Guest Blogger: Catherine J. Moynihan is Director of Legal Management Services at ACC, where she helps inside and outside counsel advance skills in managing the legal function. @CathJMoyn
The ACC Value Champions are managing the heck out of legal spending — analyzing cost drivers, converging law firms, in-sourcing, targeting key goals, resourcing flexibly — in short, reengineering the legal function. And the cool thing is, rather than becoming factory-like shops (as these B-school-ish terms may connote), the champs, both inside and outside the corporations, are clearly enjoying a more satisfying way to practice law.
The winning submissions from the 2013 ACC Value Champions yielded some interesting statistics:
- Mondelez International and Axiom reviewed 40,000 documents that involved 6,000 counterparties in 35 days.
- China State Construction’s in-house legal team of five people handles the legal needs of a company that employs 4,527.
- Seyfarth Shaw attorneys can triage and assign Nike procurement contracts to the right resource in under 60 seconds.
- NetApp’s Instant Nondisclosure Agreement has reduced processing time from 2-3 weeks to 2-1/2 days.
- Bank of America’s 2013 legal spend was within 1 percent of forecast.
These figures are aside from the — in some cases staggering — amounts of money saved by ACC Value Champion companies through their implementation of value-based fees, which include pay for performance. For example, Office Depot has saved 65 percent on attorneys’ fees and costs just in patent troll litigation alone. Marsh & McLennan has saved 56 percent since 2008. Italy’s ACEA Sp.A. has decreased its external fees by 31 percent.
All very impressive. But what was notable across the board is that our Value Champions have reaped rewards that go far beyond the financial. In fact, it was striking in our interviews: Everyone seems so much happier, finding their work infinitely more satisfying. As in-house counsel have assumed leadership roles in exploring a variety of resources and arrangements to get the work done and as external law firms have opened themselves up to these possibilities, other benefits have been conferred on both sides.
Strategic work. The most notable among the intangible benefits mentioned by more than one Value Champion is the satisfaction they feel when they’re able to practice at the top of their game. “Any lawyer wants to do the most sophisticated work they can,” says Nike’s Grant Hanson. “We have pushed legal up the value chain, moving our lawyers in front of external customers, suppliers and regulators,” says Chris Fowler at BT Global Services. “It has enabled us to put focus and resource on hard-core legal work and our employee engagement scores have increased.”
R-E-S-P-E-C-T. At ACEA Sp.A., more information sharing and responsiveness has improved perception and appreciation by internal customers. “We are seen as more competent, more proactive and more efficient,” says Renato Conti.
Trend-setting. In assembling their Litigation Roundtable, Bank of America trimmed external firms from 700 to 30 go-to firms for all defensive litigation. “Other lines of business have now followed our model,” says Lani Quarmby. Similarly, the technology planning undertaken by NetApp legal has improved its profile: “We have shared our successes and cross-pollinated,” says Matt Fawcett.
Enhanced trust. More information is shared between firms and clients; and honest conversations fuel continuous improvement — and don’t you know it feels good to get better? “The most important thing about our arrangement with Borden Ladner Gervais is that the two sides view one another as partners,” says HIROC’s Mike Boyce. “You must mean it; things won’t work if the relationship is adversarial.”
More insight. United Technologies Corporation surveys its in-house lawyers about external firms every two years. “This is designed to provide firms with actionable feedback, and serves as another mechanism for reinforcing our partnership approach,” says Kimberly Townsan. Meanwhile, Marsh & McLennan’s RFP process was “a great educational process for us to learn about the firms we work with and their lawyers,” says Michael Caplan.
Innovation. “I love the work we’ve done with our patent troll litigation,” says Elisa Garcia at Office Depot. “We reached out to our peers in the restaurant industry to find a joint defense model; now retailers band together and fight these cases.” And they use value-based fees to make it cost effective. Speaking of innovation, how many companies out there want to adopt Nike’s and BT Global Service’s slick triage systems?
Competitive advantage. When Axiom agreed to work on Mondelez International’s contract review project, the company had an opportunity to develop a new competency. “We had done similar work on a smaller scale,” says Thomas Finke, “but we have done more than 20 similar projects since. Mondelez was an incredible thought partner.” “It’s luck that we found one another,” agrees Gerd Pleuhs at Mondelez.
Benchmarking. When Shook Hardy & Bacon brought 13 co-defendants together for the “hot fuel” litigation, 7-Eleven’s Shawn Shearer found himself with lasting professional ties: “I’ve been able to use those contacts for a variety of different, unrelated projects — benchmarking and so forth. The group has remained very active and engaged.” Similarly, BofA’s Litigation Roundtable has spawned a sub-group that has made huge inroads in managing ediscovery costs and processes by sharing best practices.
Enhanced quality. The “hot fuel” co-defendant approach brought improved legal outcomes as well, says SHB’s Tristan Duncan. “This was cutting-edge, complex litigation. All our moves were fully vetted,” says Duncan. “It is a tribute to this group of in-house counsel that they worked so well as a group. The result was better lawyering.” And by upping its “Legal Value Index” scores, BT Global Services‘ in-house team is providing specialized legal advice in more areas.
Satisfaction. This is the best part. For these outside counsel at least, gone are the days of minding the clock and being micromanaged by the client — rather, they enjoy integrated status as part of the client’s team. “The relationship guarantees things to both parties,” says Boyce of HIROC. “There’s no question that the arrangement strengthens the mettle of our conscience,” says John Morris at BLG. “But there’s no sense that the client will grind us down.”
We salute the ACC Value Champions for forging a better — and more enjoyable — way to do business, through value-based relationships.