Join this dynamic session with guest speaker, Harrison Underwood of GoTo Foods, speaking about spend management for corporate legal departments. He will discuss key critical KPIs and will have a raffle for an electronic version of Legal Operations KPIs – The Professional’s Handbook to Operational Experience.

Hosted by CLOC Atlanta, this virtual event is open to all CLOC Members.

Associated with Atlanta

Join this CLOC Mexico group event exploring innovative spend management approaches in the legal sector. Discover how legal ops teams can enhance cost-effectiveness through strategic spend management initiatives.

Learn from Fran, an expert in regulating budgets, rate increases, and managing relationships with external firms. Explore the benefits of fixed fees and competitive bidding, including a trial with Pursuit’s specialized software. Understand how to facilitate live auctions among multiple firms and the advantages of outsourcing with ALSPs.

We’ll cover various budget types, such as hourly, fixed fees, phase payments, and outcome-based contracts. This session is tailored for in-house legal teams in Latam and includes practical tips on enforcing outside counsel billing guidelines. Don’t miss this opportunity to transform your legal spend management and drive substantial cost reductions.

Associated with Mexico

Join your CLOC SF Bay Area regional group for a continuation of our last virtual roundtable. This month’s discussion will again be all about e-billing and outside counsel management. Topics will include AFAs, accrual management, and metrics/business intelligence. Bring your questions and expertise and let’s learn from each other. We will be limiting the number of attendees to ensure group participation, so register early.

This session will be moderated by Deborah Haile, Associate Director, Legal Operations at Gilead Sciences, Inc.   

Associated with San Francisco Bay Area

Insights from our recently-released white paper, “Turning Legal Into a Value Center” 

Providing more value for legal services is one of the top initiatives for most legal departments this year. According to a recent Thomson Reuters report, 78% of legal departments say that controlling costs is a high priority. Seeing this general sentiment in surveys and in our conversations with legal operations professionals, we partnered with CLOC to put together a resource that provides a window into the strategies legal teams are using to address this priority.  

The result is our white paper, “Turning Legal Into a Value Center,” which is based on interviews with 16 legal industry leaders and offers a jumping-off point for any legal department team looking for ideas and best practices around cost-saving strategies. In addition to giving a bird’s eye view of legal spend concerns, the paper discusses project prioritization, internal work allocation, the role technology plays, outside counsel management and more.  

Below you’ll find an excerpt, covering outside counsel management strategies. To learn more, download the full white paper here. 

Cost-Savings Strategies for Outside Counsel Management 

Many legal operations professionals and others throughout the legal industry have noted that there has been a mindset shift around the approach to outside counsel over the past decade or so. Corporate legal departments are looking more closely at their relationships with law firms and the value they provide.  

Alongside this increasing focus on value, more alternatives to traditional outside counsel have been created including legal staffing firms, Alternative Legal Service Providers (ALSPs), legal marketplaces and other “New Law” companies. This has put legal department leaders in the driver’s seat when it comes to optimizing legal spend through outside counsel decision-making. The strategies discussed below are important parts of the value conversations you should be having both internally and with your outside counsel partners. 

Right-Sourcing the Right Way 

The concept of right-sourcing is really where the rubber hits the road regarding this outside counsel mindset shift. Put simply, right-sourcing means sending legal work to the provider that offers the most value for that type of work. For most legal departments, this means first analyzing the type of work before deciding where to send it.  

Many factors can go into this decision, and it usually involves consideration of things like complexity, risk, scale and scope. Do you have a highly complex, bet-the-company litigation matter that you need handled? That should probably go to one of your trusted Big Law firms. But does it make sense to send less risky and less complex transactional work to that same firm and pay their premium rate? Probably not.  

Many of the legal operations professionals we talked to tier or score work to help determine the right provider. For example, one company used an “ABC” format where work that was scored as an “A” would go to the top level of providers (e.g., Big Law firms, senior in-house counsel), “B” work would go to a middle level (e.g., specialized small and boutique firms, solo practitioners and some ALSPs), “C” work would go to a lower level (e.g., ALSPs, LPO, paralegals and other paraprofessionals, etc.) and so on. This type of analysis can also be visualized similarly to the cost-benefit analysis discussed above. Below is a simplified example of what this process might look like. 

Cost savings is one of the biggest benefits of right-sourcing. Utilizing small, midsize and boutique law firms or ALSPs to do work that you used to send to large law firms can reduce your legal spend substantially. Multiple companies we talked to said that analyzing your legal work with right-sourcing in mind was the key to reducing external legal spend and getting more value from outside counsel. Some companies encourage the process by creating a specific target—saying that a certain percentage of work has to go to midsize firms or ALSPs, for example, and anything over that percentage requires approval.  

Another important aspect of right-sourcing is it provides legal departments with more access to diverse law firms and legal providers. It’s no secret that the largest law firms are generally lacking in diversity. One legal operations expert described this as an easy “win-win”: Small and midsize firms are more likely to be diverse and they are more cost-effective. Right-sourcing work can help you support these important company initiatives and optimize spend at the same time. 

Less Is More – Panel Consolidation  

A common but more involved method for optimizing outside counsel spend is building a preferred law firm panel program. The idea behind a panel program is that you consolidate the outside counsel you work with and choose a smaller number of firms to give panel membership to. You then send the majority of your legal work to these preferred firms and in return the firms give you better terms, whether that means alternative fee arrangements, locked rate increases or volume discounts. Additionally, it can strengthen your team’s relationship with the chosen firms and improve the quality of work because the firms become more familiar with your company and how it operates.  

One legal operations professional we talked to did a panel consolidation project and reduced the number of firms their company regularly worked with by almost 90%—from around 700 to about seven. Not only did this drive efficiency by making it easier for the legal team to manage outside counsel work (fewer firms to onboard, communicate with, review invoices for, etc., means less time spent on administrative work) but it also drove spending down through better negotiations with those firms. Another company we talked to found great success by asking panel firms to agree to locked rates for a determined time frame, which was incredibly helpful for budgeting as the company could depend on known rates for the projects those firms took on. 

Building a panel is a huge change management project that requires a lot of time and attention. And it’s not always the right solution for every company, particularly companies with smaller outside counsel needs. If it’s something your legal department is curious about exploring, here are a few tips that the legal operations professionals with panel experience shared. 

Quick Tips for Panel Success 

• Consolidate, but not too much. If you make your panel too small you could lose bargaining power and actually see your rates increase.  

• Review your panel on a regular schedule. Usually yearly, most companies running successful panel programs review the cost, performance, timeliness, and other aspects of their panel firms on a regular basis to decide to continue with current panel members and/or bring new firms on.  

• Utilize it consistently. The more you allow “step-outs” to your panel firm, the less useful the data you collect will be. For companies that use it consistently, panel data gives a great window into legal spend and aid budgeting and forecasting processes. 

• Consider a hybrid panel. For companies with large regional needs or lots of niche work, a panel might not make sense at first glance. But you still may be able to create a panel of firms for high-profile, “bet-the-company” cases and make a significant impact on those costly matters.  

For more cost-savings best practices, strategies and insights, download the white paper, “Turning Legal Into a Value Center.”  

Managing legal spend is a team sport. What if you could put the right legal spend information into the hands of the right stakeholder — at the right time?

To accomplish this, aligning your people, technologies, and processes into a single strategy will be paramount – especially as law firm rates continue to climb and internal resource constraints increase the pressure on legal departments. The right spend management platform can give you complete control over your financial management process with transparency into outcome metrics to help you deliver accurate forecasting and best-in-class value.

Sponsored by Wolters Kluwer

CLOC Atlanta has partnered with Wolters Kluwer to host a community social & networking event. Take advantage of this opportunity to join your regional colleagues for an elevated evening at 5Church Buckhead. This CLOC Atlanta community experience will include insights on legal spend management, and ample time to connect with local peers for networking and shared learning.

Agenda

Seats are limited and available on a first come, first served basis. Please register promptly to secure your spot. Due to limited seating – if something changes your ability to attend, please notify CLOC at your earliest opportunity so that someone else may have the opportunity to attend.

Event Location: 5Church Buckhead, 3379 Peachtree Road, Atlanta, GA 30326

Associated with Atlanta

This webinar will share the findings from an upcoming white paper produced by CLOC and Priori, as well as feature discussion with some of the legal operations professionals who participated in the white paper. You’ll learn about trends in how legal departments of all sizes are approaching legal spend and gain insights into their decision-making processes. 

Topics to be covered include a framework for prioritizing legal spend projects, key considerations for analyzing legal spend (such as internal resources and work assessment, legal technology and outside counsel and other external resources), and how departments consider these factors and make decisions that optimize spend. 

Join CLOC Washington, D.C. for an in-person gathering on Thursday, March 21st.  Regional Group members will meet at Meta: 575 7th Street NW, Washington D.C., 20004.

Discussion topics will include:

• Budgeting and Outside Counsel Rate Guidance
• Upcoming CLOC Global Institute
• Open Discussion & Networking

Following the discussion, CLOC Washington D.C. invites you to join for happy hour at MI VIDA.

Can’t attend in person? Register anyway and receive a zoom link to join virtually!

Associated with CLOC Washington D.C.

Modern legal entity management has finally transcended its traditional confines in the general counsel’s office, and not a moment too soon. In fact, we see this happening more frequently, with legal departments increasingly involving compliance (48%), governance (38%), finance (35%) and tax (25%) business units in entity management activities.

By no longer limiting itself to a small team of legal colleagues, the corporate record can finally be used for strategic decision-making. However, even with more business units participating in entity management, is there room to make this an even more powerful partnership? The answer lies with your colleagues in Finance & Tax.

Finance: Follow the money

Formally engaging the finance department can help more senior executives beyond the general counsel’s office understand entity management as an important business priority. Finance departments are often profit centers (as opposed to the legal department, which is often viewed as a cost center).

And for finance teams, entity data is increasingly important to their strategic planning processes. This year, the volatile markets and increased financing costs have pushed companies and funds to act more cautiously than in years past, with a higher priority on entity restructuring (and spinoffs), smaller M&A deals, and looking at past opportunities with fresh eyes. However, these short-term activities are only setting up for a bigger potential play in 2023; with high rates of undeployed capital — or dry powder — in the capital markets, 80% of Deloitte’s survey respondents believed that may be an opportunity to catch the wave and invest their cash as targets rise in value.

These opportunities, both short and long term, require a comprehensive understanding of entity data and a strong compliance track record to be competitive. Yet, 49% of companies still report using Excel to manage their entity data and a quarter reported at least one entity out of good standing in the last 24 months.

It is in the finance department’s best interest to find and invest in solutions that ensure the meticulous execution of entity management processes and empowers them to stay competitive for whatever opportunity arises.

Tax: Fighting complexity with collaboration

The Head of Tax seeks out opportunities that minimize costs and drive efficiency. Yet global complexity has hampered their agility in a trend that only seems to increase: in 2023, 45% of TMF Group’s accounting and tax experts anticipated compliance to grow over the next five years, which demonstrates the operational strain these business units are increasingly facing.

However, there’s acute awareness that with access to the right data at the right time, these heads of tax can ward off complexity. Focusing on global tax provisioning and integrating tax data company-wide are the top two priority for tax professionals in 2023, of which entity data is interlinked. By using technology to create a holistic view of the organization’s tax burden, this alignment with the legal team breeds efficiency, reduces redundancies and maximizes the potential for growth.

Entity technology: The path to partnership

In a world where collaboration reigns supreme, technology’s importance in connecting disparate business units cannot be underestimated. By creating a single source of truth for your entity data stored in a self-service database, tax, finance and legal teams can finally strategize from a collective playbook. This playbook can unlock the potential for growth, risk mitigation, and efficient decision-making. The era of entity management as a cross-functional responsibility has arrived, transforming it from an individual effort into the team sport it was always meant to be.

Diligent

Diligent Entities is the world’s leading purpose-driven entity management technology solution.  With solutions across governance, risk, compliance, audit and ESG, Diligent empowers more than 1 million users and 700,000 board members and leaders to make better decisions, faster. No matter the challenge.

Now that you know the value of partnering with tax and finance teams, take a closer look at how entity management technology can help you solidify that partnership and practice more efficient entity management.