Legal Operations Professionals – The New Change Agents (Live Post)
This is a live post from the Bloomberg Big Law Summit. Please excuse any typos or errors in how I capture proceedings.
1:00 pm Panel Session: The New Change Agents
A decade ago or so, almost nobody would have looked at legal operations as a hot career path, yet today there are an increasing number of corporations that have been hiring specialists to manage outside vendors and contracts, implement new technology and otherwise drive efficiencies and contain costs. A panel of in-house operations specialists will discuss the latest and best techniques they are using to effectively do their jobs.
Moderated by: Amar D. Sarwal
Cliff Dutton, SVP & Director, Strategies and eDiscovery, AIG
Robert Harchut, Vice President & Associate General Counsel, GlaxoSmithKline
Adam Storch, Chief of Staff and Chief Operating Officer – Legal and Public Affairs, Marsh & McLennan Companies
AIG – Legal operations four areas. First, manage 1200 law firms over multiple panels. Second, non-law firm management (ediscovery, court reporters, experts, etc.). Third, process and information systems. And fourth, is strategy, which means AFA and ADR, in part.
Glaxo – Focuses more on external part of legal operations; a separate group focuses on internal topics.
Marsh – In job 9 months, previously five years in legal ops at SEC.
Managing Outside Counsel Relationships
Data Security. In the past, law firms could not be viewed as “vendors” and so were not scrutinized. Now, for purposes of data security, clients now treat law firms same as vendors. Data security is not a one-time event – it’s an ongoing process. There is an increasing focus on data security standards.
Appropriate Fee Arrangements (AFA). New Glaxo GC mandated in 2008 that all outside legal engagements be priced on value basis. Glaxo uses reverse auctions to make sure it gets competitive pricing. Auction is matter specific, with a template for each type of matter. That is sent to law firms, which respond to qualitative questions (re, for example, lawyers, relationships with judges, suggested strategy, and diversity of team). The law firms also provide their assumptions about the matter. If necessary, Glaxo issues uniform assumptions prior to the digital reverse auction. The auction has multiple steps. The Glaxo managing attorney receives summary of qualitative factors and results of actuion. Glaxo does not always choose lowest price. Entire price can take as little as five days.
AIG law department works with procurement to select outside counsel. Company measures performance, collects data, and performs analytics to confirm it gets the best outcomes with the best value.
There is a lot of emphasis by the panelists on data analytics, especially on figuring out the cost per legal task (not the “garbage” ABA codes).
Disaggregation and Unbundling.
Marsh – this has impact not only on outside counsel but on our workforce. Notes that legal process outsourcing (LPO) can offer labor cost arbitrage but focuses more on tech and best practices.
AIG – analyze the process to see what resources best matches the task. Goal is to give the right solution and tools to the employees making legal decisions, whether a claims adjustment or in-house lawyer. We have education around alternatives and efficiencies.
Efficiency, value, quality, acquire better data for better decisions.
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