When Clients and Law Firms ACTUALLY Collaborate #ILTACON

2016_ILTACON_logoSession Title: A New Approach to Aligning the Objectives of Outside Counsel, In-House Legal, and Corporate Business

Session Description: The past few years have brought a lot of discussion about how to better align the interests of law departments and their outside counsel through alternative fee arrangements, but the discussions generally end there. What if there was an approach that aligned outside counsel and legal departments in their pursuit of better business outcomes that extended beyond pricing? How can the strength of that relationship help demonstrate the value that the legal department brings to the organization as a whole? Come hear a case study exploring how one legal department and its panel of law firms have partnered differently and how their holistic approach to solving legal problems has the power to transform the way the department delivers value to the business.

Speakers:

  • Chris EmersonDirector, Practice Economics Bryan Cave, LLP
  • Bryon KoepkeSVP, Chief Securities Counsel Avis Budget Group, Inc.
  • David A. RueffShareholder and Legal Project Management Officer, Baker Donelson Bearman Caldwell & Berkowitz

Session Slides: Available through the ILTACON website

[These are my notes from the International Legal Technology Association’s 2016 Conference. I’m publishing them as soon as possible after the end of a session, so they may contain the occasional typographical or grammatical error. Please excuse those. To the extent I’ve made any editorial comments, I’ve shown those in brackets.]

NOTES:

  • The Avis Story.  They undertook a convergence effort to reduce their legal panel from 700 law firms to seven firms globally. The winning seven firms are guaranteed work, provided they maintain expected quality levels. In addition, these firms work within a “target” (or fixed) fee structure. This convergence provided several benefits for the Avis legal department and their related business clients:
    • reduced administrative burden
    • cost certainty
    • legal risk mitigation
    • increased efficiencies in legal services
    • improved business outcomes
  • The New Way in which Avis wanted to work with its panel firms:
    • focus Avis resources on tiers of work that were created based on business risk and complexity
    • foster collaboration between Avis and its panel firms, as well as among the panel firms themselves
    • provide incentives to panel firms to invest in innovations that result in better business outcomes for Avis
  • The Work. Avis did a wide-ranging risk assessment and then asked their panel firms to bid on the work. Avis identified 3 categories of work:
    • Cream — high-risk work that requires high levels of legal expertise
    • Core — moderate-risk work that requires moderate levels of legal expertise
    • Commodity — low-risk work that does not require much legal expertise
  • Activities in Preparation for RFP. Avis asked 130 law firms to complete a “pre-qualifer” (PQ) that was quite similar to a law school exam. The questions in the exam reflected the real issues Avis faces. Each question was multi-disciplinary.
    • Law firms had a tight timeframe (about 10 days) within which to respond. Plus Avis sent this challenge out during Spring Break, which put added pressure on the law firms. This was a way of gauging responsiveness.
    • Of the 130 firms invited, only 80 responded.
      • 50 firms did not respond. Some thought Avis was trying to get free legal advice. They were wrong; Avis already had the answers to the questions in the PQ.
      • Some of the firms that did not respond thought their relationship with Avis was so solid that they did not need to go through these hoops. They were wrong; they were eliminated from the Avis panel
    • Some of the firms provided responses that simply were wrong.
    • All firms were asked to tell Avis how they would staff these matters and what they would charge.
    • Avis also asked how they answered these questions, whom they involved?
  • The RFP. They invited 45 law firms to participate in the RFP. (This was 45 out of the 80 firms that responded to the PQ.) There were three areas of emphasis:
    • Legal expertise
    • Pricing
    • Universal Requirements (Operations) — focused on actual examples of innovations these firms had developed to better the firm or outside clients. According to Avis, they were looking for Jetsons firms (firms that were innovative on behalf of themselves and their clients), not Flintstones firms that are stuck in the Stone Age.
  • How did the Firms respond to the RFP?
    • They researched the business goals of Avis so they could align their responses better to Avis’ needs
    • They managed tight turnarounds on drafts of the RFP as they involved a wide range of firm personnel in the RFP process in a very short period of time
    • Bryan Cave took a divide-and-conquer approach. They put the legal questions in the hands of the lawyers and kept the Universal Requirements in the hands of the legal operations team. The Bryan Cave legal ops group had the expertise to discuss the range of technologies they had invested in (or were contemplating) to improve firm and client outcomes, as well as completed or contemplated process improvement efforts.
  • The Semi-finals. During the semi-finals, Avis invited 17 firms to meet with the company. Each firm was asked to bring four partners of their choice and their legal operations person. During the interviews, the partners expected to lead the conversation. Instead, Avis said they would review their slides later. Then Avis asked to begin the conversation with the most important person in the room — the legal operations person.  (Partner jaws dropped!) Avis started with legal ops because they were serious about understanding the technology and innovation potential of each firm.
  • The All-Star Team. Avis invited the final seven firms to a Summit at which they met with business and legal department leaders of Avis. At that meeting, Avis made it clear that the chosen firms were stars that now had to find ways to work together as if they were on an All-Stars Team. This meant not just solo excellence, but collaborative excellence as well.
  • The Legal Ops Bounce. Crucially, the legal ops folks from the law firms met with the legal ops folks from Avis. This combined client/firm legal ops group has unleashed powerful tools and methodologies for the benefit of Avis (and the panel). Further, the emphasis that Avis has placed on legal ops gave the law firm legal ops teams greater confidence and enthusiasm in the work they do.
  • Avis Success Factors. Panels are graded on Key Performance Indicators (KPIs). These KPIs are assessed on a matter-by-matter basis and, in the aggregate, feed quarterly and annual performance assessments. Here are the KPIs:
    • how well a Matter Assessment Form (MAF) was filled out. (The MAF helps the firm and Avis scope out a potential matter very quickly.)
    • submission of MAF in 3 days
    • the number of changes in scope requested per matter
    • the firm’s ability to accurately predict legal spend and outcome
    • the ability of the firm to avoid surprises to business units
    • how the firm uses technology to improve accountability and efficiency
    • value-adds the firm provides to the Avis engagement
  • How Baker Donelson revised its processes to meet the Avis KPIs:
    • They created an intranet Client Site that tracks the Avis engagement
    • They created workflow to ensure they can turn around an MAF within the required 3 days. This workflow is managed via their  Avis client site
    • They use budget and project monitoring tools internally so that they can notify Avis before something happens. This allows them to meet the critical KPI of avoiding surprises.
    • They created workflow to manage changes in scope and budget
    • They developed an external communication plan for the Avis engagement
      • monthly case management updates
      • quarterly reports to in-house counsel
      • annual reports
      • how to deal with emergency issues
    • They developed an internal communication plan for the Avis engagement
      • phase and task code requirements for matters
      • training regarding the initial budgeting, MAF and change processes
      • training regarding regular updates on budgets and contingent liability
      • training on and communication of Avis’s outside counsel guidelines
  • How Bryan Cave has invested to improve the Avis engagement:
    • they developed new internal processes and technologies
    • they trained attorney teams on this new way of working
    • they created and provided to the Avis legal department training on alternative fee arrangements (AFAs):
      • how law firms construct AFAs
      • the types of AFAs and their typical uses
      • how to frame AFA requests to obtain responses that support business objectives
    • they worked with the Avis legal department to build a dynamic technology platform that
      • facilitates the MAF process for Avis and for all panel firms
      • capture critical data points in structured format
      • leverage workflow tools to enforce operational standards
      • integrate with Avis’ e-billing system to automatically open matters
      • display actionable information to all users via flexible dashboards
      • provides dynamic authoring tools to create/update forms within minutes/hours rather than days/weeks
      • stores information in structured databases, but can generate documents in formats attorneys are used to reviewing (e.g, Word or PDF)
    • Who reviews, tests and suggests improvements to the technology?
      • Bryan Cave engineers, business analysts and other operational professionals do the initial work
      • Avis attorneys and legal ops professionals advise on integrating the panel’s technology with Avis’ e-billing, advanced workflow reporting and alerting, dashboard structure and key metrics
      • Baker Donelson (and other panel teams) provide recommendations on U/I enhancements and how to integrate the shared technology with the proprietary technology platforms of the panel firms — this eliminates duplication of effort and strengthens their shared common sources of record
  • The Collaboration is Growing.
    • Now panel firms share Avis work with each other if they believe this approach will benefit the client.
    • If Bryan Cave creates new technology, Baker Donelson  will do acceptance testing. When Baker needs automated data feeds, Bryan Cave provides it. Both firms confer with each other (and the other firms) to find solutions that benefit the client.
    • The collaboration among the panel firms has generated new ideas and approaches to matter intake and AFA construction
    • The technology used by the panel firms has improved because these firms now have a reason and the ability to share ideas as never before
  • Next Steps. Both Avis and its panel firms have ambitions for growing and improving their collaboration.
    • On Avis’ list of next steps: Creating metrics to measure and dashboards to communicate progress in key strategic areas of operations.
    • On the panel firms’ list of next steps: Creating metrics to measure and dashboards to communicate progress by the panel firms in helping Avis manage its legal issues.
  • Results. This collaboration has been an unqualified success for  Avis and for its panel firms.
    • Avis: Thanks to the collaboration, the Avis legal department has now established itself as a critical business partner of the larger organization. Through its pioneering work in this collaboration, the legal department has modeled better ways of managing liability and expenditures that can now be applied across the company. Further, the work of the legal department has become a source of competitive advantage for the company.
    • Panel firms: Their experience with Avis has demonstrated how non-attorney professionals can be critical to the selection of the firm for a legal panel, as well as the on-going relationships between the firm and its client. The panel firms now have clear confirmation that their investments in innovation, project management, and process improvement have enabled them to differentiate themselves in a competitive market. Finally, these firms now see the benefits of not only collaborating with the client but also with the other panel firms. The Avis collaboration has become a significant win-win situation for these firms.
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How does KM Factor into the Strategic Fabric of the Firm? #ArkKM

Session Description: 

Baker Donelson takes a holistic approach to firm strategic planning. In this keynote segment, attendees will hear from Jennifer Keller—Baker Donelson’s new President and COO. Taking the position in April, she is the first woman in this role and brings a unique perspective to the function of knowledge management in pursuit of the firm’s strategic goals.

Speaker:  Jennifer P. Keller, Firm President & Chief Operating Officer, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

[These are my notes from the 2015 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I’m publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I’ve made any editorial comments, I’ve shown those in brackets.]

NOTES:

  • KM Development at the Firm. Baker Donelson’s KM efforts started in 2002. In 2004, they instituted “KM Dollars” (now called the venture fund — see below) to provide incentives to lawyers to participate in KM projects. In 2005, they launched their first KM strategic plan. In 2010, they moved to their second KM strategic plan. Now they are working on strategic efforts for the 2015-2019 period: KM Consultancy work, KM Technology and Product Development, and KM Department Reengineering.
  • Holistic Approach to Strategic Planning. Baker Donelson has a strategic planning body that involves departments, practice groups, KM LPM, Marketing executive management, and the Board (i.e., management committee in strategic planning. This strategic planning body studies, plans and recommends courses of action for the firm.
  • The Venture Fund. The venture fund is the way to “pay” attorneys for working on non-billable projects, including KM and other research and development projects. This fund is a “significant amount of dollars” that are put in the budget and used to compensate attorneys with billable hour credit for strategic projects that are otherwise non-billable. They have a rigorous application review process that requires each application include an approved plan. Then, when the lawyers apply for funding, their claim must be substantiated by an audit by the KM department to ensure the work done through this fund is of strategic value to the firm.
  • 5 Keys to integrating KM into the Firm.
    • Understand the psychology of the attorney of 2015. There is pre-2008 lawyer life and post-2008 lawyer life. Now lawyers are operating under greater scrutiny with respect to efficiency and value for the client.  Now the new focus is: lower cost, more profitability, productivity.
    • Have a seat at the table.  To be effective in KM, you need to understand the firm and its people. This means being at the strategic planning table, and having a foot in administrative management and practice management. If you cannot get a seat at the table, have a relentless advocate who does have a seat at the table.
    • Focus on client value. This does not mean the same thing to everyone: lower cost? Higher predictability? Better outcomes? More transparency? The definition of client value is set solely by the client. So you need to have some core agreement with your clients as to what constitutes client value to them. If you do a client survey, make sure that the KM department sees the results to that they can tailor their work accordingly.
    • Don’t forget the importance of Support Staff and Administrative Departments. Assistants are integral to the work of attorneys and their practices. These assistants can be important allies when converting lawyers to a new workflow or behavior.
    • Identify and help remove obstacles. Look at what is working. Look at what is not being used. Then ask “Why?” When you find the answers, you will be a hero. As you do this work, remember that good communication is critical. Don’t fall back on email for everything. Baker Donelson uses a great deal of one-on-one training to help people in the firm engage with KM and its efforts.
  • Have a  great KM team.

 

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