We are pressured to do more with less,” says Stephanie Corey, legal chief of staff at Flextronics.
That is the burden taken on by legal department operations (LDO) professionals around the country, as they seek to drive down costs and increase efficiency in their legal departments, leveraging people, processes and technology to run their departments more like business units.
“A few years ago, CFOs and CEOs started taking note of legal budgets. Fifteen years ago, we could spend what we wanted, but that has shifted quickly,” she says. “Now we are tasked with reducing overall budgets, especially outside counsel spend.”
With that in mind, legal department operations teams must strive to be innovative, taking a look at how they do business—and doing it better.
To drive innovation, LDO professionals focus on three things: people, processes and technology.
“Those are the equilateral triangle,” says Lisa Konie, senior director of legal operations at Adobe Systems, Inc. “Each leg is critical for the foundation, and you have to think broadly across those three elements. Can we solve a problem by changing a process? Sometimes there is an easier way to do things. If the processes are locked down, we look at technology. Can we automate? Can we use a tool or solution?”
If there isn't a tech solution, Konie says, you can look at people next, perhaps looking for different people, maybe with different skill sets. Though adding new personnel is not ideal from a headcount perspective, sometimes you can find savings bringing in, say, an IP expert, so you don't need to send all of your IP work to an outside firm.
The key in all of it, Konie explains, is to “communicate over and over, to make people part of the process instead of telling them what they need to do differently.”
At Flextronics, the legal department uses software solutions for e-billing and matter management, but Corey would like to see more law firms similarly leverage technology to improve their own processes and drive effiicieny.
“We are trying to get firms to take baby steps. Most big firms use software for e-billing, but we’d love to see more specific analysis and line-item details,” she says. “We want them to analyze their own spend, and getting them to do so is a real challenge. It seems like they are poorly trained in law school to manage budgets.”
While legal department operations professionals have helped their departments become more innovative, Corey has not seen the same growth in most law firms. “Law firms need to be more innovative. The tech is available, but firms seem to dig in their heels and don't want to implement that technology,” she says. She would like to see more transparency from firms, with financial reporting data and proactive metrics and reports. “Firms need to come to the realization that transparency is good for them and for their relationships,” she explains.
Both Corey and Konie note that one of the most important initiatives they’ve undertaken from an operations perspective is to decrease the number of firms they use. For Corey, that has helped the bottom line, but also improved realtionships with firms that made the cut.
“When we reduced the number of firms, we ended up with better partnerships with those firms that became preferred vendors,” she explains. She and her team took a closer look at data from those firms, looking at blended rates, making sure they were accurately calculated. Her team also made decisions about when to use smaller firms as well as deciding when it was appropriate to hire a subject-matter expert in house rather than continuing to spend a lot of money on outside counsel.
In addition to focusing on spend, Corey also takes a close look at diversity in the firms that Flextronics uses. When the legal department looks to hire a firm, it asks diversity questions, seeking specific data as to who is working on what matter—and at what level. “We are looking at diversity among partners, from managing partners to associates and all the way down,” she says.
Both Adobe and Flextronics have implemented initiatives that have successfully brought down costs and improved efficiency.
At Adobe, Konie's team has worked on creating a center of excellence, centralizing work across departments and improving turnaround time. They have also worked on convergence exercises.
Corey came to Flextronics from Hewlett-Packard. HP has a team of over 1000 in-house lawyers and boasted an operations team of 90 employees. When the Flextronics general counsel, who had also been at HP, brought Corey on board, she was given the task of running the legal department more like a business, mirroring some of what was done at HP. Now, her team consists of a half-dozen direct reports, as well as support staff in India and liaisons with human resources and information technology. She says that her team is looking to hire someone whose sole responsibility will be managing outside counsel.
Still, even with a smaller staff, Corey is able to implement initiatives to create specific billing guidelines for outside counsel. They are also working on using more sophisticated methods for evaluating firms, looking at the top 20 firms they use, focusing on five per quarter, and delving into metrics about quality, timeliness and more. This will result in feedback meetings with those firms. Corey says she also encourages those firms to give her feedback about Flextronics’ inside team in order to improve relationships.
All for one
One of the most impactful initiatives undertaken by many legal operations officers sits not inside their legal departments, but rather extends outward. Like-minded legal ops professionals around the country have banded together in regional groups, sharing information and success stories to help drive efficiency and standardize practices.
“One of the biggest benefits of the organization is that we are not reinventing the wheel. When you have companies that have gone through the same issues and who are using the same technology, you can get a lot of wins off of understanding what other folks are doing,” explains Konie. The members of the organization share best practices and talk about vendors and technology, collaborating to help each other through pain points.
One initiative of the LDO groups, according to Corey, is to increase standardization across companies. “We have a lot of standardization projects, such as creating e-billing guidelines and signature policies,” she says. “We want to see more standardizations in working with firms, and they should be aware of that.”
Since some legal operations teams are more mature in certain areas, such as e-billing, than others, these organizations help spread the wealth of knowledge, with LDO officers who have had success in one area passing that information along to others and seeking wisdom about their own areas of weakness.
It's this collaboration that will drive legal operations professionals in the future and allow them to increase efficiency in their own law departments while helping standardize matters, which will in turn help law firm, too. The experience has proved invaluable, at least for Konie, who says, “It's hard to imagine doing what I do today if not for this group.” It's certain she speaks for many of her colleagues in that regard as well.