Lexpert Magazine

June 2018

Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.

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70 LEXPERT MAGAZINE | JUNE 2018 BY RICHARD STOCK | COLUMNS | Richard G. Stock, M.A., FCIS, CMC is a partner with Catalyst Consulting. For law department manage- ment advice that works, Richard can be contacted at (416) 367-4447 or at rstock@catalystlegal.com. Making Legal a Strategic Contributor OVER THE YEARS, I have read and written many articles about law depart- ment performance. A few were about trans- forming law departments from being part of the necessary overhead into being more of a strategic contributor in the company. Recently I had the opportunity to review a new white paper, "e Call for Innova- tion in the Law Department," prepared by ELM Solutions, a business of Dutch-based information publisher Wolters Kluwer. Aimed at legal operations professionals rather than the CLO-general counsel, it made sense that much of the con- tent is about improving efficien- cies and controlling costs. And although the paper does not cover several key bases, it is still well worth careful reading. It is not easy to link innovation and performance with value and business strategy in a brief paper. e premise is that Legal Oper- ations must make changes to its efficiency, value proposition, and insight if they are to be innovative. ELM Solutions cites the 2017 Altman Weil Chief Legal Officer Survey of 288 companies to iden- tify four top efficiency initiatives, namely: increased use of technology tools; more use of paralegals and paraprofessionals; law department re-organization; and revised workflow processes. All four efficiencies can free up time for in-house counsel to engage in more strategic contributions. Re- grettably, ELM Solutions' paper does not quantify time saved by each initiative. With its readership in mind, examples for greater efficiencies focussed on docu- ment and communications management, billing and payment of external counsel, and matter management. Our analysis over 20 years suggests that these activities take up an average of seven per cent of lawyer time and can be reduced to about four per cent. Productivity improvements in the or- der of 20 per cent depend on tougher work intake protocols, limiting who can call the law department, and a much greater capability for business units to be self-suf- ficient. ere is also a need fundamental changes to the practice and time manage- ment habits of individual lawyers. I have known well-established law de- partments to introduce formal intake protocols with their primary internal cli- ents. ose protocols identify when to call Legal, who may call, and how they may best prepare the questions and documentation when making the request for service. And they suggest the type of turnaround time that may be appropriate. However, most legal departments have no written guid- ance in place for their internal clients. e second part of the white paper's call for innovation is directed at the law depart- ment's value proposition. is, it argues, is to be achieved by "matching the right resources with the right work at the right time and for the right price." One can only agree that good data analytics, selective in- sourcing of complex work, and managing relationships with external counsel must underpin the value proposition. And so does matter budgeting, legal project man- agement, customized staffing models and alignment with the company's core values and business priorities. From the vantage point of leading law firms, this is basic stuff. e paper is silent on the most essential element of a law department's value: results. It is not enough to improve service and control costs of inside and external coun- sel. e Altman Weil survey reported that CEOs ranked three law department activ- ities as the most valuable: supporting busi- ness objectives, advising company leaders, and managing legal risk. Not surprisingly, controlling legal spend was ranked first by only eight per cent of survey respondents. e final part of the white paper calls for greater insights using basic metrics such as matter activity, invoice status, net mat- ter spending, timely and accurate budgeting, invoice reviews by in- side counsel, and proper work al- location by timekeepers. Indeed, most law departments do not begin to have useful information on hand about each of these. e paper tends to focus on tools and tech- niques to remedy this deficiency especially as it applies to external counsel; little is offered on how to remedy the same issues with inside counsel. Innovation is not invention. is paper itemizes many ways that a law department can improve its productivity, rethink in- dividual practice management habits, and better control internal and external legal spend. Yet while this can represent a bet- ter return on investment for Legal Services, it is difficult to see how it creates strategic value for the company. A separate white paper is required to suggest the innovations that improve law department effectiveness, impact, and overall value to the company. A new white paper, "The Call for Innovation in the Law Department," provides a good start to reconsidering practices LAW DEPARTMENTS 'FOUR top efficiency initiatives [are] increased use of technology tools; more use of paralegals and paraprofessionals; law department re-organization; and revised workflow processes.'

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