The doers have determined the issue to be this: Times have changed and the legal model needs to be reshaped to appropriately address today’s challenges, which are just as much about business issues as they are legal matters.
The solution is straightforward, I believe, and that is to add an area to the legal profession that we refer to as “integrative law,” wherein an in-charge lawyer steps back and takes a holistic view on the best way to get work accomplished. Within integrative law are companies, or Integrative Law Providers (ILPs), that bring experienced and flexible attorney resources to the table, as well as a focus on legal process and effective management, smart use of technology, and reduced legal spend. Furthermore, this entity is grounded in the metrics, processes, technology, flexibility and quality control that today’s in-house legal departments need.
Most importantly, the ILP does not replace anything within the legal life cycle; it simply allows the in-house legal department to assign and define the value of its work, make best use of all resources, foster collaboration, and ultimately conduct its legal work more efficiently and effectively for less money.
In short, the ILP brings true process to the model shift that our profession is currently undergoing.
Why the Shift Is Necessary
Business decisions are often conjoined with legal matters, yet most lawyers have limited training or experience in business management. Corporations are examining the dollars spent on legal matters and demanding fiscal solutions; but to date, our industry has generally offered Band-Aid fixes and dated models. Consider the following:
The average company spends $4.3 million on legal fees per $1 billion in revenue.
The average hourly rate for associates at AmLaw 100 law firms is more than $500.
The cost problem is exacerbated by the common “silo approach” to legal matters, with in-house and outside counsel handling issues in isolation. Many cost containment methods have been explored, including the use of alternative fees, offshore outsourcing, the disaggregation of discrete tasks, using regional and ‘alternative’ firms, or bringing as much work as possible in-house.
While these are good first steps in reducing outside legal spend, these methods do not prioritize processes, the need for flexible staffing, collaboration, institutional knowledge or ongoing cost savings through continuous process improvements.
The Rise of the Integrative Law Providers
Some corporations have turned to legal process outsourcing companies (LPOs) or staffing companies to help. LPOs, which are typically offshore companies staffed with low-cost, non-U.S. attorneys, can provide volume-oriented services and basic processes for certain types of work—mainly first-level document review or simple contracts assignments. Similarly, legal staffing companies, which many lawyers confuse with ILPs, provide armies of attorneys at low hourly rates for voluminous matters or temporary attorneys for a short-term need. Both the LPO and staffing company options have challenges with work management, duplication of work, attorney retention and lack of a big-picture solution.
The ILP brings the best attributes of multiple providers together with an “ease of use” model and a focus on managing an entire project. An ILP is not a law firm, but it offers experienced attorneys in a variety of practice areas. It’s not a staffing company, but it has the flexibility to meet the needs of any size matter. It’s not a technology vendor; but it captures, understands and uses metrics with numerous platforms. It’s not a bottom-barrel hourly rate provider; but it focuses on life-of-project costs and a more holistic approach, which also results in significant cost savings.
The experienced U.S.-based attorneys in an ILP find that this is a different way to practice law and, therefore, are trained in such areas as creating and managing to a budget; managing projects, processes and teams; maximizing various technology platforms; identifying and understanding performance and efficiency metrics; and communicating with all partners (in-house, IT, outside counsel, technology). They reveal the need for improved and flexible legal solutions with ROI-driven business initiatives and help define the value of different types of legal work.
The ILP provides measurable results with a single point of contact to design, implement and manage the process to achieve cost-effective, high-quality legal results and business information.
The Legal ROLE Model: Deploying a Real Team
Fully integrating ILPs into today’s legal model begins with redefining the team and how its members operate to create a truly collaborative approach.
The core of the integrative legal team consists of three defined ROLEs, or Resources Organized for Legal Efficiency: in-house counsel, outside counsel and the ILP. All players work together, eliminating silos of isolated work and making the most effective use of each team member’s skills and expertise.
- In-house counsel is the ringmaster, assigning value to legal matters and providing high-level guidance to the company’s customers and business leaders.
- Outside counsel is focused on strategy and direction, and has the training, resources and expertise to navigate complex issues.
- The Integrative Law Provider is the process developer and attorney provider, working collaboratively with both partners to develop and execute efficient workflows and control costs.
In a way, the three roles in this integrative core team are similar to those involved in building a house. The homeowner (in-house counsel) chooses an architect (outside counsel), who also works with a contractor or project manager (ILP). The architect draws up plans for the house that reflect the owner’s design preferences and budget parameters. Once everyone is in agreement, digging and building starts. It would be too expensive for the architect to do the actual construction, and the architect isn’t the best person to handle that work anyway. Therefore, it is the contractor’s job to bring in and manage his or her team of specially trained construction workers who have specific skills related to each task and can give the contractor feedback on the work they’re doing and make sure there aren’t any issues. The architect and homeowner direct and supervise the work and can check on it as needed, and if change orders are made, the contractor communicates to the team to execute them.
To carry this analogy further, the integrative model is akin to using the same team to design and build one house after another, no matter the size, and to get continually less expensive and more streamlined with each passing build or project. With the ILP playing a more significant role, the other partners have the ammunition needed to make intelligent and quick business decisions, an essential objective in today’s legal landscape.
This new ROLE model accomplishes several goals:
- Allows in-house counsel to properly delegate and complete work based on complexity, volume and budget;
- Allows for effective resource allocation, making the best use of all legal partners;
- Eliminates the silo approach and forces all partners to work together to get results;
- Integrates technology, promotes access to data, and makes process and quantification the drivers of decision-making.
Does It Work?
Consider the applications. An in-house attorney must know what a piece of litigation will cost in order to make a business decision about how to proceed. With data and analysis from similar matters — provided by the ILP — the in-house attorney accurately understands the costs involved for each aspect of the matter, such as discovery, research, depositions and other necessary work. When this information is know, an informed, measurable decision can be made.
In another example, when a company is considering a small acquisition, the in-house attorney decides whether to have in-house or outside counsel run the deal. Those working on the deal meet with the project manager (PM) from the ILP team and discuss objectives, time frame, and anticipated issues and challenges. The PM can share areas that have caused concern in the company’s prior acquisitions, and can recommend a technology or database for post-deal integration or use. In addition, the PM will assemble the team, coordinate the training, manage the process and the team to ensure work product quality, and meet the deadline — all while outside and inside counsel are focused on bigger-picture issues involved in the deal. Any issues that arise are communicated immediately so that the lead attorney can make timely and well-informed recommendations. At the conclusion, a post-deal integration sheet is provided to in-house counsel so that the legal team’s priorities are known in order to focus on moving forward and can be applied to future matters.
Similarly, in contracts management, the attorney knows the length of time the ILP team takes to turn around a contract to the business units, whether there are potential challenges with particular contract types (or vendors), and which attorney on the ILP team is most adept at handling negotiation or practice-specific issues. Because the attorney has one team handling the corporation’s contracts with the same process, consistency is greatly improved and dozens of metrics are tracked, and that information can be applied to future matters.
No matter the area in which the model is implemented, the ILP provides, in addition to client-dedicated and experienced attorneys, a process that has quality-control measures built in, detailed reporting, a focus on best practices and areas of improvement, and life-of-project reports that objectively evaluate costs and efficiency. All of this information can ultimately be presented to the general counsel, CEO and/or CFO so they can understand how effectively company resources are being used to handle legal matters.
The end result is that in-house counsel receives a highly efficient, defensible work product in which technology, costs and quality control are the foundation. This model can be used on matter after matter, year after year. Ultimately, corporations have the process in place to handle matters of any size and the data to make solid business decisions.
At this point in our profession’s existence, that’s what I call change. ‘Doers’ at some of the largest corporations in the world are already deploying this new model. They can answer the “How do we actually do this?” question.
Jane Allen is the Founder of Counsel On Call, an Integrative Law Provider that works with one-third of the 25 largest companies in the U.S., dozens of publicly traded companies and one-quarter of the AmLaw 250 – including many of the largest corporations in our region. Counsel On Call works closely with general counsels to create and implement innovative legal models that focus on process, metrics, flexibility, quality control and return on investment.