You can only manage what you can measure. How does the in house team have visibility, certainty and control over legal costs particularly in global decentralised business? The session will share models, ideas, solutions and case studies of examples of businesses who have, through technology, process and discipline, not only wrestled control of the external spend but used the data produced to make a material difference to the reduction of that spend. This session will touch on e-billing and other technology commonly employed to control cost and deliver financial reporting to the in house team.

1. Managing external cost
Partnering for efficiency
Stephen Hopkins
Partner, Eversheds
Martin English, Thomson Reuter
18 December 2014

2. Eversheds LLP . . .
• One of the largest full service law firms in the
world with over 4,000 people including more than
500 partners and almost 2,000 legal advisors
• 55 offices in major cities across Europe, the Middle East,
Africa and Asia
• Relationship lawyers – pioneers of partnering in the
legal market through the original DuPont wheel and Tyco
• Providing control over costs - championing the cause
closest to clients’ hearts: prevention not cure
. . . around the world

3. The golden age . . .
“Looking back on the period before the 2008 Crisis
it is hard not to conclude that the legal market was
experiencing a ‘Golden Age’. This era has now
passed and may not return.”
. . . for law firms
Jomati Consulting 2011

4. Law firms . . .
“While the difference between the mid-80s and
mid-90s in average PEP was just $140,000, the
difference between PEP in the mid-90s and 2007 peak
was a difference of $910,000, which is a remarkable
rise in remuneration over such a short period.”
. . . never had it so good
Jomati Consulting 2011

5. The new order
New challenges
• More enforcement of alternative
and fixed fees
• Demand that law firms share more
of the risk
• Increasingly tough panels
• Growth in tenders and
consolidation
• Cheaper and new forms of
production are developing

6. New
competitors
=}

7. Business
customers
In-house
legal team
services:
• A
• B
• C
Big law New law
Business
customers
In-house
legal team
services:
• A
• B
• C
LPO
Contract lawyers
Projects
Online services
Virtual firms
Research
Legal analytics
Collaboration
Firm A
Firm B
Firm C

8. New law
New market entrants
1. Legal process
outsourcing (LPO)
2. Insourcing and
secondments
3. Complex
projects/ managed
legal services
4. Alternative/
virtual law firms
• Outsourcing of entire
functions or parts
of functions
• Low-cost work with low
complexity/criticality
• E.g. contract review,
litigation support,
E-disclosure/discovery,
IP-related work, due
diligences
• Temporary staffing
of lawyers to cover
peaks at legal
departments
• Management of more
complex/critical
projects with extended
responsibilities (in a
consultancy-manner)
• E.g. complex contracts
projects; regulatory
and compliance
projects & arbitral
proceedings
• "Traditional" legal
advice, without typical
overhead costs and
with fixed price
• Lawyers virtually
connected (supported
by sophisticated online
platforms)
Providers
International

9. 5. Self Service
Platforms
6. Research &
Information
Services
7. Quantitative
Legal Analytics
8. Networking
Platforms
• Platforms tailored to
legal needs & questions
• Offer partly legal
document generation
services
• Partly supplementary
legal advice and Q&A
• Online resolution
platforms
• Customized legal research
on demand
• Based on databases and
libraries
• High-tech statistical
products
• E.g. law suit statistics
to predict chances
• IP statistics to predict
application chances
• IT-based
management of
billings
• Structured to enable
the exchange of legal
information
• e.g. collaboration
system for in-house
counsel (form of closed
communities)
Providers
International
New Law
New market entrants

10. Are you using new alternative
providers?
Yes
No

11. Your legal team
Re-aligning to achieve success
• Review of internal department
• Process mapping
• Focused KPI’s linked to
objectives/strategy for the team
• Benchmarking
• Clear management information
relating to financial performance
• Monthly reporting on KPI’s,
strategy and legal spend

12. Taking a ‘health check’
Are you making the most
of the new market dynamics?
• Taking you through a health check measuring
your team performance
• Be honest in your appraisal –
ensure you score ‘as-is’ and not ‘hope-to-be’
• Score each step out of ten
0 5 10
I know we do not
have procedures in
place
I know we have
some processes –
but we could
improve
I am positive we
have excellent
protocols in place

13. Legal department strategy
The plan to achieve your goal
• No defined strategy
• No alignment to wider
business strategy
• No communication buy-in
from team
• Ad-hoc reactive - fire
fighting
• Clearly defined and
communicated strategy
• Buy-in from team, wider
business and senior
management
• Aligned to wider business
objectives
• Regularly reviewed and
progress measured
0 5 10

14. Managing external firms
Who to engage
0 5 10
• No written protocols
• No regular meetings
• No minimum standards
• Written protocols
• Regularly reviewed and
monitored
• Clear strategy –
communicated and
understood by firms

15. What is your greatest frustration
with private practice law firms?
“ Frequently failing to work effectively with in-house counsel; forever
trying to reach the business and push internal legal aside”

16. Do you have a formal panel process?
Effective supplier management
0 5 10
• Business units choose law
firms
• Vast array of firms
providing piecemeal advice
• No consistent rationale
behind firm choice
• Defined and structured
tendering process
• Defined panel lifespan
• Tender process aligned with
legal and wider business
goals

17. Do you have a system in which you
regularly capture information about
the performance of your law firms?
My memory. Nothing more complex than that.
“My memory. Nothing more complex than that.”

18. Poll
• Are you currently using e billing?
• Yes
• No

19. Serengeti tracker
Legal e-billing, matter management
and data reporting

20. Outputs
The Serengeti approach / workflow
Serengeti puts everything in one place and provides a collaborative
workspace for both in house counsel and all external law firms
Management
KPI’s
Law Firm
Management
Accounts
Payable
Global Offices
In House Legal Team
Legal Work
Law
Firm
Law
Firm
Law
Firm
Law
Firm
Law
Firm
Law
Firm
Law
Firm
Law
Firm
Law
Firm
Serengeti
E-Billing
Matter
Management
Reporting

21. 21
Using data to unlock the value
of the legal department
Value of Legal
Function
Defend current
staff, budget,
structure
Better manage
legal resources
Triage matters
Act/think/speak
like a CEO/CFO
Aid “make vs.
buy” decisions
Control costs
DATA

22. Management data
External budget to actual Metrics
Month YTD 2013
General (All)
Matters Open
Spend £US
Var to Bud (unfav) £
Total £/£M Sales
Training
Ethics Complaints
Litigation
Active
New
Closed
Cycle Time (days)
Spend £
Var to Bud (unfav) £
Liti £/£M Sales
Settlement £
Dev Exp Val (unfav) %
TOTAL
0
500000
1000000
1500000
2000000
2500000
2010
2011
2012Budget
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
2013Budget
External Prior Year Budget

23. 23
Power of data analytics
in the legal department
0
5
10
15
20
25
30
2002 2003 2004 2005 2006 2007 2008 2009 2010
Company-wide HR trainings
Employment Matters Number of Trainings
Law department increased
the number of trainings in
response to rising number of
HR matters

24. Legal KPI’s
Key Spend Measurements Other Departmental Metrics
Top 10 firm spend Training
Spend by month Contract management
Average billing rates Instant NDA , eSignature
Law firm staffing Compliance
External vs. internal spend IP metrics
Legal spend as % of revenue Litigation
Spend by matter Headcount metrics
# of law firms used Records management
Preferred vs. non-preferred Privacy and security
% Alternative fees Weekly newsletter clicks

25. The metrics
Steps to success

26. Project management – the basics

27. Principles The zig zag approach
Senior lawyer
Experienced lawyer
Junior lawyer
Paralegal
/ admin
Senior
lawyer
Paralegal / admin
As - Is To - Be
costoflocation
complexityofwork
legal process
Experienced lawyer
Junior lawyer
legal process

28. SHINE
The ten key challenges for in-house teams:
1. Define scope, role, ensure relevance
1. Risk management...

29. The next chapter
The challenge of implementing
solutions to create change and add value
Optimised
•KPI’s driving behaviour
•Forecasting and monitoring
•Eliminated the barriers
Efficient
• Consistent approach
• Tracked outputs
• Controlling majority
of barriers
Emerging
•Identified needs
•Defined processes
and requirementsLittle to no
implementation
•Undefined challenges
•Inconsistent approach
•Minimal investment
Breaking the cycle
• Comms and PR on successes
• Case studies of value add
• External help and resource
to maintain momentum
• Expand the pilot
• Credible thought leadership
Breaking the cycle
• Experiment/pilot
• External resource and expertise
• Peer groups
• Health check and wider adoption of need for change
Recognition of the challenges
and the need for change.
Why doesn't change happen?
Barriers
•Time
•Understanding
•Senior team buy in
•Motivation
•Where to start
•Team structures
•Budgets

30. Law firms . . .
“That some will fail here is certain. That others will
understand the new rules of ‘the game’ and use them
to remould their business model is also certain. But,
accepting the rules have changed is perhaps the most
significant step of all.”
. . . accepting the rules have changed
Jomati Consulting 2011

31. Further information
• For further information, please contact:
• Stephen Hopkins – Eversheds LLP
stephenhopkins@eversheds.com
• Martin English – Thomson Reuters
martin.english@thomsonreuters.com

32. SHINE events
• To view our latest events and webinars, please
visit our webpage:
http://www.eversheds.com/global/en/what/service
s/in-house-counsel/events.page

33. © EVERSHEDS LLP 2014. Eversheds LLP is a limited liability partnership.