WHAT HAVE YOU DONE FOR US LATELY? Enhanced Law Department Reporting to Management

Transcription

1 WHAT HAVE YOU DONE FOR US LATELY? Enhanced Law Department Reporting to Management BERNADETTE BULACAN, DIRECTOR ASSOCIATION OF CORPORATE COUNSEL, GREATER NEW YORK CHAPTER July 23, 2014

2 A PICTURE IS WORTH A THOUSAND WORDS 2

3 TODAY S GOALS Demonstrate department s value with compelling law department management reports Overall Legal Landscape Litigation Management Employment Transactional/Contracts Outside counsel management; law department operations Best practices to collect and use data 3

4 E-BILLING: THE PAPER(LESS) CHASE Law firms submit electronic bills online to legal department Invoice is automatically processed against billing guidelines Invoice is electronically routed to approvers Approved bill is sent electronically to AP system for payment Invoice is archived in matter management system; available for query and report creation 4

5 WHY USE METRICS TO MEASURE THE LEGAL DEPARTMENT? Value of Legal Function Control costs Defend current staff, budget, structure Aid make vs. buy decisions DATA Better manage legal resources Act/think/speak like a CEO/CFO Triage matters 5

6 YOU CAN T MANAGE WHAT YOU CAN T MEASURE Which of the following metrics do you track? Legal spend as percent of revenue and total expense Total expenses by firm for particular groups of matters 59.1% 68.2% Percent of legal spend for proactive work vs. dispute resolution Total cost of outcome 40.9% 36.4% Average/median bill rate by firm for particular group of matters Days to resolution by firm or by particular groups of matters Percent of hours received at discount rates * Fifth Annual Legal Department Operations Survey (Inside Counsel) 22.7% 36.4% 31.8% 60% Percent of legal departments with formalized metrics program

7 TODAY S GOALS Demonstrate department s value with compelling law department management reports Overall Legal Landscape Litigation Management Employment Contracts/Transactions Outside counsel management; law department operations Best practices to collect and use data 7

8 COMPANY LEGAL STATUS: MULTIPLE DATA POINTS BUILD THE PICTURE MONTH YTD 2011 Total Matters Total Spending $672,024 $4,974,492 $9,084,047 Total$/$M Sales.19%.16%.21% Active Litigation New Litigation Closed Litigation Cycle Time N/A 199 Days 357 Days Litigation Spend $367,960 $2,960,967 $3,642,612 Litigation $/$M Sales.10%.10%.08% Settlement $ N/A $1,602,715 $278,936 Patents Trademarks IP Spending $176,135 $1,358,005 $1,467,726 IP$/$M Sales.05%.04%.03% Trainings Ethics Complaints

9 DEEPER DIVE: TOTAL SPENDING MONTH YTD 2011 Total Matters Total Spending $672,024 $4,974,492 $9,084,047 Total$/$M Sales.19%.16%.21% 9

10 DEEPER DIVE: LITIGATION MONTH YTD 2011 Active Litigation New Litigation Closed Litigation Cycle Time N/A 199 Days 357 Days Litigation Spend $367,960 $2,960,967 $3,642,612 Litigation $/$M Sales.10%.10%.08% Settlement $ N/A $1,602,715 $278,936 10

11 DEEPER DIVE: INTELLECTUAL PROPERTY MONTH YTD 2011 Patents Trademarks IP Spending $176,135 $1,358,005 $1,467,726 IP$/$M Sales.05%.04%.03% 11

12 DEEPER DIVE: OTHER INDICATORS OF DEPT. VALUE MONTH YTD 2011 Trainings Ethics Complaints

13 DESCRIBING THE LEGAL PORTFOLIO

14 TOTAL MATTERS MANAGED

15 TODAY S GOALS Demonstrate department s value with compelling law department management reports Overall Legal Landscape Litigation Management Employment Transactional/Contracts Outside counsel management; law department operations Best practices to collect and use data 15

16 WHAT IS OUR LITIGATION PROFILE? By Division (Year to Date) Division Insured Uninsured Mass Tort Plaintiff Total Corporate Energy Processing Subsea Production Surface Production Total Domestic vs. International (Year to Date) Location Insured Uninsured Mass Tort Plaintiff Total US Non-Us Total

17 WHAT ARE THE PRIMARY DRIVERS OF OUR LITIGATION? 17

18 WHERE IS OUR LITIGATION SPEND CONCENTRATED? Regional Litigation Spend Northeast Litigation West $1,005,184 Northeast $1,476,235 $676,932 $335,987 Pacific Northwest $440,981 $234,154 $172,900 $56,262 Mid-West $467,777 South $900,015 South East $746,108 18

19 IS YOUR PROCESS DEFENSIBLE? HIDDEN LEGAL HOLD LIABILITY 350 Outstanding Legal Holds No. of Custodians March (n=27) April (n=15) May (n=24) June (n=12) July (n=21) Responded Pending 19

20 APPLES TO APPLES: LOOKING AT LIKE DISPUTES BY PHASE Matter Short Name Substantive Law Case I Intellectual Property - Patent Case I Intellectual Property - Patent Case I Intellectual Property - Patent Case I Intellectual Property - Patent Case S Intellectual Property - Patent Case S Intellectual Property - Patent Case S Intellectual Property - Patent Case S Intellectual Property - Patent Firm Short Name Level Name Firm B L1 - Assessment Firm B L2 Pre-Trial Firm B L3 - Discovery Firm B L4 Trial Firm H L1 - Assessment Firm H L2 Pre-Trial Firm H L3 - Discovery Firm H L4 Trial Total Approved Approved by Invoices Matter $24, $44, USD USD $20, $44, USD USD $80.00 USD $44, USD $ USD $44, USD $139, $181, USD USD $17, $181, USD USD $12, $181, USD USD $ USD $181, USD % of Matter Spent 54% 45% 0% 0% 77% 10% 7% 0% 20

21 TODAY S GOALS Demonstrate department s value with compelling law department management reports Overall Legal Landscape Litigation Management Employment Transactional/Contracts Outside counsel management; law department operations Best practices to collect and use data 21

22 WHAT IS DRIVING THE CHANGES IN OUR LEGAL INVENTORY? Company engaged in series of acquisitions, doubling number of employees and open HR matters Open HR Matters Open HR Matters 22

23 DISCRIMINATION CLAIMS BENCHMARKS Claim Type Company EEOC Data Race 21.6% Gender 17.5% Nat'l Origin 6.8% Religion 2.3% Retaliation 21.8% Age 14.0% Disability 15.2%

24 SAVINGS FROM PRACTICING PREVENTIVE LAW Show the value of trainings provided by legal department Law department increased the number of trainings in response to rising number of HR matters COMPANY-WIDE HR TRAININGS Employment Matters Number of Trainings 24

25 UNPOPULAR EMPLOYMENT DECISIONS BASED ON DATA Sales revenue: $$$$$ = Greatest Sales In the World Untouchable Sales revenue: $$$$$ (internal LD resources $$$) (outside counsel costs$$$) = Termination 25

26 TODAY S GOALS Demonstrate department s value with compelling law department management reports Overall Legal Landscape Litigation Management Employment Contracts/Transactions Outside counsel management; law department operations Best practices to collect and use data 26

27 DEMONSTRATING TRANSACTIONAL EFFICIENCY No. of review requests No. of contracts reviewed and executed Average turnaround time Total & average contract revenue Cost to have outside counsel review Number of trainings (selfservice) 27

28 DEMONSTRATE ROLE IN GENERATING & PROTECTING REVENUE $2,000,000 $1,800, Contracts Closed & Pending $1,856,208 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $781,368 $1,154,364 $623,688 Q1 (n= 20) Q2 (n= 32) Q3 (n= 11) Stage 5 & 6 (n= 36) $400,000 $200,000 $0 Q1 (n= 20) Q2 (n= 32) Q3 (n= 11) Stage 5 & 6 (n= 36) 28

29 DARK ARTS : BUDGETING FOR M&A TRANSACTIONS MICROSOFT s DEAL 360 Predictability through process and data Phase 1: initial budget & staffing plan Each deal evaluated by 26 factors: geography; number of shareholders; pending litigation, number of commercial agreements, etc. Phase 2: track success; refine matrix based on deal volume 29

30 TODAY S GOALS Demonstrate department s value with compelling law department management reports Overall Legal Landscape Litigation Management Employment Contracts/Transactions Outside counsel management; law department operations Best practices to collect and use data 30

31 BALANCING WORK AMONG FIRMS Understand the landscape of the department s external matters Firm Business Unit/Focus 2011 $K % 2011 Evaluati # Files (Lead) Firm 1 Employment (All 1, % Firm 2 Processing & Productio % Firm 3 IP % Firm 4 International % Firm 5 International - Brazil % Firm 6 All - Annuity Payments % N/A N/A Firm 7 International % Firm 8 IP % Firm 9 IP % Firm 10 Customs Compliance % Firm 11 Litigation % Fimr 12 IP - DDS % Firm 13 IP % Firm 14 Corporate % Others 39 Firms % TOTALS 4, % 31

32 BEST PRACTICE: AUTOMATE RETENTION GUIDELINES COMPLIANCE 32

33 COMPLIANCE WITH RETENTION GUIDELINES Are our firms following our retention terms? Are we leaving money on the table by ignoring audits? BILLING GUIDELINE ENFORCEMENT Billing Guidelines Reduction Billing Guidline Override $53, $46, $47, $41, $12, $11, $14, $9, Q1 Q2 Q3 Q4 33

34 QUANTIFY SAVINGS FROM INVOICE REDUCTIONS Company Invoice Reductions Katy Perry $160, Arias & Morales $ Maczalaw $ Holland & Knight $2.70 Pellerano & Herr $60.66 Buffet Banque & White $156, Lee & Lee $ Kilpatrick and Stockton $2, Justin Beiber $46, MWE $ Posler Hospin $37.53 Prokskauer Daisy $42, King & Spalding $2, Kim Kardashian $10, Appleby $ Womple Carlyle $3, Norton Daisy $5, Pereya & Asociados $2, GRAND TOTAL $217, Company Invoice Reductions Appleby $1, Arias & Morales $ Buffet Banque and White $ Holland & Knight $7, Kilpatrick and Stockton $161, King & Spalding $ Lee & Lee $ Maczalaw $ MWE $37.53 Norton Daisy $4, Pellerano & Herr $2, Pereya & Asociados $ Posler Hospin $ Prokskauer Daisy $5, Womple Carlyle $18, GRAND TOTAL $205,

35 KEEP ATTORNEYS ACCOUNTABLE FOR THE LEGAL BUDGET March Spend by Attorney Attorney March Spend Monthly Budget % Monthly Budget YTD Spend 2013 Budget % 2013 Budget Katy Perry Foreign $40,267 $132,460 30% $261,589 $1,589,522 16% US $4,921 $10,000 49% $16,174 $120,000 13% Justin Beiber Foreign $0 $0 0% $0 $0 0% US $103,072 $22, % $137,343 $275,000 50% Kim Kardashian Foreign $2,319 $2,500 86% $11,692 $30,000 39% US $23,540 $45,833 51% $74,582 $550,000 14% 35

36 IS OUR LEGAL SPENDING ON TRACK? Budget to Actual Report 36

37 BEST PRACTICE: AUTOMATE PROJECT BUDGET TRACKING 37

38 PERFORMING TRIAGE TO PRIORITIZE MATTERS THAT NEED ATTENTION 38

39 BEST PRACTICE: OPTIMIZE STAFFING ON PROJECTS Project success depends on assembling the right team and monitoring allocation of work. 39

40 COLLECT DATA TO IDENTIFY HIGHEST PERFORMERS

41 OUTSIDE COUNSEL EVALUATIONS

42 BEST PRACTICE: UNDERSTAND IMPACT OF POTENTIAL RATE INCREASES 42

43 BEST PRACTICE: INCORPORATE EXTERNAL BENCHMARKS 43

44 DEPARTMENT SNAPSHOT: DEMONSTRATE OVERALL VALUE

45 TODAY S GOALS Demonstrate department s value with compelling law department management reports Overall Legal Landscape Litigation Management Employment Transactional/Contracts Outside counsel management; law department operations Best practices to collect and use data 45

46 INTERNAL CONTROLS TO ENSURE ACCURATE REPORTING All work (internal & external) in one place Create practical workflows to regularly collect consistent data from all firms and members of law department for all projects. Connect directly with outside counsel with e- billing/matter-management to collect invoices, accruals, budgets and status updates Preview results with business clients to verify accuracy and avoid surprises Compare performance with both internal and external benchmarks 46

47 WHERE TO LOCATE MEANINGFUL DATA & BENCHMARKS? E-billing and matter management systems Contract/IP management systems Other-company financial systems Law firm billing-records Manually stored historical information Internal surveys External benchmarking studies (ACC/Serengeti Managing Outside Counsel Survey, Hildebrandt Peer Monitor Index, Fulbright & Jaworski Litigation Report) 47

48 LEARN NEW WAYS TO MAKE THE NUMBERS WORK FOR YOU! 48

49 QUESTIONS?

50 CONTACT INFO BERNADETTE BULACAN Director, Market Development, Corporate Legal Thomson Reuters Phone: