Let’s continue the conversation from the January 29th CLOC Huddle. Legal Ops Professional members are invited to join this community huddle scheduled in response to the Community Connect post exploring strategies for reviewing and negotiating outside counsel rates. Attendance at the first huddle not required to take advantage of this continued conversation.
Please note: CLOC’s Legal Project Management Committee is also hosting a similar huddle on this topic later this month. Their huddle will be open to all ecosystem members. For continuing the conversation and hearing additional perspectives, please register here.
*This community thread is in the Legal Operations Professionals Forum and is restricted to this member type. This huddle is exclusive to Legal Operations Professional Members.
Introduction – Why is a discussion around outside counsel billing guidelines (OCGs) needed? OCGs are a “hot button” issue for today’s legal department, as having a well-defined OCG can enforce alignment with corporate values and compliance with internal policies as well as aide in cost control of legal expenses, transparency and consistency in billing process, and efficiency in invoice review and payment.
Question #1: How do clients manage compliance with outside counsel guidelines?
What is the process for circulating guidelines to outside counsel?
Can in-house attorneys deviate from guidelines?
Manual bill review v. ebilling vendors?
Do clients require cost recovery for ebilling? (qualify that needs to be general and not specific)
Externally accessible matter management systems?
Are there penalties for non-compliance?
Are rate increase requests tied to compliance?
Question #2: How do law firms manage compliance with outside counsel guidelines?
Outside Counsel Guideline training / summaries
Time entry guidance
Pre-bill evaluation manual v. automated
Question #3: How can clients / law firms collaborate to improve compliance?
How can outside counsel improve compliance?
How can clients help improve compliance?
This is meant to be a highly interactive discussion where everyone may interact via smaller breakout rooms. At the conclusion of the huddle, we will poll participants to determine the need for follow up sessions on this topic (general v. advanced). The discussion and its outcome will also be used as a basis for a future article.
A CLOC Huddle has been scheduled in response to the Community Connect post* exploring strategies and home grown solutions for reviewing and negotiating outside counsel rates.
Please note: CLOC’s Legal Project Management Committee is also hosting a similar huddle on this topic in February. Their huddle will be open to all ecosystem members. For continuing the conversation and hearing additional perspectives, please register here.
*This community thread is in the Legal Operations Professionals Forum and is restricted to this member type. This huddle is exclusive to Legal Operations Professional Members.
Join your CLOC San Francisco Bay Area regional peers for the latest installment in our virtual roundtable series. This month’s discussion is all about legal intake. We’ll address input channels (email, Slack, forms), sources of requests (internal, external, firms, partners), automations, and a variety of request types that need to be triaged, routed, and resolved. 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.
Strategies and insights from our white paper, “Turning Legal Into a Value Center”
Controlling costs is an evergreen concern for corporate legal departments. One incredibly important aspect of cost-saving projects is change management. In fact, a December 2023 survey showed that after cost containment, implementing business process improvements was the second highest priority for legal departments, with 46.7% of legal departments ranking it among the top three challenges they’re facing.
Priori and CLOC recently partnered on a white paper, “Turning Legal Into a Value Center,” which looks at different strategies that legal departments use to achieve cost savings. Unsurprisingly, change management was a key concept that underpinned many of the strategies discussed.
Below you’ll find some tips for handling change management—a key component of executing successful projects that optimize legal spend. To learn more, download the full white paper.
Packaging the Value Story – Change Management & Communication
Whether you’re launching a new internal initiative, implementing new legal technology or having conversations about spend with your outside counsel, clearly communicating your goals and expectations is necessary for success. Just about every task your legal department undertakes to drive business value and optimize legal spend contains elements of change management, and implementing change management well starts with communication.
There wasn’t one legal operations professional who we talked to that didn’t emphasize the role of communication. Here is some advice for approaching conversations and getting buy-in from stakeholders for your next project.
Start From the Top Down
When you’re launching a new initiative, it is important to get the top-level stakeholders on board from the beginning. If you don’t have the support of the people at the top, it can be hard to get other stakeholders and the teams that will help you execute to come on board and follow through with the vision.
Build Relationships
Starting with buy-in from the top sounds great, but how do you get there? Often, successful project management (in the legal operations space and elsewhere) is a long game. You want to show the stakeholders in your company that you understand where they’re coming from and what motivates their decision-making. Communicate throughout the year so you’re not just talking when something has reached a boiling point. The more you can empathize with and show respect for the work they do, the more they will be willing to trust you when the time comes to make a change.
Know Your Audience
Getting to the point where stakeholders trust you means learning about their roles: What their priorities are, the type of work they do, the pain points they experience related to legal, etc. Interview your business partners and get their perspective. When combined with metrics like projected cost or time savings, anecdotes about how a given project will help team members do their job better bring the narrative you’re trying to sell together.
Make the Business Case
Come into discussions with an inventory of what the situation is now, where you hope to get to upon completion of the project and recommendations for how to get there. This likely includes current data and projections about the project will affect those metrics (e.g., How much time does a task take now? How and why will this initiative reduce that time spent?). Show how the solution you’re recommending brings you from the current state to that desired end state.
Ultimately, getting buy-in for a project is about telling your value story. You want to bring your stakeholders along with you on this journey. The more you can get them involved and make them feel like they are a part of it, the more likely it is you’ll get approval and find success. Nobody should feel blindsided by the change you’re recommending, they should feel the opposite—that they had a say in how the project came together and are as much responsible for its success as you are.
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.
Join your CLOC SF Bay Area regional group for our latest installment in our virtual roundtable series. This month’s discussion will be all about e-billing and outside counsel management. 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.
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.
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.
In the fast-paced world of legal operations, managing high volumes of Subpoenas, Law Enforcement Responses, Garnishments, Levies, Liens, and DSAR’s can be a daunting challenge. These requests can present complex issues of jurisdiction and enforcement and a substantial, sometime insurmountable, constant burden on companies. Many of these repeatable processes can be outsourced at lower process points without increased risk, freeing key resources to focus on higher-value work.
Join us for an insightful webinar where legal industry leaders from Liberty Mutual and DoorDash will share their innovative strategies and solutions for efficiently and effectively handling high volume, lower risk processes that are eating away at your shrinking budgets.
What You’ll Learn:
How they partnered with an ALSP to offload some of the burden, saving time and money
How to identify and define processes that are ideal for outsourcing
How best to select the ALSP that has the experience to help
Use cases highlighting successful implementation of these strategies
Best practices for ensuring compliance while maximizing efficiency
