CLANZ 2009CLANZ 2009

Generating increased value Generating increased value through turbulent times through turbulent times

ContentContent

Workflow management: Freeing up Workflow management: Freeing up time for strategic projects and time for strategic projects and priority initiativespriority initiatives

Cost reductions: Measures to Cost reductions: Measures to accelerate external legal cost accelerate external legal cost reductionsreductions

KPI’s: 3 key performance indicators KPI’s: 3 key performance indicators to capture the contribution of the to capture the contribution of the legal department in 2009/2010legal department in 2009/2010

SurveysSurveys

Most pressing challenge for Legal Most pressing challenge for Legal Department is workload / time Department is workload / time pressure (ACLA & CCCA)pressure (ACLA & CCCA)

Median hours worked is 45 – 50 Median hours worked is 45 – 50 per week, but 50 – 60 for smaller per week, but 50 – 60 for smaller departmentsdepartments

Demand ForecastingDemand Forecasting

No quantification of demand byNo quantification of demand by Specialization / area of lawSpecialization / area of law ComplexityComplexity # of hours# of hours Law department vs. law firmLaw department vs. law firm Business unit or sub-groupBusiness unit or sub-group

Demand ForecastingDemand Forecasting

Given lack of alignment with Given lack of alignment with business strategy, the Legal business strategy, the Legal Department is most Department is most likely to be a reactive, operational likely to be a reactive, operational support contributorsupport contributor

It is impossible to beat expectations It is impossible to beat expectations because you are too often notified because you are too often notified late and given partial documentationlate and given partial documentation

Work Flow – The DeptWork Flow – The Dept

Workloads and Workflows in the Workloads and Workflows in the Legal DepartmentLegal Department

Changes to configuration of workChanges to configuration of work Balancing strategic and operational Balancing strategic and operational

workwork Service level standards and Service level standards and

protocolsprotocols Effect on use of external counselEffect on use of external counsel

Work Flow- The UsersWork Flow- The Users

Assessing the need for legal services more Assessing the need for legal services more effectively-nature and timingeffectively-nature and timing

Preparing a proper brief to legal advisors-Preparing a proper brief to legal advisors-internal and or externalinternal and or external

Improved management of legal Improved management of legal projects/transactions instructions- projects/transactions instructions- timetable; budget constraints; other timetable; budget constraints; other relevant factorsrelevant factors

Accessing organisation’s legal Accessing organisation’s legal knowledgebaseknowledgebase

Work LoadsWork Loads

Structural and operating Structural and operating issues can add 20% to issues can add 20% to workloadworkload Never caught up, but always do the Never caught up, but always do the

essentialessential Feel pressure constantly to satisfy usersFeel pressure constantly to satisfy users

Work LoadsWork Loads

Service level agreement (by Service level agreement (by Business Unit)Business Unit) Define demandDefine demand Designate reduced number of usersDesignate reduced number of users Positioning Statement for Legal DeptPositioning Statement for Legal Dept Reduced meeting times and operational Reduced meeting times and operational

supportsupport Explicit turnaround standardsExplicit turnaround standards

InterruptionsInterruptions

Interruptions consume 28% Interruptions consume 28% of the day for e-mail, calls, visitorsof the day for e-mail, calls, visitors

Functioning IQ drops 10% when Functioning IQ drops 10% when distracted by calls and e-mailsdistracted by calls and e-mails

Takes 15 minutes to resume task after Takes 15 minutes to resume task after calls and e-mailcalls and e-mail

Managing time with more discipline Managing time with more discipline generates generates 1 hour of a availability each 1 hour of a availability each dayday

SolutionsSolutions

Time management practicesTime management practices Workflow practicesWorkflow practices Service Level AgreementsService Level Agreements # of law firms (2 to 3 for 90% of all # of law firms (2 to 3 for 90% of all

work)work) Partnering agreements with firmsPartnering agreements with firms Capable legal assistantCapable legal assistant

Precedents, document Precedents, document management, legal research capabilitiesmanagement, legal research capabilities

User seminars on how best to use the User seminars on how best to use the departmentdepartment

A legal “wiki” Regular meetings with usersA legal “wiki” Regular meetings with users Seat at the executive tableSeat at the executive table Load-balancing meetings in the Load-balancing meetings in the

legal departmentlegal department Dedicated resources for professional and Dedicated resources for professional and

administrative managementadministrative management

ConclusionConclusion

Managing workflow will Managing workflow will address the workload issuesaddress the workload issues

Reducing Legal SpendReducing Legal Spend

1. Demand forecasting- start point1. Demand forecasting- start point Manage what the legal department Manage what the legal department

deliversdelivers A key input to capacity and resource A key input to capacity and resource

planningplanning The base of the business caseThe base of the business case Drives positioning, structure and on-Drives positioning, structure and on-

going measurement decisions going measurement decisions Provide basis for negotiation with law Provide basis for negotiation with law

firmsfirms

:

2. 2. Seven key strategiesSeven key strategies

a.a. Insourcing and in-take controlInsourcing and in-take controlb.b. Convergence and competitionConvergence and competitionc.c. Matching complexity and staffing of Matching complexity and staffing of

filesfilesd.d. Case and matter budgetsCase and matter budgetse.e. Alternative pricing, incentives for Alternative pricing, incentives for

success and efficiencysuccess and efficiencyf.f. Management of disbursementsManagement of disbursementsg.g. Administrative streamliningAdministrative streamlining

a) Insourcing and a) Insourcing and Intake ControlIntake Control

•Assume 600 hours of legal work to in source•Service level agreements /when to call your lawyer•Relationship managers•Measure backlogs

b) Convergence b) Convergence

For every complexity and level of For every complexity and level of workwork

““Preferred” list is not optionalPreferred” list is not optional

c) Matching Complexity c) Matching Complexity and Staffing of Filesand Staffing of Files

Delegation profiles based onDelegation profiles based oncomplexitycomplexity

Get the work to the right levelGet the work to the right level

d) Case & Matter d) Case & Matter BudgetsBudgets

Task-based budgets for matters Task-based budgets for matters requiring 25 hours or morerequiring 25 hours or more

e) Pricinge) Pricing

3 years (or more)3 years (or more) Escalation controlledEscalation controlled Volume discounts (measured in Volume discounts (measured in

hours)hours)

f) Eliminate f) Eliminate DisbursementsDisbursements

All office-related disbursementsAll office-related disbursements

g) Other Considerationsg) Other Considerations

Electronic billing and paymentElectronic billing and payment Annual and 3-year volumesAnnual and 3-year volumes Speed of paymentSpeed of payment ““Soft” considerationsSoft” considerations

3. Renewing Agreements3. Renewing Agreements

Poor staffing in response to the Poor staffing in response to the RFP specificationsRFP specifications

Proliferation Proliferation (law firm teams too big)(law firm teams too big)

Weighted rates outside the comfort Weighted rates outside the comfort zone for the regionzone for the region

Multi-location law firms have Multi-location law firms have strategic advantagestrategic advantage

Renewing AgreementsRenewing Agreements

Demand forecast a pre-requisite – 5 Demand forecast a pre-requisite – 5 variablesvariables

Review team mix to re-fresh Review team mix to re-fresh delegationdelegation

Diligence on alternative firmsDiligence on alternative firms Competition or not?Competition or not?

Renewing AgreementsRenewing Agreements

Target volumes over timeTarget volumes over time Incentives for efficiency and Incentives for efficiency and

convergence convergence Fixed Price Fixed Price

Weighted rate Weighted rate volume for 36 volume for 36 months months number of months number of months

No adjustments to monthly payments if No adjustments to monthly payments if annual deviation is 10% or less from annual deviation is 10% or less from planned volumesplanned volumes

Renewing AgreementsRenewing Agreements

Weighted hourly rates –Weighted hourly rates –actual vs. targetactual vs. target

Reports from law firmsReports from law firms Reports to law firmsReports to law firms Quarterly and annual meetingsQuarterly and annual meetings

Key Performance Key Performance IndicatorsIndicators

Service deliveryService delivery EffectivenessEffectiveness Efficiency Efficiency

KPIsKPIs

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

Service deliveryService delivery AccessibilityAccessibilityKPI: The extent to which users can readily access legal KPI: The extent to which users can readily access legal

counsel (in person, by phone or email) and the extent counsel (in person, by phone or email) and the extent to which they find them easy to engage with to which they find them easy to engage with ((measured on a scale of 1-5)measured on a scale of 1-5)

Turnaround/Deadlines Turnaround/Deadlines KPI: The extent to which users receive all forms of legal KPI: The extent to which users receive all forms of legal

services in a timely manner and including the extent services in a timely manner and including the extent to which agreed deadlines are met (to which agreed deadlines are met (measured on a measured on a scale of 1-5)scale of 1-5)

Teamwork and moraleTeamwork and moraleKPI: The expression of overall satisfaction with work life KPI: The expression of overall satisfaction with work life

balance by members of the legal teambalance by members of the legal team(measured annually using a scale of 1-5 and compared (measured annually using a scale of 1-5 and compared

to the corporate baseline)to the corporate baseline)

EffectivenessEffectiveness

Results achieved by legal team Results achieved by legal team

KPI: the extent to which planned results /outcomes KPI: the extent to which planned results /outcomes are met by the legal team having regard to the are met by the legal team having regard to the following:following: Contribution to development of strategic goalsContribution to development of strategic goals Delivering legal and advisory services that Delivering legal and advisory services that

contribute to strategic projectscontribute to strategic projects The extent to which the legal team is regarded The extent to which the legal team is regarded

by the users as proactively raising legal issuesby the users as proactively raising legal issues Ease of comprehension and clarity of advice Ease of comprehension and clarity of advice

provided by the legal teamprovided by the legal team

EffectivenessEffectiveness The extent to which the legal team is seen as The extent to which the legal team is seen as

adding value to the operations of the adding value to the operations of the organisationorganisation

(All (All measured on a scale of 1-5 to create a single measured on a scale of 1-5 to create a single index used as the KPI )index used as the KPI )

Efficiency Efficiency

Operational BudgetOperational BudgetKPI: The legal team operates within its KPI: The legal team operates within its

corporate budgetcorporate budgetMeasured on a 3 point scale where:Measured on a 3 point scale where:i. meets at 1i. meets at 1ii. beats by 5% at 2ii. beats by 5% at 2iii. beats by 10% or more at 3iii. beats by 10% or more at 3iv. no points for exceeds budgetiv. no points for exceeds budgetKPI: The extent of operating within the KPI: The extent of operating within the

approved budget of the departmentapproved budget of the department

EfficiencyEfficiency

External Legal BudgetExternal Legal Budget . The accuracy of the prediction of the . The accuracy of the prediction of the

organisation’s external spend organisation’s external spend

. Success in managing the budgeted spend for . Success in managing the budgeted spend for all external providers all external providers

KPI: The extent to which the legal team is able to KPI: The extent to which the legal team is able to manage a reduction on an annualised basis in the manage a reduction on an annualised basis in the budgeted spend for all external providersbudgeted spend for all external providers

(Measured on a 3 point scale(Measured on a 3 point scale))

Measurement of KPI'sMeasurement of KPI's

Design survey/questionnaire Design survey/questionnaire Self assessSelf assess Review by internal clients /external Review by internal clients /external

advisorsadvisors Objective independent review Objective independent review Analyse findings Analyse findings Process of continual improvementProcess of continual improvement