Enterprise-wide Systems Unify A World-Class Legal Department

Friday, October 1, 2004 - 01:00

The Editor interviews Anne Kennedy, Chief Administrative Officer, and Jim Michalowicz, Litigation Program Manager, for Tyco International (US) Inc.

Editor: How is Tyco's legal department structured?

Kennedy: A global enterprise with over 260,000 employees, Tyco has operations in every corner of the world. The law department has about 280 lawyers, paralegals and other staff working in 18 countries. Bill Lytton joined Tyco as general counsel about two years ago and worked toward unifying the department. The Business Segment General Counsel report directly to Bill, and he added a corporate law function, staffed with 42 people, of whom 16 are lawyers. The majority of Tyco's lawyers remain largely located in the business segments. Bill has created a law department seen both internally and by others as a world-class group of professionals.

Michalowicz: Tyco has five primary business segments - Healthcare, Fire and Security, Plastics and Adhesives, Electronics and Engineered Products - each of which has its own infrastructure. Our challenge is to draw from the strengths of each infrastructure so that we can effectively develop the best practices for a model to be used throughout the entire law department. For example, we are working within the litigation practice management team to establish uniform protocols for handling document discovery, including e-discovery. Much of the effort concentrates on bringing these disparate groups together in creating a unified approach resulting in a Tyco Document Discovery model.

Editor: Please give an example of how technology is helping to increase efficiencies in your legal department.

Kennedy: When I joined Tyco about a year ago, we focused on implementing an enterprise-wide system to help us understand our total legal spending across our segments globally. In May 2003, we started collecting data to determine the e-billing system best suited to our needs for collecting data about our legal spending. We selected TyMetrix and went live in the U.S. in November 2003.

Tyco has received several benefits through its e-billing implementation. By eliminating paper invoices and paper processes, it allows a much better workflow for our lawyers. Among its features, its automated controls help the responsible attorney to identify where items on an invoice may be inconsistent with our outside counsel guidelines. From an overall management perspective, the system helps us focus our reporting by presenting our numbers in a way that helps us make decisions about our total spending.

Michalowicz: The TyMetrix reporting features make it an effective tool in monitoring case strategy. The data can be used to identify areas where there might not be alignment between in-house and outside counsel on the execution of case strategy. Deviations from the strategy will be highlighted by the task-based data within the TyMetrix system. Often the best observations in managing the costs related to a case can be made by looking at not only who is staffing the case and how much time they're spending, but also the timeline.

The timeline sorts fees and expense items based on the Uniform Task-Based Management System (UTBMS) codes developed by a tripartite effort of the American Bar Association, the Association of Corporate Counsel, and a group of major corporate clients and law firms. As well as helping you to track specific costs to determine if you're paying too much for a service, the timeline allows you to accumulate data to help you understand where you are in a current case. For example, past data aggregated from cases of a similar nature might indicate that an assessment of the current case should be completed within 90 days. If the data for the current case shows that the process is taking longer, you now have a basis to contact outside counsel and ask why. The e-billing system displays data in a way that paper invoices cannot. I have found that e-invoices are not just bills rendered; they are a means of communicating case strategy. An e-billing system supports this method of communication.

Editor: What steps did you take to implement the system?

Kennedy: We identified the core data fields that each of our segments would need to provide us. These included about ten data elements - things like matter name, responsible attorney, identification of practice area, the matter type and the law firm retained. We then worked with TyMetrix to develop the reporting capabilities we wanted from the system overall.

Editor: How are you letting the attorneys throughout your legal department's locations know what tools the e-billing system makes available to them?

Michalowicz: Each business segment has at least one e-billing coordinator (TSA) that is responsible for the data management and training of users on the system. Most of the coordinators are paralegals. I often view the paralegals as the "information managers" in the law department.

The training includes sessions with each of the TSAs who input and manage data in the Tymetrix system as well as sessions for the attorneys who review invoices or do evaluations of the matters. The first phase is to determine how you can review invoices electronically. The next part is to analyze the data in groupings to determine what observations can be made. We are right now educating our attorneys on how to use the analytic tools available from the e-billing systems to see how the law firms are working on their matters and to develop performance metrics.

Editor: What are some of the other advantages of e-billing?

Michalowicz: The data aggregated by the e-billing system across matters has been helpful as we move toward law firm convergence and as we identify primary suppliers for "unbundled" services such as legal research, jury research and court reporting. Seeing where our dollars are spent helps generate the baseline for making projections as to where we think our cost savings can be as a result of our convergence efforts.

The e-billing system also helps us with updating the billing guidelines that we provide to each of the law firms working on our matters. By looking at data across matters and across law firms, we can see where changes in the billing guidelines might be needed.

Editor: What other systems are you looking to implement?

Kennedy: We anticipate going live with a matter management system from Mitratech in November of this year. As well as serving as a venue for our financial reporting in the organization, it will be used by all of our segments to track their matters. The tracking capabilities enable users to associate documents to matters and track matter detail, including events, contacts, parties and staff.

We plan to implement our first portal product, Microsoft SharePoint Portal, to connect our business segments and allow them to share information more effectively. Our deployment of the SharePoint Portal product will focus on co-creation of documents and other collaboration tools. We still need to address the challenge of introducing this new system across the legal department and getting all users to commit to a consistent database so that we can report in a uniform way. The architecture and infrastructure issues present a significant challenge as well.

Michalowicz: One of my charges is the e-discovery plan for Tyco. E-discovery has five key steps - define the scope of the request, identify custodians and repositories of information, preserve the data, collect and convert the data, and review and produce the documents. We are currently doing a proof of concept with Areté, a system that uses linguistics to reduce the volume of non-relevant and non-responsive documents that get to that review step. In addition, this system provides findings on the documents that score the highest on relevancy to the issues most important to the case. Systems such as this have the potential of revolutionizing the way e-discovery is conducted.

My goal is to implement a discovery method that reduces the cycle time, decreases the cost to all the parties and improves the accuracy of what is produced. Taking such steps may be viewed as radical in the combative world of litigation, but I want to establish that Tyco is showing good faith in being both reasonable and responsive when it comes to e-discovery.

Kennedy: To assist management of intellectual property matters, we have implemented an enterprise-wide system from Computer Packaging, Inc. (CPi). For tracking our asbestos matters, we chose PACE, which is a data management and claims administration web-enabled system from Navigant Consulting, Inc.

Our focus this year has been to put a variety of technology tools in place to help our lawyers throughout the enterprise. In 2005, our focus will be to look at the results.

Editor: What practical tips do you have for other in-house legal departments in considering technology solutions?

Kennedy: Rapid implementation was important to us. We wanted to gain immediate results rather than spending years in working through the disparate data elements in each group's existing systems. We implemented our e-billing system quickly and then began refining it based on feedback from people as they worked with the implemented system. We are taking a similar approach to implementing our matter management and portal systems. Tyco will have implemented 6 enterprise-wide systems in 18 months.

Michalowicz: Ask yourself what you want to do with the system. What information can the system gather and how can the gathered information be organized to generate metrics that support what you're doing? My advice is to look beyond the basic functionality of a system and focus on the "end game," the results to be achieved. For e-billing, the basic function may be tagging data that does not match the parameters agreed upon between in-house counsel and their law firm counterparts. Resolving discrepancies can serve the end game of improving communications among in-house and outside counsel so that legal resources can be used most cost effectively.