While I have been sheltering at home in the Seattle area (where Icertis is based), I’ve had the opportunity to connect virtually with many of our customers as they weather this global crisis. In between virtual contract negotiations, home-schooling small children, or strategizing on which safety gear to wear to the grocery store, Icertis customers have generously shared their time and insights as they process what contracting and business will look like post-COVID-19.

It goes without saying that a “new normal” awaits us as we (slowly and responsibly) emerge from this crisis. But just what that normal looks like will vary person to person, organization to organization. In the commercial space, every company will have to assess what’s changed and what remains foundational to their business as they chart a path to rebounding and thriving in the months and years to come.

Still, generalizations can be made and themes are emerging. Based on my conversations, five distinct imperatives for attorneys and contract managers have surfaced amid the commercial turbulence; the operations professionals supporting these functions should also take notice. I call them the “The 5 ‘Ds’ of Managing Contracts in a Post-COVID World”:

Digitize Contract Processes

The more processes a company had digitized before their entire workforce was forced to shelter in place, the better positioned they were to react to the rapidly changing circumstances. This includes those companies that had digitized their contracts and contract processes. Imagine trying to identify tens of thousands of paper agreements that might be impacted by this pandemic. In this quarantine and work-from-home world, it would be impossible to retrieve those paper contracts that were stored in filing cabinets at physical office locations. Cloud-based contract lifecycle management (CLM) enables a level of business continuity simply not possible with paper-based systems.

As the Global Head of Contract Lifecycle Risk Management at a Fortune 500 company noted to me recently: “Any organization that has gone through this and decides not to digitize is certainly missing a big learning opportunity here.”

Discover Contract Data

Another major learning from COVID-19 is just how fast commercial conditions can change. With the COVID-19 situation evolving by the hour, legal and contract professionals had to quickly and continuously assess how the crisis impacted their company’s supplier, customer, partner and employee relationships—many or all of which are defined by contracts.

Companies that had embraced contract digitization could rapidly surface contract insights (remotely and from their homes) from a centralized pool of data, and were at a distinct advantage in crafting their strategies moving forward. Contract data can tell you with whom you’re doing business and on what terms, as well as where they are located and the commercial value of the contract. Access to contracting data and insights in fluid and uncertain times is truly invaluable when a global crisis hits. For example, one company I spoke with immediately surfaced what its contracts said about delivering services remotely, so they could confidently continue working with clients despite the travel restrictions and shelter-in-place orders.

Deliver on Commitments

Whether in crisis or in steady times, one foundational truth that will remain is the importance of trust and delivering on contractual commitments.

While attention can be diverted during a crisis to a handful of contracts that are disproportionately impacted, legal and contracting teams must be confident that the ongoing business of less-impacted agreements moves forward. Following execution, managing these ongoing obligations can be done manually and docketed in calendars. However, many companies that have embraced CLM have utilized technology to undertake this work. Some companies have optimized their obligations management process by utilizing AI/machine learning models trained on terabytes of contract data that can help discover obligations and their relationships, and manage them to fulfillment, ensuring that transactions off the contracts adhere to these obligations. This is an example of how technology can free up human capital to address those contractual relationships that take priority while contract managers remain confident that other commitments and obligations continue to be delivered.

Defend Against Risk

For our colleagues in the CFO office, the pandemic provided a crash course in enterprise risk management. As the outbreak disrupted markets, CFOs were in the hot seat to create plans that increased revenue, reduced cost, accelerated cash flow and ensured compliance.

The mandate to mitigate risk is reflected in contracts and contracting processes. Getting a vital contract under signature could mean generating the cash flow necessary to maintain operations; ensuring a contract is compliant with local regulations could save a company from crippling fines; preventing maverick contracts most certainly means no contracts go out on outdated templates that don’t reflect new business conditions and terms; visibility into all contracts across the organization means negotiations can be quickly pivoted to head off emerging threats.

That onus will never go away: COVID-19 proved that companies put risk management on the back burner at their own peril, and seamless contract management is a central component to both identifying and mitigating current risks and preventing future risks.

Don’t Delay

The companies in the best position to maintain business continuity when COVID hit were those who had already digitized core processes and developed the habits, skill sets and relationships necessary to get the most out of them. As one customer shared, “The great habits we developed with Icertis pre-COVID are now coming into play, to our benefit.” We don’t know when the next crisis will hit. But we do know that the longer you delay, the less time you’ll have to prepare.

Despite the current challenges posed by this pandemic, there will be a time when legal and contracting teams will return to some semblance of “normal” (and thankfully, educating will be removed from legions of parents-turned-homeschool teachers and back in the hands of educational professionals.) These contracting and legal teams, with the help of their legal department operations partners, will be well served to document the pain points presented in this current crisis and consider the Contracting 5 Ds before the next storm.

While I have been sheltering at home in the Seattle area (where Icertis is based), I’ve had the opportunity to connect virtually with many of our customers as they weather this global crisis. In between virtual contract negotiations, home-schooling small children, or strategizing on which safety gear to wear to the grocery store, Icertis customers have generously shared their time and insights as they process what contracting and business will look like post-COVID-19.

It goes without saying that a “new normal” awaits us as we (slowly and responsibly) emerge from this crisis. But just what that normal looks like will vary person to person, organization to organization. In the commercial space, every company will have to assess what’s changed and what remains foundational to their business as they chart a path to rebounding and thriving in the months and years to come.

Still, generalizations can be made and themes are emerging. Based on my conversations, five distinct imperatives for attorneys and contract managers have surfaced amid the commercial turbulence; the operations professionals supporting these functions should also take notice. I call them the “The 5 ‘Ds’ of Managing Contracts in a Post-COVID World”:

Digitize Contract Processes

The more processes a company had digitized before their entire workforce was forced to shelter in place, the better positioned they were to react to the rapidly changing circumstances. This includes those companies that had digitized their contracts and contract processes. Imagine trying to identify tens of thousands of paper agreements that might be impacted by this pandemic. In this quarantine and work-from-home world, it would be impossible to retrieve those paper contracts that were stored in filing cabinets at physical office locations. Cloud-based contract lifecycle management (CLM) enables a level of business continuity simply not possible with paper-based systems.

As the Global Head of Contract Lifecycle Risk Management at a Fortune 500 company noted to me recently: “Any organization that has gone through this and decides not to digitize is certainly missing a big learning opportunity here.”

Discover Contract Data

Another major learning from COVID-19 is just how fast commercial conditions can change. With the COVID-19 situation evolving by the hour, legal and contract professionals had to quickly and continuously assess how the crisis impacted their company’s supplier, customer, partner and employee relationships—many or all of which are defined by contracts.

Companies that had embraced contract digitization could rapidly surface contract insights (remotely and from their homes) from a centralized pool of data, and were at a distinct advantage in crafting their strategies moving forward. Contract data can tell you with whom you’re doing business and on what terms, as well as where they are located and the commercial value of the contract. Access to contracting data and insights in fluid and uncertain times is truly invaluable when a global crisis hits. For example, one company I spoke with immediately surfaced what its contracts said about delivering services remotely, so they could confidently continue working with clients despite the travel restrictions and shelter-in-place orders.

Deliver on Commitments

Whether in crisis or in steady times, one foundational truth that will remain is the importance of trust and delivering on contractual commitments.

While attention can be diverted during a crisis to a handful of contracts that are disproportionately impacted, legal and contracting teams must be confident that the ongoing business of less-impacted agreements moves forward. Following execution, managing these ongoing obligations can be done manually and docketed in calendars. However, many companies that have embraced CLM have utilized technology to undertake this work. Some companies have optimized their obligations management process by utilizing AI/machine learning models trained on terabytes of contract data that can help discover obligations and their relationships, and manage them to fulfillment, ensuring that transactions off the contracts adhere to these obligations. This is an example of how technology can free up human capital to address those contractual relationships that take priority while contract managers remain confident that other commitments and obligations continue to be delivered.

Defend Against Risk

For our colleagues in the CFO office, the pandemic provided a crash course in enterprise risk management. As the outbreak disrupted markets, CFOs were in the hot seat to create plans that increased revenue, reduced cost, accelerated cash flow and ensured compliance.

The mandate to mitigate risk is reflected in contracts and contracting processes. Getting a vital contract under signature could mean generating the cash flow necessary to maintain operations; ensuring a contract is compliant with local regulations could save a company from crippling fines; preventing maverick contracts most certainly means no contracts go out on outdated templates that don’t reflect new business conditions and terms; visibility into all contracts across the organization means negotiations can be quickly pivoted to head off emerging threats.

That onus will never go away: COVID-19 proved that companies put risk management on the back burner at their own peril, and seamless contract management is a central component to both identifying and mitigating current risks and preventing future risks.

Don’t Delay

The companies in the best position to maintain business continuity when COVID hit were those who had already digitized core processes and developed the habits, skill sets and relationships necessary to get the most out of them. As one customer shared, “The great habits we developed with Icertis pre-COVID are now coming into play, to our benefit.” We don’t know when the next crisis will hit. But we do know that the longer you delay, the less time you’ll have to prepare.

Despite the current challenges posed by this pandemic, there will be a time when legal and contracting teams will return to some semblance of “normal” (and thankfully, educating will be removed from legions of parents-turned-homeschool teachers and back in the hands of educational professionals.) These contracting and legal teams, with the help of their legal department operations partners, will be well served to document the pain points presented in this current crisis and consider the Contracting 5 Ds before the next storm.

When you do an online search for, “what does an in-house legal department look like,” office images show people sitting around a table with laptops, papers, notebooks, pens, etc. None of it looks very technology- or data-driven.

But to anyone who thinks legal departments can’t be data-driven powerhouses, I have one word for you: Moneyball. That’s right, this baseball story is the perfect example of how you can use data-driven decisions—even in the most unconventional places—to drive success.

If you’re a sports fan or like inspiring stories, then you probably already know the story behind Moneyball the book, and later, the movie starring Brad Pitt. Just in case, here’s a quick recap:

When the Oakland A’s General Manager, Billy Beane is challenged with budget constraints, he decides to use deeper, data-driven strategies to recruit undervalued baseball players. Instead of relying on batting average, height, and weight normally associated with certain positions, Beane looked at in-game activity, such as how many times a player made it to base and scored a run. In the end, his data-driven team-building strategy led the Oakland A’s to win a record 20 consecutive games.

So what does all this have to do with legal departments? Billy Beane used data-driven decisions to build a winning team. Turns out, so can legal departments, using data from their vendor management solutions to build a winning team of outside counsel and law firms. In fact, baseball and vendor management overlap in several areas.

Managing Your Vendor Team

Every baseball team has a manager who oversees and is responsible for game strategy, lineup, practice, instruction, and more. Vendor management allows you to be the “team manager” of your vendor lineup with a holistic view and metrics into vendor costs, matter type distribution, efficiency, diversity, timekeeper performance, and more. These detailed metrics help you evaluate, comment, rate, and score firms, giving you the data you need to better manage and evaluate the value you receive from vendors.

Picking the Right Vendor

On a baseball team, all players have their designated position to play—a place on the field where they have proven to excel. With vendor management, you have a structured, data-driven process that shows which vendors excel at which type of legal work. With easy-to-use scorecards, you can quickly identify top, average, and low performers, making it easier to choose your key players.

Working as a Team with Your Vendors

To be successful in baseball, or any sport, the team has to work together as a cohesive unit—collaboration is essential. Vendor management makes it easier to collaborate with outside counsel and firms on matters, invoices, documents, fees, and even early payment terms. As result, you build a team roster of trusted relationships that are productive and rewarding.

From baseball to vendor management, data offers a tangible way to manage, monitor, and measure performance. For a law department, it’s important to build a winning team of vendors that it can count on to deliver results. And today, we have the technology to help in-house legal departments score unlimited homeruns using reliable data from vendor management solutions.

Some small tweaks to your RFP process can make a big difference in your results. Ideally, you want a process that both the buy and sell side find productive and efficient. That’s not always the case in many RFPs we are seeing today. Here are five questions to consider before you hit send that will help you have a better experience.

1. Did we provide the law firm enough time?
   If you are managing a large preferred panel RFP for 10+ practice groups, you should be providing the law firms a minimum of 3 weeks, and 5+ will get you the best responses. Giving a law firm only two weeks to complete a large panel RFP means you will get lower quality, rushed responses thrown together with no cohesion. If you want to ask questions that require partner time to respond to, you need to provide them time to manage their current client workload. If you are issuing a RFP for a specific matter, that’s a different timetable altogether. We typically see anything from 24 hrs to a week or more for matter specific RFPs. A good rule of thumb for the large preferred panel RFPs would be, whatever time you think it will take to add at least another week of cushion to your project schedule.
2. Did we provide ourselves enough time to manage the Q&A process? (Panel RFPs only)
   Some legal departments underestimate the volume of questions they will get back from law firms during the Q&A process when managing an RFP with dozens of firms. Some will be complex questions that will need input from the general counsel or others in the business team and you may have only provided yourself 48 hours in the RFP schedule. Once you commit to answering one, you have to answer all of them. What then happens is law firms often can’t start the response until you have provided answers ultimately leading to an extension needing to be granted.
3. Did we provide enough information?
   If you want a law firm to be able to provide a thoughtful response on a fee proposal, outside counsel guidelines or their recommended legal strategy, you need to provide them with enough background information. The biggest complaint you will hear from law firms is how can we answer question X, if they didn’t tell us Y. That goes for not only pricing but also for practice coverage and overall scope of work. For example, If you are asking for a firm to bid on your IP work, and they have never done work for you in that area before you will need to open the curtain a bit if you want responses of any merit. Otherwise you will get marketing fluff that all will sound very similar.
4. Did we create a path of communication with the marketing contact?
   At some point of your RFP process you should be collecting the name of the marketing or responder contact. Having another contact beyond the lawyer will eliminate potential bottlenecks and allow for a much better flow of information between the issuer and responders during and after the RFP process. This connection beyond the relationship lawyer allows for that process to happen more effectively. The marketing team will be the most effective way for you to collect relevant information from the law firm – they know who to contact and what the firm does and doesn’t have available. Sometimes a 30 second phone call with the marketing contact clarifies a question that otherwise would have led to 12 pages of unnecessary information.
5. Did we ensure the responses won’t be overwhelming?
   A well-crafted RFP needs to find the balance of how to collect the right level of data to help you make a decision, but not so much that the RFP review and scoring process becomes overwhelming. It’s a great idea to use word counts and page limits – but you also need to be realistic. If you are asking a law firm to describe why they may be a better choice then their peer firms – it’s next to impossible to do that in fewer than 250 characters. If you have dozens of practice groups being included in the RFP, consider the fact there are many firms who will respond in all areas. You want to consider different strategies to find that middle ground of collecting content that helps you set the table for the decision making process while not being overwhelmed with 100 page responses.

Both law firms and legal operations departments will have better experiences and get better results when the RFP provides ample time, asks smart questions and allows law firms a platform to highlight their competitive advantages.

Matthew Prinn is a Principal with RFP Advisory Group, a consulting company that specializes in RFPs for the legal industry. For more tips on the RFP process, check out RFP Advisory Group’s recent webinar we hosted with the Association for Corporate Counsel: How to use an RFP as a tool to manage outside counsel.

We’ve met with more than 50 clients in the past 12 months and have enjoyed a front seat to the transformation happening across legal departments. Our meetings have reinforced that CLOC’s 12 core competencies are not stagnant and continue to evolve in their application and impact. Here is a taste of what we are seeing you all accomplish. You can use these to plan your next project, benchmark with your colleagues, and to continue to show the value that you bring to your legal departments and companies.

Financial Management: This has evolved into so much more than simply reporting on spend or managing to the budget. Legal departments are overlaying spend against key objectives of the company to ensure that the allocation of legal resources aligns with the strategic priorities of the company.

Vendor Management: We started with preferred vendors and negotiating favorable pricing. Legal departments are working with vendors to solve common challenges in technology, ediscovery, and more. They are also asking vendors for data dashboarding to spot trends and inform future action.

Cross-Functional Alignment: Legal operations roles are often filled with business professionals from within the company, including finance, products and IT. These hires bring with them relationships and institutional know-how, and allow companies to repurpose people, process, and technology used in the business for use in the legal department.

Technology & Process Support: Legal operations is changing the culture of legal departments by driving the adoption of technology and incorporating process-driven workflows into serving the business.

Service Delivery & Alternative Support Models: This is not just about insourcing versus outsourcing. It is about right sourcing the work to ensure that tasks are assigned to the right resource. This allows everyone on the team to focus on the high-impact and high-value work. Legal operations professionals are shining a light on churn and helping legal departments to stop doing tasks that don’t bring value.

Organizational Design, Support & Management: Legal operations departments are no longer behind the scenes. The groups are front and center within legal departments and the business. Legal operations professionals are increasingly leading pitch meetings, panel selection, fee negotiations, and outside counsel evaluations, and have more optics into organizational changes impacting their legal departments.

Communications: Together with their GCs, legal operations departments are helping accelerate change and are creating innovation fluency about the company’s business and legal industry. At legal department meetings, they are highlighting how technology is transforming their business, mapping legal goals to innovation objectives of the business, and are training on skills core to legal operations. At legal department retreats, they are changing the curriculum to include design thinking sessions, technology updates, and data metrics discussions. They are also bringing together outside counsel to share innovation success stories so that they may be replicated across all firms supporting the company.

Data Analytics: Using data, legal operations is changing the conversation about value. What is the business goal for the matter? How will success be measured? Are legal resources aligned to the business’s strategies? Legal operations departments are driving the creation of dashboards to spot trends, inform future action, and identify missed opportunities. They are also capturing knowledge about the performance and use of their outside counsel. This includes tracking who at what firms have done work in particular areas for the company, working toward a future where legal operations can provide predictive analytics on who is best suited to solve a specific problem for the business.

Litigation Support & IP Management: Legal departments are partnering with IT to bring even more of the ediscovery lifecycle in-house. Teams from information security, IT, internal investigations, and legal operations are working together to show how particular license offerings can reduce spend exponentially. They are using advanced features to identify risk before litigation and are reducing their digital footprint with their vendors by 50 to 90%.

Knowledge Management: In response to the needs of the business, especially during periods of rapid growth, legal operations departments are creating on-demand, self-service legal solutions for their internal customers. To do so, they scope what the business needs, how much of the need requires interaction with a lawyer, and what portion can be solved with automation and standardization. These solutions are driven by playbooks, AI and legal bots.

Information Governance & Records Management: Legal operations departments are creating programs that provide the business better access to information so that it can harness data for a strategic advantage and, in some cases, monetize that data. They are driving the creation of policy and procedure that is practical and enhances service to the business. They are also complying with emerging data privacy laws and protecting against data breach and the associated reputational damage.

Strategic Planning: Legal operations leaders are reporting directly to their general counsel and are helping set the strategy and goals for the legal department. They increasingly have a seat at the table and are measuring their achievement and performance against the established goals for the legal department.

The Vital Role Of Reporting For Legal Operations

Easy to use, clear and comprehensive reporting functionality has evolved from an added bonus to a must-have requirement for corporate legal teams when evaluating legal technology. The pressure on legal operations to demonstrate improvements and return has led to reporting features being almost as important as the fundamental benefits of the software tool in use.

Where legal operations is missing a trick is when data analysis from a particular tool is used in isolation. To use legal spend management software as an example, out-of-the-box spend reports and user-friendly analytics wizards allow legal departments to monitor work in progress, measure actual spend, and forecast budgets accurately.

That’s not to say legal spend data isn’t useful on its own. On the contrary, legal operations teams use spend data to make better matter resourcing decisions, negotiate discounts, get more value from firms, and hire more internal staff.

Combining Legal Data To Better Manage Risk

Where the in-house legal function is working closely and in partnership with the business units across the company, the range of information and data it holds will often put it in a unique position within the organisation. This data not only supports an awareness of what the business is doing but also forms part of the historic corporate knowledge that is built up over the years; such as previous contracts, decisions and outcomes. Historically, this information was not held in a structured electronic format, which meant any form of data and trend analysis, as well as knowledge management, was extremely manual and time consuming.

With the increase in legal matter management and legal spend management solutions as well as better document search and retrieval there is a growing need and clamour for data processing, data analysis and knowledge management. Capturing basic contract terms and/or details of legal opinions in a matter management system provides a very simple knowledge management tool and a rich source of data. Other tools that will help provide data are any solutions used to create standard contracts, access to benchmark reports, as well as internal resources (finance reports etc.).

Those legal operations teams that are seeing the most value are those that combine data from various technology tools to take their strategic input to the next level. One such area is management and mitigation of risk.

A legal operations team that is carrying out data analysis on all the data at its disposal will be in a position to identify trends that will lead to a range of questions that should spark further debate, such as;

• How much work is done “in-house” versus being sent externally?
• Are the correct processes being followed?
• Are we getting the right level of technical support for the type of transaction?
• Is there a growth in the types of transactions either at a business unit or country level?
• Is one firm being used more than others for similar types of transaction from a particular part of the business / legal team?
• How does the firm perform against others for similar types of transaction both on price and performance?
• How does the business differ to market peers?
• What is required to manage a specific regulatory change?
• Is the in-house legal function and its staff compliant with the relevant regulatory authority guidelines, such as the Solicitor Regulation Authority (SRA) etc.?

Below are some examples of how the answers to these questions could demonstrate a change in the risk profile and risk appetite.

By monitoring the volumes of work, what type of work is being done, who is doing it (in-house lawyers, external lawyers or a combination of both), the time taken, the costs etc. the legal operations teams will be better placed to advise on the organisational design, support and management of the legal function as well as the risk profile and the risk appetite of the legal function and in certain cases, the supported businesses.

A better understanding of what is being done and by whom, will help ensure that the legal function is properly resourced, is not taking on activities that are better placed in other parts of the organisation, and that the appropriate processes and procedures are in place and controls are being administered. For the legal function and its in-house staff, this might include ensuring that they are complying with the rules of the governing bodies such as the SRA, NALP, the Federal Bar Association in Germany etc.

Spotting an uplift in a particular type of work (such as litigation) or activity (such as drafting) could indicate a lack of understanding of the contract terms within the business front line areas who are requesting contract changes, bad working practices, poor standard documentation, or changes in the markets and/or economic climate (each of which also presents opportunities). Legal operations teams can help to mitigate these by highlighting trends and ensuring that the legal function;

• Delivers better training and communication to the business and legal function
• Carries out regular reviews of standard documentation,
• Supports reviews of policies, practices and procedures, and
• Develops a better understanding of the market.

Consistent use of one firm over others should provoke questions as to why that firm is being used. It may be that they are very competitive on price or they have the appropriate skill sets. Fixed fee arrangements are increasingly popular, but if the firm is not providing any supporting timekeeper activity data, it becomes difficult to know whether the firm is providing the right level of technical support and whether the fee structure is still fair and balanced. As part of the legal operations team’s vendor management programme, they should ensure that that firms are maintaining the right level of skill sets for the work they are being asked to undertake, as this will help mitigate legal risk caused by a lack of technical knowledge and support. For the more complex deals it would be normal to see more senior lawyers engaged with the matter.

With the increase in cyber security and greater scrutiny by regulators who are starting to require more rapid, robust, evidence-based reporting, the need for greater use of these solutions is becoming more prevalent to avoid data being compromised and fines being levied. Understanding what data has been passed to which supplier helps ensure that those suppliers have appropriate controls in place to manage that information in line with Information Governance and Records Management policies and procedures and that any breaches promptly reported.

It is also worth noting that a lack of data in the legal systems is equally as insightful as it will show where parts of the business and/or legal function are not following agreed practices and procedures. Furthermore, using “gap” reports in the legal systems helps identify problems within the data that will distort any data analysis.

For legal operations teams to deliver process improvements and efficiencies, ensure compliance with policies and regulatory requirements, optimise their spend and manage risk, they should analyse the data that is available to them from all the data sources at their disposal. As they start to analyse all their data, instead of analysing point solution data in isolation, they will start to discover new trends and insights not previously seen or understood.

About BusyLamp

Founded by a team of lawyers and powered by frustrated users of endless spreadsheets and clunky legacy legal tech systems, BusyLamp is the leading SaaS alternative for efficient legal operations. We help legal departments save time, significantly reduce costs, and collaborate more effectively with in-house and outside counsel by simplifying and improving their legal processes. Legal departments leverage our end-to-end solution to improve visibility and efficiency from pitch to completion. Become a member of the BusyLamp user family and take advantage of our sophisticated sourcing, fee tracking, e-billing, matter management and vendor management features, all with powerful reporting and analytics.

www.BusyLamp.com

Jenita Gillespie is Director of Legal Operations at Bon Secours Mercy Health. While she was originally hired as a Paralegal eight years ago, her personal path to the directorship is also the story of the transformation of legal operations at Ohio’s largest healthcare provider – a story that highlights the successes that can come with implementing strong, data-driven processes. We recently had the privilege of sitting down with Jenita to discuss how she was able to drive this transformation so other legal departments can learn from her story.

How the Legal Operations Function Evolved

When Jenita joined Mercy Health – prior to its merger with Bon Secours in September 2018 – there was no legal operations department. Using her background in billing for law firms, she began closely analyzing the bills coming into the Mercy Health legal department and realized the department was being overcharged in some cases. While her supervisor initially dismissed her claims, Jenita was able to present data that identified clear discrepancies between what some law firms and technology vendors billed for and the services they actually provided.

After presenting her findings, Jenita began to advocate for a more systematic approach to billing and other operational functions at the Mercy Health. Leadership agreed, and she was asked to oversee the implementation of a legal process management system that integrated data from a variety of applications across the organization. Implementation of that system, which made it much easier for Mercy Health to track, analyze and manage work across multiple workflows, generated initial savings of $1.25 million, and Jenita was subsequently promoted to Manager of Legal Information Systems.

Jenita was thinking well beyond solving the department’s immediate billing issues and began to focus on developing more effective processes in other areas like vendor management and financial management. She gradually began to implement a series of process improvements. One of these improvements was establishing strict guidelines and procedures ensuring that every outside counsel fee arrangement had to be approved by the legal operations department before billing, and that any work billed by outside counsel that had not come from legal would not get paid.

With fee approvals done by legal operations and data from the legal process management system, Jenita’s team was able to carefully monitor bills coming from outside counsel and quickly identify previously unrecognized patterns in billing practices. She was able to catch inconsistent pricing and unreasonable increases that had been overlooked, and decided to implement billing violations to ensure the department would no longer be overcharged.

With increasing visibility into legal spend, she gathered data related to real estate matters and determined the company’s spending well above market rates. Her data and reporting convinced leadership that Mercy Health could spend a quarter of what they were paying to outside counsel by hiring an in-house lawyer to handle real estate. When Jenita discovered that other firms were also failing to bill market rates for other practice areas, she was able to negotiate outside counsel rates down hundreds of dollars per hour in some instances.

With examples like these, and with her entire department adhering to the streamlined procedures she developed, Jenita was able to get support from the Chief Legal Officer of Mercy Health and the finance department to maintain consistency and efficiency in workflows and financial management.

As Jenita’s work expanded to areas like technology and process support, data analytics and business/operations reporting, she petitioned for another promotion to accommodate all her new responsibilities. After consulting resources from the Corporate Legal Operations Consortium (CLOC), she determined the role of Director of Legal Operations encapsulated all that she did, and delivered that job description to her supervisor, who then approved. While CLOC resources were not responsible for Jenita’s promotions, they did give her a more comprehensive view of legal operations, which she was able to communicate to leadership. The resources also helped her show leadership how streamlined, effective and efficient the legal department could be with a legal operations director implementing a strict, data-based approach to process and workflow refinements and providing continuous oversight.

What’s Next for Legal Operations?

Jenita not only discovered new ways to manage spend and streamline processes for the for Mercy Health’s legal department, but she also found additional savings and efficiencies through the company’s merger with Bon Secours – integrating the companies’ information systems and legal operations workflows in just six months. Jenita’s story is an example of what’s possible with the right resources, data and technology. Law departments worldwide should carefully consider how a more systematic approach to legal operations can help them achieve substantial cost savings and efficiency improvements. What was possible for Mercy Health’s law department is achievable for others. Data-based processes and decision-making – driven by go-getters like Jenita – represent a promising way forward for legal departments.

Aaron Pierce is vice president & general manager of LexisNexis CounselLink.

As an important aspect of vendor management, outside counsel billing guidelines are a foundational element of the CLOC Core Competencies. Billing guidelines are one of the key components of good, strong relationships with vendor partners—but sometimes those partners miss the mark by engaging in common billing violations that could hurt your organisation.

Unfortunately, corporate legal departments (CLDs) are all too familiar with this challenge. As billing guidelines become more complex, CLDs are discovering more guideline violations from their outside counsel, some of which can be hard to spot with manual invoice review processes. Often these violations are inadvertent, and the law firm may not even realise that they’re out of compliance with your guidelines. Meanwhile, the CLD is subjected to spend leakage that can result in the loss of millions of dollars per year.

That’s a problem, especially when general counsel around the world are increasingly expected to run their CLDs like a business unit. Corporate legal teams need mechanisms to help them easily identify where the leakage is coming from, and when a billing violation has taken place.

Look for These Typical Violations

It helps to be able to identify the most common violations and their potential impact on the organisation. According to data derived from Wolters Kluwer’s ELM Solutions’ LegalVIEW® BillAnalyzer data, here are five violations that can have a direct impact on CLDs’ bottom lines:

Block billing: Block billing homogenises multiple tasks into a single billing entry. Block billing makes it difficult to correlate work to specific matters. That, in turn, makes it tough to discern how long it took to complete a particular task—a useful guideline that CLDs can use to estimate the length of time and money that should be allocated for similar projects in the future.

Vague task descriptions: Lawyers tend to like a lot of detail in everything, including the invoices they receive. Invoices with vague descriptions lack specificity about the purpose of the tasks completed. Phrases such as “case management,” “attention to file,” or “prepared for staff meeting” billed for 12 hours obscure the details of the work done and can make it difficult to reconcile timekeeping hours or determine compliance with billing guidelines. Ambiguous billing descriptions cannot fully illustrate the connection between the work your outside counsel is doing and the value that they’re adding (or not adding). All of which hurts your ability to display accountability to your organisation’s C-suite.

Violation of core billing guidelines: Certain line items may not follow a CLD’s core billing guidelines. Examples can include duplicate or excessive line item charges, up billing (rounding up time entries to the hour or half-hour, rather than in increments of 1/10 of an hour, which can lead to overbilling), or anything else that may be considered in conflict with the CLDs’ billing policies.

Matter management: Matter management violations occur when a firm disregards a CLD’s alternative fee arrangements or flat fees for a specific matter, or when they bill to the wrong matter. Often, these violations are completely unintentional, but they must be flagged to ensure billing is attributed to the appropriate matter and adheres to whatever fee arrangement is in place.

Late invoices: CLDs are being asked to become highly assiduous when it comes to controlling spend and budgets. Prompt payment of invoices helps keep things on track from a financial perspective. Unfortunately, many firms do not issue invoices on time, often waiting 31 days or more to send out bills. Just as in one’s personal life, a late bill is often considered a surprise bill, and a delayed legal invoice can create challenges for CLDs that are trying to effectively track, budget and plan their expenses.

Bill review processes that use technology to automate and analyse invoice data can flag potential violations and improve compliance with greater speed and accuracy. CLDs can be alerted to potential discrepancies quickly to avoid revenue leakage and maximise their ability to become profit centers for their companies.

If you’d like to learn more about current priorities and trends among general counsel and legal departments, see this summary of the GC Barometer 2019 findings.

About Wolters Kluwer

Wolters Kluwer’s ELM Solutions is the market-leading global provider of enterprise legal spend and matter management, contract lifecycle management and legal analytics solutions. We provide a comprehensive suite of tools that address the growing needs of corporate legal operations departments to increase operational efficiency and reduce costs. Corporate legal and insurance claims departments trust our innovative technology and end-to-end customer experience to drive world-class business outcomes. The award-winning products include Passport®, the highest rated ELM solution in the latest Hyperion MarketView™ Legal Market Intelligence Report; TyMetrix® 360°, the industry’s leading SaaS-based e-billing and matter management solution; CLM Matrix, named a “strong performer” in the 2019 Q1 CLM Forrester Wave report; and the LegalVIEW® portfolio of legal analytics solutions based upon the industry’s largest and most comprehensive legal spend database, with more than $130 billion in invoices.

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Guide by Wolters Kluwer ELM Solutions

This guide will help your organization understand where you are on the spectrum of effectively using Business Intelligence to drive decision-making and can serve as a good baseline of the fundamental disciplines that are key to ensuring an effective and successful data-driven legal management program.

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