Generating Increased Value through Turbulent Times (Peter Doolin, GCL Consulting)

CLANZ 2009 Generating increased value through turbulent times

Content Workflow management: Freeing up time for strategic projects and priority initiatives Cost reductions: Measures to accelerate external legal cost reductions KPI’s: 3 key performance indicators to capture the contribution of the legal department in 2009/2010

Surveys Most pressing challenge for Legal Department is workload / time pressure (ACLA & CCCA) Median hours worked is 45 – 50 per week, but 50 – 60 for smaller departments

Demand Forecasting No quantification of demand by Specialization / area of law Complexity # of hours Law department vs. law firm Business unit or sub-group

Demand Forecasting Given lack of alignment with business strategy, the Legal Department is most likely to be a reactive, operational support contributor It is impossible to beat expectations because you are too often notified late and given partial documentation

Work Flow – The Dept Workloads and Workflows in the Legal Department Changes to configuration of work Balancing strategic and operational work Service level standards and protocols Effect on use of external counsel

Work Flow- The Users Assessing the need for legal services more effectively-nature and timing Preparing a proper brief to legal advisors-internal and or external Improved management of legal projects/transactions instructions- timetable; budget constraints; other relevant factors Accessing organisation’s legal knowledgebase

Work Loads Structural and operating issues can add 20% to workload Never caught up, but always do the essential Feel pressure constantly to satisfy users

Work Loads Service level agreement (by Business Unit) Define demand Designate reduced number of users Positioning Statement for Legal Dept Reduced meeting times and operational support Explicit turnaround standards

Interruptions Interruptions consume 28% of the day for e-mail, calls, visitors Functioning IQ drops 10% when distracted by calls and e-mails Takes 15 minutes to resume task after calls and e-mail Managing time with more discipline generates  1 hour of a availability each day

Solutions Time management practices Workflow practices Service Level Agreements # of law firms (2 to 3 for 90% of all work) Partnering agreements with firms Capable legal assistant

Precedents, document management, legal research capabilities User seminars on how best to use the department A legal “wiki” Regular meetings with users Seat at the executive table Load-balancing meetings in the legal department Dedicated resources for professional and administrative management

Conclusion Managing workflow will address the workload issues

Reducing Legal Spend 1. Demand forecasting- start point Manage what the legal department delivers A key input to capacity and resource planning The base of the business case Drives positioning, structure and on-going measurement decisions Provide basis for negotiation with law firms :

2. Seven key strategies Insourcing and in-take control Convergence and competition Matching complexity and staffing of files Case and matter budgets Alternative pricing, incentives for success and efficiency Management of disbursements Administrative streamlining

a) Insourcing and Intake Control Assume 600 hours of legal work to in source Service level agreements /when to call your lawyer Relationship managers Measure backlogs

b) Convergence For every complexity and level of work “ Preferred” list is not optional

c) Matching Complexity and Staffing of Files Delegation profiles based on complexity Get the work to the right level

d) Case & Matter Budgets Task-based budgets for matters requiring 25 hours or more

e) Pricing 3 years (or more) Escalation controlled Volume discounts (measured in hours)

f) Eliminate Disbursements All office-related disbursements

g) Other Considerations Electronic billing and payment Annual and 3-year volumes Speed of payment “ Soft” considerations

3. Renewing Agreements Poor staffing in response to the RFP specifications Proliferation (law firm teams too big) Weighted rates outside the comfort zone for the region Multi-location law firms have strategic advantage

Renewing Agreements Demand forecast a pre-requisite – 5 variables Review team mix to re-fresh delegation Diligence on alternative firms Competition or not?

Renewing Agreements Target volumes over time Incentives for efficiency and convergence Fixed Price Weighted rate  volume for 36 months  number of months No adjustments to monthly payments if annual deviation is 10% or less from planned volumes

Renewing Agreements Weighted hourly rates – actual vs. target Reports from law firms Reports to law firms Quarterly and annual meetings

Key Performance Indicators Service delivery Effectiveness Efficiency

KPIs Why have them? What are they designed to measure? What are they intended to achieve? Who are they for?

Service delivery Accessibility KPI: The extent to which users can readily access legal counsel (in person, by phone or email) and the extent to which they find them easy to engage with ( measured on a scale of 1-5) Turnaround/Deadlines KPI: The extent to which users receive all forms of legal services in a timely manner and including the extent to which agreed deadlines are met ( measured on a scale of 1-5) Teamwork and morale KPI: The expression of overall satisfaction with work life balance by members of the legal team (measured annually using a scale of 1-5 and compared to the corporate baseline)

Effectiveness Results achieved by legal team KPI: the extent to which planned results /outcomes are met by the legal team having regard to the following: Contribution to development of strategic goals Delivering legal and advisory services that contribute to strategic projects The extent to which the legal team is regarded by the users as proactively raising legal issues Ease of comprehension and clarity of advice provided by the legal team

Effectiveness The extent to which the legal team is seen as adding value to the operations of the organisation (All measured on a scale of 1-5 to create a single index used as the KPI )

Efficiency Operational Budget KPI: The legal team operates within its corporate budget Measured on a 3 point scale where: i. meets at 1 ii. beats by 5% at 2 iii. beats by 10% or more at 3 iv. no points for exceeds budget KPI: The extent of operating within the approved budget of the department

Efficiency External Legal Budget . The accuracy of the prediction of the organisation’s external spend . Success in managing the budgeted spend for all external providers KPI: The extent to which the legal team is able to manage a reduction on an annualised basis in the budgeted spend for all external providers (Measured on a 3 point scale )

Measurement of KPI's Design survey/questionnaire Self assess Review by internal clients /external advisors Objective independent review Analyse findings Process of continual improvement

Generating Increased Value through Turbulent Times (Peter Doolin, GCL Consulting)

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Generating Increased Value through Turbulent Times (Peter Doolin, GCL Consulting)