Building the Law Department of Tomorrow

Transcription

1 Building the Law Department of Tomorrow Edited by Alex Davies

2 Head of events and books Leah Darbyshire Commissioning editor Alex Davies Editorial assistant Edward Bowes Published by ARK Group: UK, Europe and Asia office 6 14 Underwood Street London, N1 7JQ United Kingdom Tel: +44(0) publishing@ark-group.com North America office 4408 N. Rockwood Drive, Suite 150 Peoria IL United States Tel: +1 (309) publishingna@ark-group.com Printed by Canon (UK) Ltd, Cockshot Hill, Reigate, RH2 8BF, United Kingdom ISBN: A catalogue record for this book is available from the British Library 2017 ARK Group All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, except in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under terms of a licence issued by the Copyright Licencing Agency in respect of photocopying and/or reprographic reproduction. Application for permission for other use of copyright material, including permission to reproduce extracts in other published works, should be made in writing to the publishers. Full acknowledgement of author, publisher, and source must be given. DISCLAIMER This publication is intended as a general guide only. The information and opinions it contains are not intended to provide legal advice. The publishers bear no responsibility for any errors or omissions contained herein. ARK Group is a division of Wilmington plc. The company is registered in England & Wales with company number GB. Registered office: 6 14 Underwood Street, London N1 7JQ. VAT Number: GB

3 Contents Executive summary About the authors Chapter 1: Legal metrics in 2017 and beyond Metrics that matter By Paul Lippe Chapter 2: How law departments can use Legal Project Management to enhance performance and add value By Aileen Leventon Chapter 3: The evolving in-house counsel role requires new skills By Mary E. Juetten Chapter 4: Legal operations Moving innovation from the back office to the front By Lucy Endel Bassli Chapter 5: The six key areas of risk for law departments By Michael A. Ellenhorn Chapter 6: The law department of today and why it needs to change By Ian White Chapter 7: You can do more with less An innovative and holistic approach By Paul Williams Chapter 8: Value-based pricing How to transition from hourly rates for efficiency, productivity and cost savings By Ken Callander iii

4 Contents Chapter 9: Changing relationship dynamics The legal nexus of forces By Katherine M. Lowry Chapter 10: The law department of the future In-house and private practice By Janvi Patel Chapter 11: Encouraging diversity and inclusion in in-house legal department staff By Nate Cemenska, Jon S. Hoak, and Stephanie Corey Chapter 12: Organizational health and leadership development By Jay Hull iv

5 Executive summary In recent years, in-house law departments have grown considerably they have needed to in order to face the various legal and compliance challenges that organizations of all sizes have to deal with as a result of increasing regulation and litigation across all sectors. In fact, some in-house departments could easily compete with some of the top 50 law firms in terms of personnel numbers. With this rapid expansion in mind, managers need to ensure that the law department has the appropriate processes, resources, and infrastructure to operate at maximum efficiency. From employing effective metrics to judge performance, to embedding the most appropriate technology and processes into the workforce, and developing team cohesion to encouraging diversity and inclusion in in-house staffing there are many issues and goals to balance in order to properly manage the modern law department. The Law Department of Tomorrow discusses the above and more, shining a light on effective methods of managing a large and modern law department. With expert contributions from authors with experience of working both in and alongside in-house law departments, it contains invaluable advice on aligning a law department s strategy with its practice, to achieve success. The book opens with Paul Lippe, founder of Legal On Ramp, discussing the correct metrics to be implemented in the workforce to encourage change and boost performance improvements. The chapter addresses the challenges that arise in aligning lawyer performance with five key financial metrics, explores different techniques that can be used to successfully implement this approach, and describes what law firms can do to be better aligned with clients. In chapter two, Aileen Leventon, principal at Edge International, outlines how law departments can effectively implement Legal Project Management (LPM) as a tool for enhancing performance and adding value to their services. Aileen first defines the role of a legal department by its fundamental challenges, and breaks down this function into five questions (why, what, when, how, and who?) in order to maintain a v

6 Executive summary focus for LPM. Then, the four stages Intake, Planning, Execution, and Review through which all legal matters flow are run through in detail, and the varying tools for effectively managing them are outlined. Next, in chapter three, Mary E. Juetten, founder and CEO of Traklight, explores the greater scope for collaboration that is needed for a law department to stay successful. With an enhanced need for data analytics, performance metrics, and cyber-security measures, law departments must evolve beyond legal proficiency to incorporate expertise in technology and the digital space. Chapter four features Lucy Endel Bassli, assistant general counsel for Microsoft s Legal Operations and Contracting section, discussing how the front office in a legal department the actual lawyering work itself is now ripe for innovation, and explains that companies could learn from the efficiencies that have already been generated in the back office, including delegating tasks to other, more suited, professionals, and using basic technology to automate certain processes. In chapter five, Michael A. Ellenhorn, co-founder and general counsel of Decipher, discusses six key areas of risk for a law department; Advancements in Technology, Information Governance, Vendor management, Cybersecurity, Talent Management, and Ethics. Michael then moves into identifying future areas of risk, and suggests strategy frameworks for dealing with these risks by each area. Moving into chapter six, Ian White, who has been chief legal officer at a number of major listed and private companies, explains how the current legal department framework will need to change. Ian argues that there are too many lawyers as it is and believes that artificial intelligence (AI) will add to, rather than resolve, this problem. He ll demonstrate the importance of being a business person first and a lawyer second; of having a thorough understanding of the business and of ensuring that the legal team is fully integrated into business operations. Chapter seven features Paul Williams, partner at Shook, Hardy & Bacon, exploring an innovative and holistic approach to reducing exposure and legal spend. Through partnering with a carefully selected law firm, a law department can conduct a broad analysis of previous litigation experience and an in-depth risk assessment to help identify risks and potential strategies to reduce liability exposure. In chapter eight, Ken Callander, founder of Value Strategies, whose current clients include the largest companies in ride-sharing, money transfer and social media, explains how value-based pricing techniques will revolutionize the delivery of legal services creating efficiencies and vi

7 Building the Law Department of Tomorrow productivity savings for both corporate legal departments and private practice firms. Chapter nine features Katherine M. Lowry, director of practice services at Baker Hostetler, discussing the shift in dynamic that law departments will face at the hands of breakthrough technology such as AI and blockchain. Katherine explores the ways in which these advancements in technology will enhance relationships between legal departments and their external counsel, and provides examples of the impact new technology will have on these relationships. Chapter ten features Janvi Patel, founder and executive chairwoman of Halebury, envisaging the legal department of tomorrow, drawing on experiences she has gathered from establishing Halebury, a firm of external in-house lawyers. Halebury is a NewLaw pioneer in the UK designed to provide genuine flexibility to corporate legal departments in meeting their legal resourcing requirements. In chapter eleven, Nate Cemenska, Stephanie Corey, and Jon S. Hoak of Up-Level Ops, discuss methods of encouraging diversity and inclusion in law department staffing looking closely at existing programs that partner law departments with outside organizations to promote under-represented social groups into the legal practice. Lastly, in chapter twelve, Jay Hull, a consultant who helps lawyers thrive in the new and evolving operating environment for legal services, explores methods of cultivating the strengths and skills of each individual member of a law department; promoting collaboration and team unity. Jay argues that if a legal department wants to work toward eliminating waste, and enabling the team to achieve great results, it must start by taking full advantage of the abilities of members of the team and enhance their working relationships. vii

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9 About the authors Lucy Endel Bassli is assistant general counsel, legal operations and contracting corporate external and legal affairs at the Microsoft Corporation. Lucy joined the legal department of Microsoft in 2004, providing legal support to the central procurement organization globally and across all lines of business at Microsoft. She focused extensively on complex and global outsourcing contracts and gained firsthand experience in outsourcing by engaging an outsourced legal services provider (LPO) to assist her with high-volume contract transactions. She has launched a new managed services engagement with law firms and most recently moved into the office of the president to expand legal shared services and implement operational improvements. She oversees Microsoft s legal operations and a centralized contracting office, specializing in process efficiencies and automation. Prior to joining Microsoft, Lucy practiced law at Davis Wright Tremaine, LLP in Seattle, WA, focusing on commercial transactions and commercial bankruptcy. Lucy received her JD and BA from the University of Houston in Houston, Texas, where she grew up, but has been living in the Seattle area since completing law school. Lucy is a licensed member of the Washington and Texas state bar associations, and was named to the National Law Journal list of Outstanding Women Lawyers, She is a frequent speaker on topics of legal services innovation, legal technology and legal process outsourcing. Ken Callander is currently managing principal of Value Strategies LLC, a consulting firm that specifically works with corporate legal departments helping them get more value and predictability from their outside counsel relationships. His specialty is helping clients transition their engagements with law firms from the hourly fee pricing model to valuebased fee arrangements. For corporations this process not only provides better legal budget predictability while eliminating legal invoice review, but it also reduces total legal spend by an average of percent. His current clients include the largest companies in ride-sharing, money ix

10 About the authors transfer, social media and internet search along with multi-national conglomerates and the largest university system in the United States. Prior to starting Value Strategies LLC, Ken was the chief marketing officer and director of business development at Davis Wright Tremaine LLP, a 500-attorney international law firm and before that was an executive at Hewlett Packard in operations and marketing where he was considered an expert in the pricing of professional services. Ken graduated with a degree in Physics/Physical Sciences from Stanford University, is a Certified Pricing Professional (CPP) and lives in San Francisco. Nathan Cemenska, JD/MBA, is a former lawyer and business consultant focused on technology, analytics, and process improvement in the legal space. Previously, he operated the largest-volume solo consumer bankruptcy practice in the northern half of Ohio. Prior to that, he operated the United States most comprehensive online resource for election law analysis and authored one book and one book chapter on election law. Stephanie Corey is a co-founder of UpLevel Ops, a consulting firm specializing in providing services for in-house legal departments and law firms. UpLevel Ops provides a complete range of Legal Operations support, including IT solutions, Finance and Budget guidance, Talent Management and Development, Benchmarking, Best Practices and Metrics, and Outside Counsel Selection and Management. Stephanie is also a co-founder and former executive member of the leading legal operations trade organization CLOC, Corporate Legal Operations Consortium. She is a widely-respected veteran in the Legal Ops field. Most recently, Stephanie has served as the chief of staff and senior director of Legal Operations at Flex, which has a global legal department of more than 150 people in 15 countries. She has spent the better part of her career providing value-added services to Legal Departments, including building and deploying critical infrastructure to enable them to meet their business priorities. Stephanie s areas of expertise include Information Technology, Finance, Communications and Administration. Michael A. Ellenhorn, co-founder and general counsel of Decipher, is an entrepreneurial leader, lawyer, and solicitor (England and Wales, non-practicing), with more than 20 years of success building and strengthening professional services businesses, including 14 years in the international legal search space, operating businesses throughout Europe, the Middle East, North America and Asia. Prior to his career x

11 Building the Law Department of Tomorrow in executive search, Michael was a trial lawyer and legislative analyst in the US Senate. Michael is a frequent speaker and author on lateral partner due diligence, integration and the critical importance of utilizing competitive intelligence to mitigate risk in the talent space. Mr. Michael Ellenhorn earned his Juris Doctorate from Washington University (St Louis) School of Law and attended the Cass Business School of the City University of London for his MBA studies. Jon S. Hoak is a co-founder of UpLevel Ops. UpLevel Ops is a consulting firm specializing in providing services for in-house legal departments and law firms. UpLevel Ops provides a complete range of legal operations support, including IT solutions, finance and budget guidance, talent management and development, benchmarking, best practices and metrics, and outside counsel selection and management. Prior to co-founding UpLevel Ops, Jon served as executive vice president and general counsel of Flex from January 2011 through June Flex is a leading Sketch-to-Scale solutions company that designs and builds intelligent products for a connected world. With more than 200,000 professionals across 30 countries, the company provides innovative design, engineering, manufacturing, real-time supply chain insight, and logistics services to companies of all sizes in various industries. At Flex, Jon had global responsibility for providing legal support and directing legal operations. He also led the corporate security function and US Government Affairs activities at Flex. Previously, Jon was vice president and chief ethics and compliance officer at Hewlett-Packard (HP), where from 2006 to 2011 he oversaw the strategy and implementation of HP s ethics and compliance program, including adherence to HP s standards of business conduct. Jon also served from 1993 to 2006 as senior vice president and general counsel for NCR Corporation, where he was responsible for furnishing legal counsel services and directing legal operations for all global divisions of the company. He also served as general counsel of AT&T s Federal Systems Division, where he led a group of attorneys to support AT&T s provision of products and services to the United States Government. Prior to joining AT&T, Jon was a partner of the law firm Sidley & Austin, LLP and also worked for Heritage Communications, a cable television provider. Jon holds a Juris Doctorate degree from Drake University, and a Bachelor s degree from the University of Colorado, Boulder, where he majored in Psychology, History, and Political Science. xi

12 About the authors Jay Hull consults with law firms and in-house legal departments to help lawyers thrive in the new and evolving operating environment for legal services. After practicing for many years as a business transactions and technology lawyer, Jay was the founding partner of Davis Wright Tremaine s innovation initiative, DWT De Novo, and was the chief innovation partner at DWT until August During Jay s tenure as chief innovation partner, DWT De Novo won the innovative law firm of the year award from the International Legal Technology Association an unprecedented two years in a row (2015 and 2016) and an award from the Financial Times in Jay works to develop individuals and teams of legal professionals, improve processes, and implement technology tools to help create greater value for clients and greater professional satisfaction for lawyers. You can learn more about Jay s work at jaydhull. com. Mary E. Juetten, CA, CPA, JD is founder and CEO of Traklight, and has dedicated her more than 30 year career to helping businesses achieve and protect their success. Mary serves on the Group Legal Services Association Board and is an Access Advocate for LegalShield. In 2015, Mary co-founded Evolve Law, an organization for change and technology adoption in the law. She was named to the ABA s Legal Technology Resource Center 2016 Women in Legal Tech list and the Fastcase 50 Class of Follow her on Aileen Leventon is a business counselor to the legal industry and a practicing lawyer with over 30 years of experience. She consults with law departments, law firms and individual lawyers on strategies to manage and sustain sound financial performance and continuously improve the efficiency of legal work. In addition to advising, coaching, and training, Aileen has facilitated numerous after-action reviews of closed matters to promote buy-in of legal project management techniques. She has also been embedded in ongoing matters to provide analysis and coaching to bring distressed matters back on course. Aileen practiced law in New York City for nearly 20 years as an M&A lawyer at an Amlaw50 firm and a leading financial services firm. Now a principal of Edge International, she began her consulting career at PricewaterhouseCoopers LLP. Her work at PwC served as the template for the founding of the general counsel roundtable and current approaches to legal spend management and pricing. xii

13 Building the Law Department of Tomorrow Paul Lippe is a widely-cited author and speaker around the themes of innovation, metrics and knowledge management in law. Paul was at various times general counsel and senior vice president of business development and corporate marketing at Synopsys, an electronic design automation company. Paul was also CEO of Stanford SKOLAR, a medical digital library and e-learning company spun off from Stanford Medical School. A graduate of Yale College and Harvard Law School, Paul speaks and writes regularly about the New Normal in law, including at Prior to law school he was a special assistant to Senator Daniel P. Moynihan (D. NY) and was chairman of the Colorado Air Quality Control Commission. Katherine M. Lowry is currently the director of practice services for BakerHostetler LLP, where her responsibilities include providing strategic leadership and governance of the firm s information technology deliverables/services to five legal practice areas. While her role oversees knowledge management, training and integration of business applications, business process improvement, and the delivery of information/ research services, it also includes management of the newest legal innovation group, IncuBaker, focused on the integration of three major advancements: Blockchains, Artificial Intelligence, and Data Analytics. Katherine obtained her bachelor s degree in Political Science from Stetson University and her law degree from the University of Dayton School of Law. Janvi Patel is a NewLaw pioneer and has been spearheading operational, structural and cultural change within the legal services industry since starting Halebury in Her aim: to create an entirely original business model to service the needs of clients and lawyers at the senior end of the market. The firm now has partnerships with clients such as BT, Sky, and Virgin Media, a growing roster of clients in the TMT and FS sectors, a team of more than 30 senior in-house lawyers who provide flexible resourcing solutions as well as strategic in-house management support to FTSE 250 and SME businesses. Ian White has been the chief legal officer and/or company secretary for both listed and major private companies. This has led to developing an expertise in corporate governance and working with boards on effectiveness and performance. He has been involved in a number of board evaluations, both internally and externally. xiii

14 Ian now works as a consultant both on an interim and specific assignment basis. Over the last two years he has undertaken a number of board evaluations for FTSE 100/250 companies as well as for private organizations. In addition, in 2016 he spent six months as an internal governance consultant for a FTSE 100 International Bank working on board effectiveness and governance matters generally for the Holdings Board. He has also run a number of board facilitations. In the corporate world, Ian spent the majority of his time in the financial services sector (principally asset management) with roles such as group legal counsel/company secretary of Perpetual (listed investment manager), interim chief legal officer for Openwork Limited (formerly Allied Dunbar) and interim chief legal officer in the UK for Allianz Global Investors. In the latter role he also undertook a project looking at the effectiveness of the working relationship between the European Legal and Compliance Team (70 people) and the businesses it supported. He has also worked in other sectors and he was group general counsel/company secretary of the Wilkinson Group (privately owned retail group). Paul Williams is a returning contributing author and is a partner at Shook, Hardy & Bacon, based in Kansas City. He focuses his trial practice on complex litigation and trial practice management and partners with clients to create relationships that align client and firm interests to achieve better legal outcomes at exceptional value. Paul has received national recognition for his innovative use of alternative billing arrangements and strategic litigation management techniques, and he has extensive experience in commercial and products liability litigation for many types of product manufacturers and service providers. Paul collaborates with in-house counsel to customize portfolio and docket-wide programs to strategically manage the manufacturer s claims and litigation. For example, since 2004, Paul has managed the firm s role as Tyco International s (now Johnson Controls International) National Counsel of Product Liability Litigation, leading a team of SHB lawyers in a flat-fee partnership with the company. The American Lawyer noted the firm s representation of Tyco in its feature story on the firm as winner of the 2012 Product Liability Litigation Department of the Year Award. The ABA Journal also featured the program in an article titled Facing the Alternative, which highlighted the trusting relationship that exists between Tyco and SHB which is to credit for much of the success found under the flat-fee arrangement. The Association of Corporate Counsel

15 Building the Law Department of Tomorrow recognized Shook, Hardy & Bacon and Tyco International as inaugural ACC Value Champions for effectively driving value by cutting spending, improving predictability, and achieving better legal outcomes. Paul also leads Shook, Hardy & Bacon s professional development programming for strategic litigation management. He teaches client-focused philosophy, provides practical tools and techniques, and mentors colleagues to partner with clients to provide superior value in addition to exceptional legal services. Paul presents programs to other attorneys to promote a client-first philosophy and to share tools essential for successful strategic litigation management. xv