Utilizing Technology To Make The Legal Department The Best-Run Function In The Corporation

Friday, October 18, 2013 - 09:52

It wasn’t so long ago that the office of the general counsel and the corporate legal department were a bit of a mystery to the average employee working at America’s leading corporations. Who they were, what they did, when to engage with them, and what impact they had on the business were only known by a portion of the corporate staff. As a leading provider of enterprise legal management (ELM) solutions, Mitratech has been privileged to partner with America’s leading corporate legal and compliance teams, and we have witnessed an evolution in the general counsel’s office over the past 25 years.

Corporate legal departments have increasingly transformed from a reactive group, brought in only when things go wrong, to a strategic group integrated as a true business partner in both operations and change management.

Over the past decade, and in particular since the recession, there has been a power shift to the GC from outside counsel, and the general counsel’s role in the company has expanded tremendously. The legal department is being asked to act as a change agent; GCs are being asked to predict risk, to quickly adjust to new regulations, and to redefine the relationships with outside law firms.

At the same time, we’ve seen the emergence of a buyer’s market for legal services with, frankly, an oversupply of legal hours. In this environment, GCs have the ability to redefine the relationship with their outside counsel at precisely the same time that they are being asked to provide the visibility and predictability typically associated with other business units within the corporation. All of this means that the GC’s office, not the law firm, is leading the way with technology to drive efficiency, manage change, gain visibility and manage risk. Why?

What the legal department manages is increasingly material to the success of the broader organization. There seems to be ever-increasing compliance risk, legal risk and IP to manage. On the compliance side alone, automated processes are absolutely necessary to keep track of the changing regulatory environment ushered in by SOX, HIPAA, the Affordable Care Act and hundreds of other state, local and federal regulations that are changing the business environment on a daily basis. Improper management of compliance needs results in significant business exposure. On the litigation side, IP litigation has increased tenfold in the last ten years. All told, this means that how the legal department manages its risk exposure can make a difference of millions, and even billions, of dollars to the company. The stakes are very high.

Corporate legal departments are being asked to manage this dramatic increase in risk and compliance without the corresponding increase in budgets. Legal departments today have to act in much the same way as other cost centers, doing more with less while increasing visibility and predictability across the department.

Mitratech recently held discussions with key members of three of America’s leading legal departments that have adapted to these changing dynamics by proactively transforming their business practices to drive tremendous corporate-wide value. These companies have different sets of goals and face different challenges, but they all utilize legal technology to more effectively build and manage business process, increase collaboration across the corporation, and analyze their practices and results to make data-driven decisions. While software is an enabler of this expanded and increasingly strategic role, allowing in-house counsel to work more closely with their colleagues across the business, it does not by itself create the change. Visionary leaders within each of these corporations have leveraged the technology to create these results. What is amazing is how they have helped their respective departments make the most of their technology investment by expanding the ELM platform to fit their unique organizational needs – increasing process consistency and productivity to ultimately become one of best-run functions within the corporation.

The Williams Companies, Inc. - Reducing Risk Across The Organization

Danette Gallatin has a challenging job. As the legal department business manager at The Williams Companies, Inc., she is responsible for operations of the legal department and assists with managing the operations of other groups reporting to the general counsel, including Government Affairs, Records and Information Management, and the Ethics and Compliance groups. She spends the majority of her time focused on technical systems, determining how to leverage technology to automate processes, increase collaboration and solve new business challenges. Williams is a very sophisticated legal department from a systems perspective, and they have been using matter management for many years. When their legacy matter management system was acquired by another software company, it became clear that the roadmap for the product was limited and that it would not continue to support the type of innovation and scalability that they had come to expect in a matter management system.

Williams eventually selected TeamConnect for its new enterprise legal management platform. The end-to-end platform was an exciting and intriguing approach – the team realized that over the long term, other groups within the organization using disparate purchased and homegrown systems could also use TeamConnect. The use of a single platform by multiple groups created efficiencies, reduced costs and contributed to overall strategic organization objectives.

With 33 attorneys, thousands of legal matters, and hundreds of these matters open at any one time, TeamConnect provided the flexibility Williams needed to automate its existing operational workflows.

One of the most important ways in which TeamConnect has allowed Williams to transform the legal department and mitigate the organization’s overall risk is through the development of an audit letter reporting tool. By creating an audit letter reporting tool, the department was able to automate part of the reporting process to the independent auditors related to contingent liabilities. Once certain matter information has been entered, the attorney does not have to think about what matters are considered as candidates for external reporting purposes: the system takes care of it. The tool identifies potential matters for inclusion in the report to the independent auditors and creates a schedule of those matters within TeamConnect. The appropriate attorneys are notified by TeamConnect that they have matters that are candidates for inclusion in the letter, and they determine if the matter should be included in the report. This was previously a completely manual process at Williams, and the automated process and results are impressive. This would not have been possible in a system that lacked ad hoc reporting capabilities.

For all the flexibility and functionality that TeamConnect provides, the most important factor to Danette may be the partnership that Williams and Mitratech have been able to forge together over time.

Chevron - Predictive Decision Making Through Data Analytics

Phyllis Swanson is a business analyst within the legal IT at one of the most sophisticated legal departments in the country. Her primary responsibilities include configuration and support of TeamConnect, Chevron’s enterprise legal management platform for matter and spend management. She is responsible for enhancement design, administration, consulting and training to ensure usage of the system. In order to be successful in her role, she needs to fully understand the corporate legal business and communicate the value of technology to the department at large.

Chevron did not always use TeamConnect. Previously they utilized a stand-alone e-billing point solution and a home-grown matter management system. When data volumes exceeded the technical capabilities of their previous e-billing platform, Chevron had to decide whether to move to a new e-billing system that contained limited matter management capabilities or replace both systems with an enterprise legal management solution. After a thorough investigation, TeamConnect was selected to replace both.

The ease of extracting data and information to make informed and predictive decisions is a key objective of most legal departments, including Chevron. TeamConnect is critical for reporting legal spend status of the various business units and significant litigation reporting, which is used by the executive team. Data captured in TeamConnect allows legal to support and promote common departmental processes and proven best practices driven by analytics, such as the litigation strategy. In line with Chevron’s objectives, the legal IT team utilized the data within TeamConnect to create an Outside Counsel Assessment Model designed to select the firms that will provide Chevron with the best results.

In this application, counsel evaluations were built into the matter management system so attorneys can rate their experiences while the information for any particular case is still fresh in their minds. Phyllis helped design a simple three-page wizard that includes eight to ten survey questions, a 0-5 rating criterion for each question, and room for overall comments. The flexibility of TeamConnect’s rule engine allows the survey to vary depending on matter type, and in general at least one rating needs to be done per matter. Although still in its infancy, Chevron has now collected close to 500 evaluations, nearing the critical mass needed to build the analytics required to make informed decisions. Beyond just selecting the law firm, Chevron is now expanding these ratings to individual timekeepers at its outside counsel firms. At direction of the general counsel, staff attorneys now must consider three attorneys before making a selection and document the reasoning behind the selection. This encourages attorneys to consider whom they are using and why. The process will be a key driver not only to reducing expenses but also, more importantly, to improving matter outcomes.

One of the key differentiators of TeamConnect is its ability to integrate with additional solutions used by the corporation, thereby increasing the volume of data available for analysis. Chevron has taken advantage of this by integrating with its intellectual property system. IP is a high-volume matter type at Chevron, and many IP matters have outside counsel associated with them. Prior to TeamConnect, the legal staff had to manually create a matter to sync to their e-billing system, but no true matter management was done; it was really just a way to include those vendors in the e-billing solution. Because the process was manual, data quality was horrendous: fields were not available to capture specific key pieces of data, and the staff would have to create sophisticated naming conventions to keep track of records. With TeamConnect, matters are automatically created every night from the IP system information with vendor and billing information automatically assigned, minimizing the maintenance while providing metrics on IP legal spend.

Phyllis sees a number of areas where the technology can be leveraged to meet additional legal department needs. Areas such as Medicare reporting, additional decision analytics, best practice sharing across departments, workflow process, and mass data input and update tools are all items on her radar for the future to implement through the TeamConnect platform.

AIG - Simplifying The Systems Landscape For A Global Organization

Brian McGovern manages process and information for one of the most sophisticated legal ecosystems in the world. As senior vice president and legal chief data officer in the Legal Operations Center at AIG, his mission is to support and improve legal processes and technologies and to be the centralized source of critical business data and actionable insights regarding legal operations and management. That would be a challenging position at any Fortune 500 company, but AIG is much more than a normal company, and insurance does not have the same matter and spend management needs as other industries. So what is different about the insurance industry?

Mitratech conducted a recent survey with 76 legal departments and found the following:

  • Legal departments at insurance companies deal with a much higher volume of litigation, much of which is repeatable and originates within claims.
  • Vast amounts of data are already collected in systems, but they are not rolled up and presented in a consumable format because these systems are disparate from each other, making report creation difficult and data discrepancies rampant.
  • Legal departments at insurance companies have a higher amount of interaction with other parts of the organization such as claims, subrogation, investigations and compliance areas, and legal develops standard operating procedures to manage these interactions. This makes it critical that technology solutions are flexible enough to automate these best practices, rather than requiring a change to the underlying process itself.

Brian has all of these challenges amplified because of the size, scale and international history of AIG as an insurer. AIG employs over 62,000 people in more than 90 countries, and their portfolio includes a diverse offering of insurance and investment products. AIG did not grow to this size overnight; rather, this is a long-term growth story that took place over many decades. As such, multiple systems were historically used by the many different legal groups globally without a clear central strategy. Disparate systems led to issues in reporting, especially as it relates to legal spend. Reporting was fragmented and inconsistent, which created issues in making optimal decisions to strategic business questions. Brian and the AIG team have taken a major step to addressing these challenges by selecting TeamConnect to manage AIG spend globally. AIG had used TeamConnect for years to manage their corporate needs, but the platform was not expanded to the other internal and claims groups. After a thorough evaluation, the team determined that TeamConnect was flexible and scalable enough to handle the expansion into claims legal management. The ultimate goal for AIG is to be able to manage all global legal spend through the unified platform.

Once this expansion is complete, AIG will have enhanced collaboration across legal groups and greatly improved data management across the enterprise. This will allow the legal department to provide more depth for decision analytics and further enhance the overall AIG data program.

AIG can now increase collaboration across global legal units and between claims and staff counsel, as well as focus on reducing costs through the use of data and analytics, making it a prime example of a legal department leveraging technology to deliver on key enterprise objectives.

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Danette, Phyllis and Brian are all leaders within their respective organizations. Each of them would be successful with or without Mitratech, but we are proud to be working as their business partners. Leveraging TeamConnect technology has enabled them to make their respective legal organization one of the best-run functions within the corporation. Mitratech is honored to continue driving material results for our client organizations and to continue delivering innovative technical solutions that enhance the strategic position of the general counsel’s office.

 

As Mitratech's Product Marketing Manager, Steven O'Donnell uses his expertise in enterprise legal management to define TeamConnect's position in the market. He has been with Mitratech for 2 years. Prior to this, Mr. O'Donnell worked for 15 years at a major insurance corporation in a number of marketing and product management roles. He holds an economics degree from the University of Texas.

Please email the author at steven.odonnell@mitratech.com with questions about this article.