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The 2014 IC10: The law departments of the future

A pioneering spirit, willingness to take on risk and ability to learn from failure is a perennial commonality of all our winners

The legal department of 21st century has been tasked with overseeing an increasingly complex array of tasks, and frequently with stagnant or diminishing resources. If progress is humanity's ability to complicate simplicity, then innovation is its ability to turn complication into usable information and tools. Or to use one of the most tired phrases in the business space, to “do more with less.”

In our technology-obsessed culture, “innovation” is evocative of slick user interfaces or touchscreen displays. But true innovation, as it turns out, is really about approaching a fundamental issue with a new vision or perspective. Having the strength and forethought to bring that new way of thinking into your team's day-to-day operations is also paramount.

“It takes strength of conviction to say we are on a three-year path of change and the ability to maintain inspiration over the long haul—because people do get tired and they start asking ‘when is this going to become the status quo?’—there is no status quo. We have to become comfortable in this idea that we live in an environment of consistent change. …You don't rest on your laurels and say you’re done,” says Nancy Jessen, managing director of Huron Consulting Group.

The IC10 is all about addressing that never-ending maelstrom of change. Our winners were selected for their ability to simultaneously address immediate and long-term goals, bring a long-term project from concept to actualization, fight for the resources the solution required, and achieve buy-in from legal leaders—all while remaining flexible enough to take risks and learn from mistakes.

“In its essence it's really important for corporate law departments to be involved in the business processes and continuously optimize those processes to improve performance of the business as a whole,” says David Cambria, global director of operations, law, compliance and government relations at Archer Daniels Midland Company. “That's what keeps law departments innovative, creative and providing continuous value to the company.”

The IC10 has existed for over a decade, and in that time we’ve seen considerable diversity in the types of solutions that have been nominated. But that pioneering spirit, willingness to take on risk and ability to learn from failure is a perennial commonality of all our winners.

We’ll be reopening nominations for the IC10 in the spring of 2015, but in the meantime, read on to go inside the departments of the legal profession's top innovators.

Google: Mountain View, Calif.

One of the most ubiquitous corporations of day-to-day life—both in and out of the tech space—is undoubtedly Google. From its inauspicious origins as the pet project of founders Larry Page and Sergey Brin, the search engine erupted into cultural consciousness in the early 2000's, quickly becoming the “every-man's” portal to the Internet.

A culture of innovation has unquestionably played a role in Google's continued relevance in a rapidly and chaotically evolving world, and that spirit exists in earnest in its legal team. When the team needed insight into where hundreds of millions of dollars in its annual legal budget were going, the solution was an in-house effort that brought together IT and legal.

“I started working here in 2008 and realized pretty quickly that we had huge and growing legal costs, but not a lot of insight into where it was coming from,” says Google's head of legal operations Mary Shen O’Carroll. “I wasn't able to answer many of the questions that [Google general counsel] Kent [Walker] had for me, and that was frustrating.”

Fortunately, that frustration and thirst for insight, coupled with creative problem solving resulted in the concept for Google's Outside Counsel Dashboard (OCDB). The dashboard is an easy-to-use online tool that gives attorneys a near real-time view of their outside counsel spending activity across all matters they oversee. The OCDB not only displays this information in an intuitive way, but provides information that can be analyzed with considerable granularity.

O’Carroll, who was instrumental in nearly every stage of the development and implementation of the OCDB, says that ease of use was a must for fostering adoption of the tool. “The design of the user interface was incredibly important; it had to be intuitive enough that it didn't require training, which is one of the principles we had in designing the system. I think we’ve achieved that; people are going to the site and using it.”

But the simple and elegant interface belies the complex, multiyear effort that went into the creation of the OCDB, and the tremendous feats of cross-departmental orchestration it required.

The first course of action for the team was defining the goals of the tool and understanding that the creation of a multi-purpose “Swiss Army Knife” that could answer all questions while remaining simple to use was biting off more than the team could chew. “I don't think anyone's ever found that particular unicorn,” says Google general counsel Kent Walker.

Once the specs were set, another challenge presented itself. “The real heavy lifting came in the inglorious work of cleaning up the data, establishing standard categories for matters, vendors and timekeepers, and creating consistent processes,” Walker explains. “We didn't have much to show our users for a long time, then one day we were able to shift them over into a new and better experience.”

While Google is able to collect metrics that confirm widespread adoption of the OCDB, the truest success factor has been the feedback the operations team has received from users. “People tell us, ‘I used the OCDB today while I was on the phone with outside counsel and I was able to pull up information right there.’ Having people tell us they’re able to make decisions on the fly and negotiate in real time is great. Having them empowered when they have conversations with law firms has been really impactful,” O’Carroll says.

—CHRIS DIMARCO

Above: Google General Counsel Kent Walker

Photography by ASA Mathat

NetApp: Sunnyvale, Calif.

As the data storage provider to some of the world's largest organizations, NetApp lives by the tenets of innovation and accountability. When every piece of your client's information is essential to their continued success, compromise of those fundamental values is not an option.

With those cultural underpinnings, it's no surprise that NetApp expected a similar commitment of engagement and responsibility from its outside counsel.

Law departments have historically lacked a strong method for verifying the “fairness” of the timekeeper rates they’re charged by outside counsel. As a result, there have largely been two options for departments: either engage in a resource-intensive process of vetting rates manually and renegotiating as necessary with outside counsel, or approve the rates, even though data analysis and a nagging feeling in back of your head suggests that some of them are higher than they should be.

But where other legal departments saw an unavoidable industry anathema, NetApp saw an opportunity. By combining the expertise of their operations team and working with selected outsourcers, NetApp was able change the dynamic it had maintained with firms, while reducing overall spending at the same time.

“NetApp is a high-tech company, and innovation is one of our key objectives. Successfully demonstrating innovation inside the department is a catalyst for continued efforts. Because this project focused on the relationship between our inside team and outside partners, a relationship that will obviously continue year after year, the project can serve as a platform for continued innovation in the way our legal department procures outside services,” explains Matt Fawcett, senior vice president, general counsel and secretary of NetApp.

The result of the attitude Fawcett exudes is an effort to target the way inside and outside counsel connect, and the result is “The Further, Faster Rate Wizard.”

The Wizard is a data-driven, objective method for reviewing rates proposed by outside counsel, which identifies a fair market rate acceptable to NetApp. “Firms no longer tell us what they will charge; rather, we tell them what we are willing to pay based on objective analysis of comparable work,” says Connie Brenton, senior director of operations at NetApp.

The project began with NetApp collecting and analyzing data on pricing both internally and from the market. Once the information was formatted, the company connected with Elevate, a cutting-edge managed service provider, to design a system that would analyze and compare timekeeper rates based on work type, complexity and impact.

Entering a rate request from a firm compares the figures to a series of benchmarks that confirm the “fairness” of the quote and can give approval if all criteria are met. Rates that fall outside of those requirements are countered at the lower end of the “fair” scale, incentivizing firms to work with NetApp to better understand benchmarks and come in more “fair.”

“To date, we have had only two discussions initiated by law firms about modifying the rates approved by our new methodology. Both of those discussions were early on and were basically a function of transitioning to a new process,” Brenton says.

By analyzing rates and automatically readjusting them to fall within reasonable market ranges for comparable work, NetApp lowered costs by an average of 7 percent, while rewarding outside counsel firms that propose market-appropriate rates.

—CHRIS DIMARCO

Above: Connie Brenton, Chief of Staff, Senior Director of Legal Operations; Tim O’Leary, Vice President, WorldWide Legal Commercial Group; Elizabeth O’Callahan, Vice President, Corporate & Securities; Douglas Luftman, Vice President, Innovation Services and Chief Intellectual Property Counsel; Sandy LaBrec, Executive Assistant; Matthew Fawcett, Senior Vice President, General Counsel and Secretary

Photography by ASA Mathat

The Hartford Financial Services Group, Inc.: Hartford, Conn.

The Hartford operates in all 50 states and must manage regulatory requirements in each state—and the 1,500 licenses necessary to do business. At one point, these licenses were managed by seven different business units, using multiple processes. This resulted in licenses that were allowed to expire. Clearly, a remedy was needed.

The resulting solution, the ELM (enterprise license management) system, came as a culmination of three years of work, from conception through development, implementation and socialization. The project was spearheaded by Terence Shields, assistant vice president and assistant general counsel, and Lisa Levin, counsel and subsidiary corporate secretary.

“We realized that the process of licensing had become fragmented, dispersed among seven different groups out of happenstance,” Shields says. “We owned a piece of that and were as guilty as any group of managing from the corner of our desks. We wanted to get filings executed in a timely manner without a lot of rigor.”

Levin described the situation as a web, with many different strands that led to many different stakeholders. “From an insurance perspective, licensing is core to what we do, but there wasn't any framework in place to execute on something so fundamental,” she says.

The first challenge, according to Levin, was to identify all of the stakeholders, which was tricky because they were not all speaking the same language. “It was like running a marathon in quicksand… We had to keep the doors open and the lights on, get those licenses off the corners of the desks.”

But the law department took the lead to improve the process, tackling what Levin described as a “data maze.” The ELM system is designed to tackle that maze, to identify the information that needs to be captured and to develop a hierarchy so it could be reported in a meaningful way both to the law department and the end users.

Many departments viewed these licenses as ancillary to their jobs. “Part of our goal was to make it even more ancillary so people didn't have to think about it as much,” explains Shields. “The end game was to make it hum on its own.”

After implementing the ELM, The Hartford saw immediate results. First, they were able to retire five different legacy systems from other departments, leaving the legal department to administrate the licensing system. The ELM also helped mitigate The Hartford's risk profile. They were able to file almost all of the 1,500 licenses in 2014, reducing the potential for fines. The data integrity provided by the ELM helped improve the quality of the licensing applications and gave the law department peace of mind about their filings. The design and implementation of the new process demonstrated that the law department can innovate with minimal spend.

And, while the ELM system sat at the crux of the solution to this license management problem, the key to innovation, Levin says, was the use of talent and time. “We think about shiny new objects or pieces of technology or new systems, but one takeaway from this process is that you can apply human capital and collaboration to implement process excellence in a law department,” Levin explains. By leveraging talented paralegals and IT processionals and a culture of collaboration, the law department was able to promote change and efficiency.

—RICH STEEVES

Above: Lisa Levin, counsel and subsidiary corporate secretary and Terence Shields, assistant vice president and assistant general counsel, The Hartford

Photography by Andrew Sullivan

Allstate: Northbrook, Ill.

The path toward successfully reaching a destination is rarely found by moving in a straight line. Even when following a map—or in most cases these days, GPS instructions—there can be bumps and hurdles, twists and turns. The same is true of the Allstate legal department's journey toward innovation.

“The path was long and winding, and, in the beginning, although we had a sense for where we wanted to go, we needed to confirm that it was the right destination and identify the best way to get there,” explains Susan Lees, executive vice president and general counsel of Allstate. “We started with the premise that the law department was not fundamentally broken. There was no fire burning, so it was a great time to proactively perform a self assessment.”

First, the department looked at its three tenets of its “Law & Regulation Vision”: Extraordinary Service, Continuous Development and Vital Communities. For each of the three work streams, the department began by conducting an analysis to validate its hypotheses to ensure that they were focusing on the right destination.

The department conducted a work inventory/analysis to confirm how staff was spending time, the complexity of the work, and what level resources were performing that work; interviewed and surveyed clients; and gathered input from leaders in the law department.

“Gathering all of the background information and validation allowed us to make robust fact-based decisions about the opportunities to pursue and in what priority. It's a little like painting your house: If you don't prepare the surface correctly, the paint job might look good at first, but it won't last very long and will require substantial rework. That's why we focused on the upfront investment,” says Lees.

Overall, the department has learned that change takes longer than anticipated. Other lessons came about due to challenges in implementing innovative technology solutions, including integration of multiple systems, resisting the urge to overly customize applications and building a matter management system that would meet the needs of all of its practice groups.

“This initiative was all about the future, and it was driven by innovation,” says Lees. “That's one of the benefits of pursuing change at a time when the house is not on fire.”

—ERIN E. HARRISON

Above: Susan Lees, executive vice president and general counsel of Allstate

Contributed Photo

Altria: Richmond, Va.

By and large, law departments utilize e-billing to eliminate redundancies and bring about transparency to where their money goes. But such a program can also provide insight into data previously inaccessible or too cumbersome to track.

For many years, the Altria law department has required select outside counsel firms to provide annual diversity reports. Unfortunately, the process was manual and required each firm to submit an excel spreadsheet with over 300 different data points. Reporting and analyzing the data was a time consuming process for outside counsel as well as for company employees, explains Walter Arnold, manager of law administration at Altria.

To address these opportunities, the company's Diversity & Inclusion committee partnered with its e-billing vendor, TyMetrix, to automate the diversity reporting process by requiring the firms to provide diversity information directly into the e-billing system at the individual and firm-wide level. The objective was to simplify the existing process while delivering better information.

“Just like a lot of corporations, every year we reach out to law firms to find out how they staff pur matters from a diversity perspective, which has been a very laborious process,” Arnold says.

All outside firms handling Altria matters are now required to submit a diversity profile, which gives the law department transparency into how diverse its outside counsel pool is. In theory, representation from an increasingly diverse workforce means an additional perspective that may not have been there before.

“It is excellent information; we use to have conversations with our leadership and firm leadership to discuss how can we get more diverse representation because we believe that diverse views will garner more successful results,” Arnold says. “We know that a culturally-committed workplace is much better able to serve our needs and generate better results.”

While the law department wasn't sure how successful the program would be, Arnold's work with TyMetrix to establish a Web form where its outside counsel timekeepers would set up a profile. Every timekeeper does have a “choose not to respond” option to the diversity profile questions, but Arnold said the department has a 100 percent opt-in rate and about 90 percent of the forms are completed.

“This has exponentially increased our ability to manage diversity,” says Arnold. “If all corporations could manage diversity like this, it would do a lot to help grow diversity in the legal profession.”

—ERIN E. HARRISON

Above: Altria Legal Diversity & Inclusion Committee

Contributed Photo

Colgate-Palmolive Company: New York City

With close to 200 legal staff located in more than 30 offices around the world, Colgate-Palmolive legal department's information was siloed six years ago, stored in network share drives, local hard drives and emails, among other locations. Legal billing and invoice review were manual processes. The department was in need of an innovative solution that would help drive collaboration as well as efficiency, explains Larry Gianneschi, legal information and technology manager at Colgate-Palmolive Company.

Two years after Gianneschi came on board, the company's law department implemented a globally integrated technology platform that today includes matter management, e-billing, records management and IP management, but this was not achieved without a few hiccups. Indeed, the path toward innovation is not without obstacles.

When Colgate-Palmolive launched its enterprise legal management platform in 2010, Gianneschi says the endeavor was based on an unrealistic timeframe, with no marketing plan and little support from the IT department. But as the saying goes, if at first you don't succeed, try again. Uptake at that point was only 40 percent, and there was no formal training program. After revisiting what went wrong and making a few critical adjustments, two years later the department launched “version 2.0.” The law department strengthened its relationship with the IT department, which put them on a two-year plan that would make its HP Automony traffic “mission critical.”

Today, user adoption levels are at 65 percent globally and paper consumption has decreased significantly, particularly for the patent function with 86 percent less paper consumption.

“We’ve moved to a matter-centric environment. It allows inside counsel and outside counsel to talk to one another, streamlining the documents so that matter can be shared across all our 33 offices around the world,” says Gianneschi.

In addition, Colgate-Palmolive's global legal organization is currently undergoing a change management initiative in an effort to raise user adoption levels of their integrated platform, which includes matter management, e-billing, document management, records management and IP management.

“In less than four years, we have stored 300,000 documents and one million pieces of email including attachments in the document management system,” Gianneschi adds. “But this is just the beginning for us; we are looking to tie the records management system to the document management system to enable a policy-driven document lifecycle from cradle to grave.”

—ERIN E. HARRISON

Above: Larry Gianneschi, legal information and technology manager, Colgate-Palmolive Company

Contributed Photo

Intel Corporation: Santa Clara, Calif.

Innovation isn't always about technology; sometimes it's as simple as approaching a problem with a novel lens. Intel Corporation has made a name for itself as a semiconductor and microprocessor manufacturer, but when it came to innovation in the legal department, building a collaborative environment had priority over building a technology solution.

In the rapidly changing business ecosystem, ensuring that lawyers deliver the best quality legal advice based on collective experience can be a daunting challenge. Hectic business lives, disperate locations and diverse practice areas can make it difficult for lawyers to tap into the greater corporate knowledge base.

“We realized we needed to become more nimble and be able to quickly leverage our collective expertise, resources and knowledge across the entire department. Our most precious asset is our lawyers’ time. If we can make sure they can access the knowledge, information and resources they need quickly and easily, they can move faster and enable the business to move faster,” says Sandy Owen, legal operations director at Intel.

That realization drove Intel's initiative to develop and implement knowledge management technology that could consolidate its lawyers’ experience in an approachable way. The company says the platform has allowed them to capture, share and reuse knowledge in a way that was impossible across the multiple platforms in use prior.

While the project was an iterative process with multiple evolutions along the way, the platform now in use starts with the company's “Legal Portal.” There Intel's lawyers can find sample forms, up-to-date policies, best practices and educational materials customized for their needs. The platform also includes a microblog feature which supports social networking, and allows Intel attorneys to chat with colleagues who may be on the opposite side of the globe.

And the results have been positive. Owen says, “We have seen a tremendous increase in the exchange of information over the microblog. The drafting quality of contracts has become more consistent as vetted sample forms offer a safe starting point for our lawyers. Consistency in our contract clauses has also improved as there is now an established repository for our lawyers to draw from.”

—CHRIS DIMARCO

Above: Sandy Owen, legal operations director, Intel

Jones Lang LaSalle: Chicago

Real estate firm Jones Lang LaSalle (JLL) has never had a problem collecting data. However, actually being able to organize that data, especially from all 20 countries in which JLL operates, proved to be a different issue altogether.

“There was a lot of information, but it was not at all organized or in any single place you could see it,” says JLL General Counsel Mark J. Ohringer. “Whenever we wanted to try and figure out the full picture, we had to go to a bunch of different people in different countries and get different spreadsheets, which all were organized differently.”

For a legal department with roughly 80 lawyers, manually producing specialized reports needed for litigation, ethics and compliance became an immense burden. Thus, the JLL team decided to innovate, creating a system to have all data in one place, while still respecting local needs.

The result is a global integrated data mining program that collects information from various corporate functions and business units as well as contracted outside databases to identify and extrapolate patterns within litigation, compliance and other sectors of the business. Not just one quick fix, the program is a constantly evolving mechanism by which the JLL team identifies new problems, then builds a new solution directly into the data system.

By having all data centralized, Ohringer says, the company not only is able to more efficiently respond to emerging threats, but is able to take preventative measures to make sure all segments of the company are fully operational. Using an automated “cost of errors” report, JLL's legal team is able provide a numbers-based argument to business leaders when change is needed.

“We need to go fix the business group where that problem came from so it doesn't happen again,” Ohringer says. “But meanwhile, we’ve got operations all over the world, so if it happened in one place, it may well happen in others. So let's take that fix and globalize it.”

Being able to be more comfortable with our public disclosure, and being able to demonstrate the value to our shareholders, how we’re doing business and acting in their best interests, is behind all this.”

—ZACH WARREN

Above: Chicago-based members of Jones Lang LaSalle's global legal team

Contributed Photo

Lincoln Financial Group: Radnor, Penn.

The financial crisis of 2008 hit companies in the financial services industry hard. In the years since, financial companies have been working to cut budgets in every unit, including their legal departments. The law department of Lincoln Financial Group faced this new reality by looking to increase efficiency and align with business initiatives at the same time.

Executive Vice President and General Counsel Adam Ciongoli joined Lincoln during a time of great change, taking on the position after it had laid fallow for almost a year. Together with Reese Arrowsmith, a former management consultant, Ciongoli and his team worked to change the philosophy of the legal department, running it more like a business.

First, the legal department deployed a new outside counsel management program, called the Strategic Attorney Relationship program. This included cutting down the number of approved outside firms from 236 down to 27. “This gave us better leverage and better relationships with firms,” Ciongoli says. “If you shrink spend overall, but use the same firms, everyone who is getting less work will be happier with you if they know they are one of 25 firms instead of one of 250 firms.”

Additionally, Lincoln reorganized its litigation group, realizing that a majority of outside counsel spend had been coming from a few litigants, and bringing in attorneys who were better able to manage matters in a more efficient fashion.

Ciongoli and his team also used software solutions to improve efficiency. They upgraded their matter management system, implemented a legal hold tracking tool to automate the notification process and ensure compliance, and implemented a new tool to streamline processes related to the do not call list.

While members of the legal team had to make adjustments to the new paradigm—such as having to pay for their own subscriptions to the Wall Street Journal—the program was a success. The legal department was able to reinvest its savings into hiring more staff and bring in sanctions and recoveries that amounted to 27 percent of its operating budget.

—RICH STEEVES

Above: Adam Ciongoli, executive vice president and general counsel, Lincoln Financial Group

Contributed Photo

Rockwell Automation: Milwaukee, Wis.

Rockwell Automation's legal department consists of just 24 lawyers, yet the $6 billion organization works with a number of partners across the globe. In addition, the Rockwell Automation name is attached to a number of projects headed by third parties, where even one bribery or cybersecurity failure could mean a substantial reputation loss for the company.

Sound like a challenge? It kept Rebecca “Riv” Goldman, vice president, commercial law at Rockwell Automation, up at night.

“I was counting on our 20,000 employees around the globe to be watching for news about bad things,” Goldman says. “Oftentimes they did, but it didn't seem like the best solution.”

Rockwell Automation needed a solution to keep track of their employees and third party partners. However, after they realized that “we’re basically doing the same thing on the anticorruption standpoint and from the information security standpoint,” the team couldn't find one outside solution that would meet all of their needs.

So, as a result, they decided to get innovative: Rockwell Automation combined offerings from Thomson Reuters and Hiperos into one unique, automated system that would serve both purposes. As the first step, Thomson Reuters’ World Check provides continuous media, litigation and blacklist monitoring, assessing the company's level of risk. Then, Hiperos data analytics, powered by questionnaires completed by Rockwell Automation's partners, allows the company to constantly track its ongoing relationships.

Through the integrated tool, Rockwell Automation has streamlined the system to track who they have trained and to store acknowledgements of policy. In addition, every night, all third parties are re-screened with up-to-date information.

“We didn't change our policies; we already had these policies in place. We had a laborious process to abide by that policy,” Goldman says. “Success meant that we were making it easier for everyone. Our own record keeping is so much easier. And we’re doing this, even with the implementation costs, for no more than we were spending for all of these efforts previously.”

—ZACH WARREN

Above: Rockwell Automation's Legal Department

Contributed Photo

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