Using three case studies, Paul Taylor explains how technology can help simplify the work of in-house lawyers, and increase their value to the business
To continue the theme of a mismatch between reality and perception, (see Law and technology part 1: What have the techies ever done for us?), I would like to address the all-too-often-asked question: ‘What has the legal department ever done for us?’.
Many of the learning points, recommendations and best practice outlined by my colleague Sue Pratt in the first part of this article[link] can be found in the three cases studies we are now going to review.
Whilst the case studies are all based on real life examples from a number of major organisations, we have identified some common themes which will be applicable to the majority of in-house functions, irrespective of size or sector. The drivers for change will be specific to each organisation – but a number of issues occur time and time again.
Here is a short list of the most common issues we encounter, in no particular order of importance.
- Less resource available to undertake more work
- No investment available for legal team systems
- No IT resource available to support legal team initiatives
- Limited admin / PA support
- Enterprise systems not tailored to legal team requirements
- Documents created and stored in multiple systems in multiple locations
- Lawyers spending too long on admin tasks or repetitive work
- Difficulty of matching availability of legal resource to business requirements, seasonal fluctuations etc.
- Business structure enforcing a silo mentality between procurement, contracts, operations, finance teams etc.
- Limited legal resource to support contract negotiation and approval processes
- Contracts carrying low margin but high risk
- External resource taking too long and being too expensive
- Statutory / legal proceedings deadlines
- Even minor mistakes being costly to the business
- Lack or visibility of available team resource
- No overview of contract risk across client base
- Increasing regulatory reporting obligations without matching increase in resource
Case Study 1 – a global publishing company
This case involves the need to support the production of author agreements – basically contracts between the publishing company and its contributing authors. The initiation, preparation, negotiation, approval and execution of these contracts typically took seven weeks to complete and was in large part managed by the in-house contracts team which, as a result of a corporate re-structuring, would no longer be able to fulfil this function.
The in-house team were tasked with developing a solution which could go-live within three months. Such a timeframe ruled out a major IT project. Therefore, they looked to their existing resources and identified two potential pieces of software with underutilised functionality which might meet their requirements and form the basis of a contract management life-cycle system, covering initiation, preparation, negotiation, approval, execution, and storage.
The products in question were Novatus and AdobeSign (formerly EchoSign) for which the organisation held enterprise licences.
A short statement of requirements was compiled and included the following.
- The ability for contracts to be generated by the business from existing internal data, using documentation produced by the in-house legal team.
- The legal team required the ability to track progress of individual contracts and generate reports.
- The in-house team would be freed-up to focus on bespoke contracts and would only be involved with material issues in relation to the new SelfServe portal.
- Improved risk management.
- No additional capital investment on hardware or software.
- Low admin overhead.
- Improved business / author satisfaction.
- Reduction in the contract creation to execution time frame.
The solution was developed in line with the statement of requirements and was deployed within the required timeframe. It is anticipated that additional contract types could be adapted to take advantage of the new functionality offered by this solution. The foundations have also been laid for integration with the organisation’s royalty control / revenue system.
An excellent example of a home-grown solution utilising existing technology resource and a lot of in-house legal expertise. The new solution has now freed up resource which can address further improvements to the solution and continue the transformation programme.
Case Study 2 – a UK utilities company
The second case involves an in-house legal team’s challenge to review commercial tender opportunities for the supply of services to the public and private sectors. The tender process typically is non-negotiable and results in a binding contract for the successful bidder. It is therefore necessary to review the contact documentation for a legal, financial, commercial and operational risk perspective.
The contract documents are based on pro-forma JCT or equivalent contacts with multiple amendments and often involve the establishment of a framework arrangement with subsequent call-off contracts.
The business has a good win rate but approximately 60 per cent of the bid opportunities reviewed do not end up in an executed contract – therefore there is the potential to incur a lot of wasted effort in reviewing the documentation.
The in-house team produced a set of requirements.
- Price – a key metric given the potential for ’wasted’ costs.
- Appropriate risk analysis and quality assurance.
- Collaboration across internal business functions.
- Ability to cope with seasonal fluctuations.
- mproved reporting and management information capture.
The solution was developed in conjunction with one of their panel law firms. The law firm provided access to their HighQ Collaborate platform as part of the new service delivery. The new system arose from a combination of a new resourcing model, new processes, existing technology and new documentation. The in-house team sponsored the development and oversaw the production of the new review templates and out put reports.
The system also contains a database of all historic bids (useful for repeat tenders), the ability to send online instructions direct from the business under the supervision of the in-house legal team, a central repository for clarification questions and responses, as well as providing data for the post award review and approval processes.
The internal approval processes could be re-engineered to leverage advantages of new legal review system – with significant impact on the amount of time spent in reviewing the tenders which led to a significant reduction in the legal review cost of the contracts. The average review cost was reduced from £2,500 to £750 with the potential for further reductions going forward. The principal saving is due to each task within the review process being handled by an appropriate level of resource without increasing the management overhead which is embedded within the system.
Case Study 3 – a UK Telecoms company
The final case concerned the need to monitor and manage a large number of property-related lease renewals on a national basis, ensuring all professional parties, the in-house teams, external agents, surveyors, lawyers etc. had access to relevant documentation and were aware of the current status of all live matters. The leases range from radio base stations through to high street stores and larger commercial premises.
The involvement of statutory deadlines driven by court proceedings added a further need for shared calendars covering potentially thousands of leases. As ever, financial constraints required a low administrative overhead to manage the process. There was also a need for data (lease information etc.) to be transferred to a number of in-house and external systems for processing.
The volume of documentation generated in the process also made some form of document automation an attractive option.
A combination of expertise from the in-house team and one of their panel law firms developed a collaborative working solution – again utilising the panel firm’s HighQ Collaborate system. The system, which is still being expanded, met the initial requirements and has an ambitious programme of continuous improvement including the automatic generation of correspondence and court documents.
Single data entry (as simple as the address of premises) is utilised multiple times used across multiple workflows without the need for repetitive entry. The system provides the in-house team with self-service reporting and document generation – reducing the external legal costs and underpinning a fixed price model.
All these case studies have a number of common themes. In each case, the solution was developed by utilising existing technology with no purchase of additional hardware or software required. Each solution has exceeded the original anticipated benefit realisation – whether in terms of time saved for the production and execution of documents, a reduction in the amount of resource required to support an activity, or improved quality and visibility of business data relating to a particular activity. The solutions were all fast to deploy – and were managed by the legal teams rather than becoming an IT project.
Each of these solutions was initiated by the in-house legal team, which participated in their design and deployment, ensuring the smooth transition to business as usual status. Having said that, each solution has a supporting continuous improvement programme with the initial work being a starting point rather than an end in itself, allowing for growth and expansion to similar work-types.
The rewarding aspect from the external provider’s perspective is that each solution has also been beneficial to the business outside the legal department – whether improving time to revenue for particular types of contract or providing better risk management.
So the next time you are asked, ‘What has the legal department ever done for us?’, hopefully your answer will be ‘a lot!’.
Ethien is an advisory, managed services and technology company which helps legal and compliance teams manage complexity, risk and change.
Paul works with lawyers to help them deliver legal services digitally. Paul is a lawyer and an ex-partner at Freshfields Bruckhaus Deringer and Osborne Clarke and was co-founder of the service improvement program within Osborne Clarke. Paul has also spent time as a Deputy GC with retail, utilities and e-business companies.