBOR contracts with potential impact, the priority order of contract review by contract type/customer; topping the list should be those contracts that will need additional time for renegotiations and internal systems compliance.
  2. Review and analyze. Once all contracts referencing LIBOR have been identified, those requiring additional action will need to be reviewed and analyzed to assess LIBOR implication, fallback provisions and whether contracts will need to be renegotiated.
  3. Determine next steps based on categorization. Examples:
    • Contract needs no further action; it is not impacted by the LIBOR transition.
    • Contract can be amended by a letter to the customer with updated terms. Customer contact information must be extracted, and a template letter prepared and sent to the customer with updated terms. Internal systems modification must be initiated to ensure systems compliance with updated terms by the date designated in the letter.
    • Contract needs to be renegotiated in accordance with the LIBOR replacement. Customer contact information must be extracted, and a notification letter prepared and sent to advise the customer of the pending renegotiation. Create a playbook for renegotiations and the associated process.

How will you get it all done?

The sheer volume of time and attention this task could require may at first seem overwhelming. Most legal organizations run lean to begin with; adding another project, especially one that will likely require a dedicated project team, is the last thing you need.

Fortunately, an alternative legal service provider (ALSP) can provide you with a team equipped to carry out project management, training, workflow design, labor and delivery of the amended contracts seamlessly so that you don’t have to tie up your own attorneys and paralegals. They can continue working on priority projects, as the ALSP manages your LIBOR-related activities.

Your ALSP partner should provide you with:

  • A dedicated resource team that includes paralegals and seasoned practitioners with a range of skills that enable an end-to-end solution. Team members should be prepared to assist at every stage, from the identification phase through repapering efforts, using your chosen technology.
  • The workflow design, a substantive training protocol/playbook and training modules. Workflow design is critical to ensuring that similar contracts are treated in the same way from a process perspective through a logical, documented, defensible approach. Training ensures that every person working on the project has a roadmap for dealing with various contract provisions and conditions.
  • Project management and quality control. Skillful project management and a rigorous quality assurance process are essential to ensuring accuracy and defensibility of process.
  • Efficient and cost-effective work product delivery. An outstanding ALSP will work to keep your costs down and efficiency high by streamlining processes, leveraging technology and allocating resources to functions accordingly, as a means of cost control.

About Tower Legal Solutions:

Tower Legal Solutions is a WBENC certified women-owned alternative legal services provider that focuses on project staffing, temporary attorney engagements, and managed services. Our specialties include secondments, managed review, contract management and direct hire placement. Our clients can count on transparent and value-added people solutions that solve staffing challenges and optimize efficiency.

3 Reasons RFPs are the Secret Answer to Your Law Department’s AFA Woes

You can have any color you want, as long as it’s black. Ford’s Model T was a classic example of a market-creating blue ocean strategy that allows companies to unlock new demand. For centuries, people were content with horse and buggy until Ford showed people what they were missing.

Currently, some in-house lawyers fear the idea of having the outside counsel engagement process wrapped up into the auspices of their enterprise’s competitive bidding policies. However, they desire all the benefits that competitive bidding provides. Namely, driving for more competitive rates, obtaining cost predictability, and gathering qualitative insights into how the firms plan to strategically approach the engagement. So, why the disconnect?

“I think that it is a good concept and could work well for simple, repeatable cases, but all my cases are really complex commercial litigation matters so I don’t think an RFP really makes sense for me,” If only I had a dollar for each time I heard that excuse….

Today, the role of legal operations has been more frequently tasked with finding opportunities to run RFPs and this task can be challenged by push-back from managing attorneys. While there are many use cases for RFPs that include establishing a panel of firms company-wide or by practice area to properly align the selection of firms with their greatest area of expertise, among other considerations, bidding to select firms for a specific case is less common. There are many common misconceptions amongst managing attorneys about competitive bidding aka RFPs aka Sourcing on a matter-by-matter basis. The most frequently cited misunderstanding is that RFPs and competitive sourcing only work for commoditized work and that the greater the risk or complexity within the case or project, the less workable the case is for an RFP. However, RFPs are a great means for selecting firms in complex litigation matters for 3 key reasons:

1. More Competition and Firms’ Desire to Work Big Cases

The first reason complex litigation matters are ideal candidates for RFPs is that they are big and sexy… No, seriously. The complex nature of the work necessarily means that there is likely to be a greater amount of work involved. With more revenue potential for the firms, there is a greater incentive for firms to provide added discounts in order to earn the selection. Also, firms want the assignment so they can tout high-profile case outcomes to other clients. Therefore, a competitive selection process is more likely to be fruitful in these cases than in simple projects because firms want the business more and are more willing to lower their fees to win the assignment. This can lead to multi-million-dollar savings for the client in a single RFP. Clients completely lose out on these savings by sticking to the status quo – simply selecting their panel firms at preexisting, “discounted” rates.

2. RFPs can account for ambiguity and define price in case of change

Projects don’t have to be simplistic in their scopes of work to be candidates for an RFP. RFPs can be set up in a way where you account for the ambiguity that comes with complex litigation matters. One of the reasons that hourly billing is so pervasive in the legal industry is because of the ever-changing nature of litigation matters, whose timelines are heavily dependent on external variables – such as the whims of the judge. For this reason, the industry has (despite all its proclamations to the contrary) resisted AFAs. It’s just easier to get the firm started and have them bill you at what you’re told is ‘competitive’ hourly rates (but do not really know for sure?). However, the rate is only half the equation. And negotiating an hourly rate can be like squeezing the center of a tube of toothpaste – as the rate decreases, the firm can easily make up the difference on the backend by billing more hours.

Selecting a firm immediately without requiring the firm to submit a fixed fee proposal amongst competing firms causes the client to lose all leverage. Once the firm is engaged and the longer they are engaged, the less leverage the client has to negotiate a lower rate or to implement an AFA later on. That’s because firms know that the learning curve to bring in a new firm would be costly to the client. For this reason, its critical to run an RFP at the start of a new matter or project so that you can obtain a fixed fee proposal that provides price predictability for the duration of the case. In contrast, hourly budgets are horribly inaccurate and provide zero price predictability. With a fixed fee proposal obtained in an RFP, clients can get the total price while defining the types of changes that would trigger a “material deviation” (for example – a 30% increase or decrease in the number of these 5 key activities). After defining these triggers, the parties can also agree on how much it will cost to add additional activities into the scope (i.e. $100,000 for each additional motion to dismiss) and how much the total will be reduced if they are removed from scope. In this way, you can use the RFP process to obtain overall price predictability whilst also ensuring that you have an easy mechanism for making adjustments.

3. RFPs allow clients to set expectations for staffing and strategy upfront

A third reason RFPs are great for selecting firms in complex litigation matters is that they help the client set expectations early on. Expectations can be defined in the RFP in several areas such as a client’s preferred staffing mix, definition of a successful outcome, and preferred vendors and billing guidelines. Further, clients can define the level of seniority that it prefers to handle various tasks (for example – no first- or second-year associates on expert depositions). This allows the firms to provide pricing based on common assumptions so that the client can truly compare apples-to-apples total fee proposals. Also, it ensures that the client has set the right expectations before the work begins, which allows them to avoid time-consuming and difficult conversations that might occur during hourly invoice review.

You can have any AFA you want, as long as it’s competitively bid

Although the terminology, “Request for Proposal,” comes from procurement, where the purchase of commodities used to be the department’s only charter, the process is something that greatly benefits corporate law departments. An RFP doesn’t have to be a 60-page, lengthy exercise that is designed to evaluate whether a company “qualifies.” It can be a short 5-10 question template with pricing obtained at the phase and/or activity level that is sent only to panel law firms that the client has already ‘pre-qualified’. This streamlined process can then be replicated on a matter-by-matter basis such that panel law firms get into a rhythm of bidding for each case and can provide their best price during periods when they have their greatest capacity – creating a win-win scenario for both the firm and the client. By dispelling the misconceptions about the proper use of RFPs, the legal industry can move away from the misery-induced billable hour and towards a fair, transparent selection process. Clients can let the market dictate the true price of the work. This would allow them to spend less time worrying over hourly rate hikes and invoice review while achieving the budget predictability that CFOs have been asking of their GCs for decades.

About PERSUIT

PERSUIT™ is a Software as a Service (“SaaS”) company specializing in legal services sourcing technology. Founded in early 2016 by Jim Delkousis (a former BigLaw partner), PERSUIT was designed to be easy enough for in-house attorneys and law firms to use with little to no training. The tool is self-service enabled and is an out-of-the box, cloud-based software application, providing corporate law department attorneys the ability to launch Requests for Proposals (RFPs), Requests for Information (RFIs), Hourly Rate Information Requests, Panel Counsel Inquiries, and Alternative Fee Arrangements (AFAs). Each request type can be set up to drive price competition amongst participating law firms such that true market price is achieved. PERSUIT is reinventing the way companies engage with outside counsel with a mission to Kill the Bill(able) hour in favor of outcome and value-based fixed and certain pricing models. Have questions? Reach out to David@persuit.com or visit our website at https://persuit.com.

5 Legal Billing Violations Even the Best Teams Struggle to Spot

If your organization is spending seven figures each year with external legal service providers, chances are you sometimes struggle to spot legal billing violations.

This is understandable given the volume of invoices to be reviewed, the density of information on each invoice, and the lack of time in-house teams can devote to the task. But these violations can easily add up to 10% or more of the total invoice amount — even if you’re using a traditional e-billing system or invoice review vendor to manage compliance.

To get a better sense of where your next cost savings opportunity could be hiding, here are five legal billing violations that we frequently see eluding even the most diligent legal departments.

Work in excess of 8 hours per day

The Brightflag team’s all-time favorite legal billing violation is a customer being invoiced for 26 hours of work by a single timekeeper — in a single day. (Must have been a great multi-tasker!) Most organizations now impose a limit of eight to 10 hours of work per day per timekeeper, both to ensure that quality of work remains high and to avoid incentivizing a culture where billable hours are maximized at all costs within their partner firms.

Enforcing this simple guideline can be deceptively complex. Invoice line items may not be presented in chronological order, requiring the reviewer to turn back and forth to count the number of hours per day. There are also likely multiple timekeepers on each invoice. Then, some law firms may insist on submitting narrative descriptions that span multiple days of work.

All these factors contribute to a tendency for reviewers to settle on a number that’s “close enough.” On larger invoices, though, that latitude may translate to thousands of dollars in unnecessary expense.

Modern e-billing systems can now address this issue by automatically comparing each timekeeper’s hours per day to your organization’s agreed limits, identifying violations you can act on. Ideally, these tools enable you to approve the invoice with reductions, or reject the invoice to be corrected, without any human intervention. As a result, you genuinely can maximize legal billing compliance while minimizing administrative work.

Ratio of partner to non-partner time

Corporate legal teams invest considerable time and effort into conducting panel reviews. One common area of focus is agreeing on appropriate hourly rates for each timekeeper. Far less attention, however, is given to the ratio of partner time to non-partner time on any particular matter. So while an organization may have negotiated hourly rates with a particular blended rate in mind, this target can be difficult to match in practice.

As with the previous example, spotting this legal billing violation manually would require a significant amount of data entry (and creative maneuvering) in Microsoft Excel. Many legal teams end up ignoring the problem, as a result, except in extreme circumstances. This is another missed opportunity to better manage costs. But just as important, the lack of visibility into who is doing the work now will make it tougher to make informed resourcing decisions in the future.

Most invoice review systems summarize work performed by timekeeper seniority, with the best tools tracking trends over time and alerting you to invoices on which the ratio of partner time to non-partner time is unreasonable. From there you can start to benchmark law firm performance by blended hourly rate.

Excessive internal communication

It’s understood that law firms need to communicate internally in order to deliver quality results for their clients. At the same time, some law firms seem to be far more efficient in their collaboration than others. For this reason, most organizations cap billable internal communication at 10% of each invoice to incentivize the right behaviors.

But while “internal conference with R.G. and C.T.” is easy enough to spot on an invoice, calculating the percentage of fees that this represents and comparing it to your billing guidelines is cumbersome at best. The problem only compounds when law firms find — shall we say — creative ways to describe internal communication. At this point, even traditional e-billing systems have a hard time keeping up.

A.I.-based approaches are starting to find more success in identifying and correcting this common legal billing violation. Machine learning can identify obvious examples of internal communication (think keyword searches for “internal”) as well as less obvious examples that otherwise would be missed. The result is significant cost savings through stronger enforcement of the intended rule.

Multiple participants in meetings

One benefit of outsourcing matters to law firms is gaining their expertise and experience in a very particular practice area. As a condition of the higher associated hourly rates, clients have a reasonable expectation that the lawyer assigned to the matter will be largely self-sufficient. So their billing guidelines tend to permit only one participant in each meeting or call to bill for his or her time (usually the most junior timekeeper).

In cases where law firms have multiple participants in meetings, the corresponding narrative descriptions rarely follow one another on the invoice. This means that reviewers have to keep track of the descriptions they’ve read, referring back to earlier line items and pages to cross-reference. And if each timekeeper happens to use different wording to describe the same meeting, even a diligent reviewer can miss the duplication.

Once again, A.I.-based invoice review solutions offer new hope. Because machine learning doesn’t depend on matching exact words or phrases, it’s far more likely to correctly identify meetings with multiple participants. These systems can then apply an organization’s guidelines to invoices automatically by, for example, removing fees associated with all but the most junior timekeeper’s line item for the meeting.

Incorrect tax applied

Legal services are subject to taxation in most every business territory. Naturally, organizations will want to pay not too little, as this would be a risk to the business, and not too much, as this would be an unnecessary expense. Most reinforce this desire with billing guidelines that require their law firms to submit invoices with taxes correctly calculated prior to their being paid.

This process is a steep challenge for legal teams operating in multiple jurisdictions. It’s all too easy for a law firm to apply an incorrect tax rate, or for an invoice to be reduced without the tax being recalculated.

These simple errors can introduce significant friction into the relationship between the legal and finance teams. And in this scenario, your software may not come running as readily to your rescue.

Most e-billing implementations are centered in the United States — a country in which legal services aren’t subject to taxation. As a result, many tools on the market still lack basic functionality for managing global tax compliance. Those with a more worldly perspective, on the other hand, are now able to synchronize tax rates with finance systems of record, check legal invoices automatically for compliance with these rules, and return non-compliant invoices for correction.

Short-term advice

Now that you know the ins and outs of each type of violation, here are five actions you can take to stop errors from slipping through your system:

  1. Organize your invoice review workflow so the people most familiar with the work performed are given an opportunity to spot discrepancies. Think beyond seniority level.
  2. Discuss variations in accounts payable practices with your finance team. For example, some regions may require corrected invoices versus short-paying invoices.
  3. Set clear expectations with your law firms regarding billing enforcement and dispute resolution processes. Structure will help sanity prevail.
  4. Use an e-billing system that’s customized to your organization’s own legal billing guidelines — ideally one that goes deeper than basic keyword matching.
  5. Monitor billing behavior by generating regular reports on invoice compliance and discuss the results with your law firms. They may appreciate the data more than you think.

Long-term perspective

Controlling spend is one of the clearest indicators of operational efficiency within corporate legal departments. It’s also a continuous fight that won’t be won with a single tactic. By focusing first on stronger billing compliance, though, you’ll position yourself for faster progress.

Whether spotted violations spare you $100 or $1 million next month, any cost savings are a positive result your colleagues can recognize. At the same time, law firm partners will value the predictability that comes from precise rules and consistent responses.

From GC and CFO to in-house attorneys and outside counsel, you’ll start creating powerful advocates for legal ops innovation.

About Brightflag
Brightflag’s solution for better billing starts with A.I. trained to interpret the true nature, cost, and value of work described in legal invoice narratives. The results are then automatically compared against your billing guidelines to reveal potential cost saving opportunities. Over time, this creates a collection of data-backed insights you can use to inform everything from pricing negotiations to quality of service evaluations.

Transformation and Change Management: What on Earth is That, Anyway?

If we had a dollar for each time we read or heard the words ‘legal services transformation’ or ‘change management’ recently, the Elevate team would be travelling to the CLOC 2019 Sydney Institute first class all the way!

Today’s legal ecosystem is engaged in breathless pursuit of innovation; captivated by enticing opportunities to transform service delivery by combinations of technologies, novel service models and an array of management methodologies; ranging from Lean, to Design Thinking and Legal Project Management (to name just a few!). In the in-house environment, Legal Ops is at the epicentre, supporting and enabling legal teams to achieve the optimal blend of value, quality and cost efficiency.

At this year’s CLOC Sydney Institute, we will hear about exciting legal department change journeys and opportunities to deploy new technology and ideas. All change in legal services environments requires significant investment in planning and management. It is no accident that change capability forms part of “Strategic Planning” in the CLOC 12 Core Competencies Model, and that legal departments performing at the “Mature” level plan to manage change.

But what exactly are legal services transformation and change management? In this post, we will demystify these terms and consider the role of Legal Ops in the successful execution of change.

Change Transformation

Simply put, change is discontinuing something old for something new. For legal departments, change impacts important building blocks such as vision or strategy; governance, rules and policy; business processes and technology systems; performance management, org design, people and culture, or a combination of the above. Change involves modification in how legal departments perform their work, the work environment, or how clients consume the output of their efforts. Change initiatives intend to produce benefits in efficiency, effectiveness or quality. Given the proliferation of LegalTech, many change projects are prompted by new technology.

Change falls on a spectrum: on the left, incremental evolution of one (or more) of the legal department building blocks described above. On the right, transformative change involves a fundamental and structural disruption to the status quo. Needless to say, not all change is truly transformative and approaches should be calibrated accordingly.

Digital transformation for legal departments is the technology-enabled realignment of vision, processes, service delivery models and client experiences to achieve digitisation of services and defined business goals. It is occurring in concert with business and societal shifts of the Fourth Industrial Revolution, catalysed by ‘always-on’ connectivity, advanced data analytics and breakthrough developments in AI, triggering revamping of processes, workforce skillsets, technology and data environments, and strategies to respond to the opportunities and challenges of digital commerce.

Regardless of whether change is incremental or transformative, it is always much harder to do than describe. However, all legal departments must hone their change skills to get fit for the future of legal service delivery.

Sometimes… things change and they are never the same again. This looks like one of those times. That’s life! Life moves on. And so should we.– Spencer Johnson, 1990 “Who Moved My Cheese”

Lawyers Hate Change!

Lawyers score highly (certainly higher than the population average) on traits such as scepticism, cynicism, impatience and introversion, and typically score lower on collaboration and trust in others.[1] Some speculate that training in precedent and jurisprudence predisposes lawyers to instinctively prefer what has gone before. Despite this, there is no definitive evidence to show that lawyers dislike change more than anyone else.

Humans are pre-configured to operate subconsciously through powerful, trained patterns resulting from ingrained habits and behaviours, values and belief systems, individual experience, comfort, references and routines. We also place more value in the things we already have or know, and have an innate bias for the status quo. In other words, we incline towards what we know rather than embracing alternatives, even when rationally and logically presented.

Worse still, people typically react to change with counter-productive emotional responses, including shock and denial, frustration and unhappiness. These reactions, if not carefully managed, can provoke complex change resistance behaviours, the most toxic of which are passive subversion of the change project, withdrawal of cooperation or disengagement.

Against that backdrop, it is unsurprising that up to 70% of work-related change projects fail to realise promised outcomes.[2] Invariably, the causes are people factors and resistance to change. The technical aspects of deploying technology or revised business processes are straightforward by comparison with the human wildcard.

Legal departments are organised systems of people, so these forces are multiplied and compounded. Busy legal professionals scarcely have enough time to work in the business, let alone manage change. This is where Legal Ops can provide tremendous value.

The Good News

Legal departments are resourced by intelligent, motivated and analytical professionals who are receptive to change when presented in a structured, digestible way which clearly and consistently articulates why change is needed.There’s more good news. While the legal sector is facing the challenges of disruption later than many of our business and professional colleagues, we can benefit from the research, theory and methodologies long since established in other domains, and employ it to our advantage. Most important is adoption of the discipline of change management.

Change Management and the Role of Legal Ops

The Change Management Body of Knowledge (CMBoK) published by the Change Management Institute defines change management as a structured approach to transitioning individuals, teams and organisations from current state to a desired future state. It offers a management methodology for planning change activity, and a human-centred way of managing people factors, drawing on expertise from diverse fields including organisational psychology, sociology, project management, design theory, process improvement, systems theory and management consulting.

The use of structured change management is vital for successful change for legal departments, which is why change management forms part of the CLOC Core Competency ‘Strategic Planning.’ Legal Ops can deliver tremendous value by ‘owning’ the space, leveraging change management tools, techniques and internal/external professionals, and ensuring suitable planning and delivery governance.

Change Management in Practice

There are multiple competing Change Management theories, from Kotter’s 8 Steps, to Lewin’s Change Model, to McKinsey’s 7-S and ADKAR. Each has relative pros and cons (though this blog is not the place to weigh them). Each is intended to help prepare the organisation and its people for structured, well-planned change, involving well-defined goals, support and consistent communication. Arguably, for legal departments, it is less important which model is preferred than to select just one, and use it effectively. With its multi-disciplinary expertise, understanding of process and technology, and horizontal view of the entire legal department, Legal Ops should provide pivotal support in the design and performance of high-quality change management.

Conclusion

The future of legal service delivery will require legal departments to be more agile in how they adopt new tools, methods, service models and ideas, and this requires significant investment in ‘operationalising’ change processes. Legal Ops professionals are perfectly positioned to play an instrumental role in this space.

In the coming weeks, we will be publishing more tips on executing successful change on our blog. You may visit our booth at the CLOC Sydney Institute 2019 and to speak with Steven Walker, James Odell or Jon Kenton about Elevate’s unique Elevated Transformation approach for successful legal department change.

About Elevate

Elevate is a global law company, providing consulting, technology and services to law departments and law firms. The company’s team of lawyers, engineers, consultants and business experts extend and enable the resources and capabilities of customers worldwide. Elevate is the most-used law company according to the 2017 State of the Industry Survey published by the Corporate Legal Operations Consortium (CLOC) and has been ranked as a top global legal services provider by Chambers & Partners for four years in a row. More at elevateservices.com

[1] Herding Cats: the Lawyer Personality Revealed (2002) Richard, Dr. L available at https://www.lawyerbrain.com/sites/default/files/caliper_herding_cats.pdf and Alvey, J., (2010) More on the Lawyer Personality https://leavinglaw.wordpress.com/2010/12/01/more-on-the-lawyer-personality/

[2] Nohria, M., & Beer,M (2000) https://hbr.org/2000/05/cracking-the-code-of-change

How to Improve Contract Management in the Age of Digital Transformation

In the wake of what’s known as the Fourth Industrial Revolution, many businesses are undergoing a process called Digital Transformation (DX) in order to adopt and adapt to new technologies that are changing the way we live and work. Digital Transformation has evolved into a mega trend, fundamentally changing both how we do things, and customer expectations of how we will interact with them.

As organisations look for a starting point in their transformations, many focus on areas that affect business most. This is where documents come in. Documents are essential to business, with contracts, in particular, governing 60-80 percent of B2B transactions, according to Gartner. When documents and contracts are handled or managed ineffectively, it creates drag as well as unnecessary risks. And while many companies are still using outdated or ineffective processes to manage their contracts, they’re also up against an ever-growing volume of contracts, increasing compliance requirements, and, often, staffing challenges in their legal and contract management teams. As businesses realise Digital Transformation is essential to success, they’re embracing Digital Document Transformation (DDX) as a logical first step in the process.

Even organisations who have implemented a contract management lifecycle (CLM) process are not working as efficiently and accurately as they could. Many are using basic document repositories, that aren’t equipped with the tools or abilities necessary to comply with relevant government, industry, or corporate requirements or compliance. Not only that, but they lack visibility into the contract process, and typically average slow completion cycles. There is no guarantee that the right people are getting the right documents when they need them, or that methods in place to ensure best practices are consistently followed and updated based on real-world experiences and market changes.

A modern CLM solution can set businesses up for success, and help as they embark on their DDX journey. Intelligent contracts will cover the bases from creation to negotiation to signature. Templates can be set up so contracts will always come out professional-looking and compliant with the click of a button. Clause libraries provide peace of mind in that reps are always pulling the most up-to-date, accurate, and compliant clauses. A secure, centralised repository allows for easy searching and the storing and management of unlimited contracts. Finally, an intelligent solution will also provide more robust analytics and visibility, with AI-powered insights and integrations with CRM tools to help organisations work smarter.

Let’s dig a little deeper on a few of the key capabilities of an intelligent CLM solution, starting with lowered risk. Connecting the legal requirements with the needs of the sales team reduces risk by maintaining compliance and increasing visibility across the business. The CLM application will help legal control the terms that can be included in any contract and limit one-off changes. When the sales team is always up-to-speed on the latest terms and staying compliant, they can shorten the time spent in negotiation. Similarly, these functions can also support ongoing needs like addendums, renewals, and terminations.

An ideal modern CLM solution will take contract processes through signature, and beyond. By using a CLM system with a built-in eSignature feature, documents will be automatically routed to the right people to sign when they need to, and as a result, sales cycles can shrink significantly. In addition to eSignature, a CLM tool can provide tracking information, delivering visibility into where all agreements are in the process, who has viewed or is currently viewing a contract, and where any bottlenecks lie. All versions, audit trails, and final agreements will be stored in the system of record, allowing managers to leverage advanced analytics to drill down on issues with past contracts and identify key areas for improvement. Every contract can then be accessed, managed, and tracked throughout the course of their lifecycle (and beyond) from the centralised, secure repository.

To recap, a modern CLM solution should include:

  • Advanced features that group common terms and conditions, leverage pre-approved terms and conditions, and vet new language as you make revisions.
  • The ability to negotiate terms in Microsoft Word while tracking the process in a customer relationship management (CRM) system like Salesforce.
  • Professional final documents that incorporate all relevant logos and branding.
  • eSignature capabilities to ensure every document is signed.
  • A secure, centralised repository to store contracts that have been approved and signed.
  • A CLM application should be able to handle third-party contracts from suppliers or partners.
  • Analytics and charts to deliver insight into the types of language and trends users are encountering in contract creation.
  • An end-to-end solution that will deliver all the CLM features needed to take a deal from creation to negotiation to signature, in a single, integrated tool.

Digital Transformation is impacting almost every business process in almost every organisation. CLM is no exception, and by using an intelligent contracts solution to improve the CLM process, companies can see measurable gains in productivity, shrink sales negotiations and cycle times, and ensure all documents meet government and corporate legal standards and requirements.

About Conga
Conga is the leader in end-to-end Digital Document Transformation. From collaboration and creation, through contract management and negotiation, to agreement and e-signature, the Conga Suite has set the standard for automating business productivity and CRM investment through end-to-end Digital Document Transformation.

The Promise of Robotics in Legal Operations

Robotic automation is exploding. In fact, Gartner predicts that the market size of robotics process automation (RPA) alone is projected to reach $1.3B by the end of 2019. And that’s just a single slice of the larger robotic automation pie. The concept of robotics is no longer limited to assembly lines in manufacturing, it is an overall technological approach that can have game changing impact for all workers in all industries.

However, while there is palpable momentum for robotics, its adoption is still relatively nascent in legal operations, and for good reason. Today, most software robotics technology is focused on recording user actions and building task-based bots that perform repetitive tasks like data entry. While these bots can automate individual tasks, they don’t have significant impact on processes as a whole, which require more advanced logic.

More importantly, the legal profession is an inherently human practice, which relies on the critical, strategic, and empathetic thinking from people. The common negative perception of robots replacing humans, leads to a machine vs. humans line of thinking, which for legal, is inherently impossible.

The future of software robotics

In reality, the future software robot, or bot, is neither “dumb” nor out to replace people. Rather, the next wave of software robotics will be human-centric. Human-centric bots can intelligently augment what people do by offloading routine, mundane, or tedious processes. They will also know how to actually work with people, instead of separate or in-lieu of people. By doing so, bots can help people focus on more meaningful work that bring higher value and fulfillment.

By keeping humans-in-the-loop, these bots can automate and coordinate complete processes and that has the potential to bring immense benefit to legal operations.

What are potential areas for robotics to benefit legal operations?

The best way to understand potential areas of benefit for legal ops is to think about two types of processes: intake and coordination.

Intake – Intake processes are ones where the legal team needs to handle high volumes of incoming requests or items. These processes frequently involve receiving, triaging, and routing requests from multiple sources. Examples of intake processes are legal service requests or legal matter intake. Today, legal teams have looked to streamline intake processes by creating form-based automated workflows for certain types of requests, like NDAs, SOWs, or other contracts. However, getting people to learn how to find and use new forms typically requires extensive training and change management throughout the organization.

Bots that are human-aware have the potential to streamline intake processes by plugging in to the existing organizational environment and automating tasks or coordinating with people behind the scenes. For example, a legal intake bot could be introduced to monitor various intake sources like emails, forms, systems, and even chat. The bot can then understand the incoming requests and automatically triage each request based on defined business rules, automatically responding to routine requests and routing higher risk or more complex requests to the right person on the legal team.

Coordination – Coordination processes are ones that involve managing items through multiple touchpoints with people or systems. These processes frequently involve following-up and maintaining statuses of items to ensure nothing falls through the cracks. Examples of coordination processes are legal approvals or legal holds. The main challenge with coordination processes is ensuring the proper follow-up with people to get them to take the necessary action, such as an approval or status update, in a timely manner. These follow-up tasks are mostly handled via manual emails or outreach today, which can lead to overhead and lengthy delays.

Human-centric bots have the potential to streamline coordination processes by acting as a “virtual coordinator” who proactively reaches out to people and actively monitors systems to ensure that necessary actions are being taken. An additional benefit of bots is that they have the ability to learn behavior. In cases of people coordination, bots can learn people’s habits such as what time certain individuals have a higher response rate and what platform (i.e. email or chat) people tend to spend more time in. Based on this, bots can then reach out to each individual where they’re most likely to respond, thus reducing delays in processes due to inaction by people.

The unique potential of robotics in legal operations

The fact that human-centric robotic automation software can plug into existing legal processes and technologies behind the scenes while interfacing with systems and people provides unique potential benefits:

  • No change management
    One of the top challenges to legal operations teams is convincing and training your legal team or business customers to adopt new technology or change behavior. Unlike workflow automation solutions that exist today, rather than automating processes by introducing a new “front door” like a digital request form, bots can plug-in directly to existing systems and communication channels to create efficiencies without long and costly change management processes.
  • Start small and iterate
    The additional benefit of not introducing brand new systems or interfaces, which requires learned behavior, is that bots can be introduced incrementally. This way, users can begin to realize benefits in days, not months or years. This also allows legal operations teams to mitigate risk by deploying bots on processes that are low risk and high value and then build on success over time.
  • Reduce barriers to change
    The pace of change for enterprises is faster than ever before, and it will never be slower than it is today. Bots can give legal operations teams the flexibility they need to improve processes regardless of their existing technology environment. This allows legal operations to better respond to shifting business demands and ultimately become better business partners.

The new normal for legal operations

In the future, the new normal for organizations will be a blended workforce where bots are used to augment full time employees who can then maximize their time performing strategic, creative, and human-centric initiatives. Robotic automation can remove the limitations of today’s systems and technology, which require people to perform mundane procedural tasks to satisfy the needs of the business. Additionally, by applying the right kind of robotic automation legal operations teams can have the flexibility to take a people-first approach to process design, which first starts with answering, “What’s the best experience for my people?” and not “What functionality does my system support?” By doing so, legal operations can best accentuate the value their legal team provides to the rest of the business.

About Tonkean
Tonkean is an augmented robotics process automation platform for legal operations to empower their legal teams by automating work and coordinating people. To learn more about Tonkean, please visit www.tonkean.com/usecases/legal.