When Abhay Nadipuram was hired in November 2020 as Care Initiatives’ first in-house lawyer, his task was to build a legal department from scratch for the nonprofit company, the largest owner of healthcare facilities in Iowa with 43 properties, most of them nursing homes.
“I was starting from ground zero,” Nadipuram, the company’s chief legal officer, told Legal Dive.
His first order of business was to get a contract management system in place, but a close second was getting a handle on legal spend, much of which went to a single law firm.
“My preference was to reduce legal spend by negotiating rates and bringing in-house a lot of functions that were outsourced and then, frankly, reducing a lot of the work that was being sent out to outside counsel unnecessarily,” he said.
To help him get a contract management system up and running, he hired a paralegal to shepherd the onboarding process.
“We looked at about five products and landed on Evisort because of its AI capabilities,” Nadipuram said.
Evisort created a folder for each of the company’s 43 facilities and the paralegal’s job was to keep everyone on task.
“Some facilities had all their contracts in an organized fashion and we were able to get everything, and some sent us, like, two documents,” he said. “We knew we would have to just get to a point where we said, ‘This is what we think we have, and we’ll go with it.’”
To populate the database, each facility scanned its contracts and uploaded the PDF to a designated folder. The software then extracted the information from the PDF so it became data that can be sorted, tracked and searched.
“We didn’t have to [do anything] individually with the PDFs,” Nadipuram said. “Evisort’s AI was able to take up that information, read the document and get all of the data out of it, and then we could go in later and clean up the titles.”
Legal ops chief hired
Shortly into the process, Nadipuram made his second hire, a legal operations chief. The new hire took over the CLM onboarding process, freeing up the paralegal to help on the department’s other initiatives, including reducing legal spend.
“Within several months we had picked a product, onboarded it and, by that point, brought on our manager of legal operations to own that and anything else we needed to manage in the future,” he said.
Reducing legal spend
Nadipuram divided legal spend into two buckets. The first was outside-counsel work that was unnecessary, either because it didn’t need to be done by a lawyer or the legal work could be handled in-house. The second bucket had to do with outside rates that were too high.
Nadipuram found lots of areas where outside counsel were doing work they didn’t need to.
Every time there was a workers’ compensation matter, for example, it was sent to outside counsel for what the firm called legal oversight.
“There was no one here to really say whether that was necessary,” he said. “So, whether it was a litigated matter or not, we had a lawyer involved, and that was just unnecessary.”
The company already had on board third-party administrators to manage workers’ compensation claims for it, Nadipuram said, so he asked the companies to handle the oversight that the firm used to do where it made sense.
“If a lawyer is not involved on the other side, we don’t necessarily have to have a lawyer involved,” he said.
The company also had outside lawyers investigate whenever there was a fall or other accident at one of its facilities.
“Outside counsel would hop in the car and go to almost every incident that occurred,” he said. “We didn’t need to do that, because we have a director of risk management who can monitor those events and we should really be empowering our folks out in the field to investigate those matters and then report those matters up. We can then assist with matters that are more high risk, so we eliminated that.”
Outside counsel were also involved whenever an employee submitted a health records request.
“You can imagine with a company like ours that has about 2,800, 2,900 people on an ongoing basis, we get a fair number of records requests — 300 to 400 a year,” he said. “That’s something that our paralegal has really taken on.”
Contract review is now handled in-house, too.
“That’s something I wanted to own,” he said. “During my time here I’ve reviewed hundreds of contracts, a critical function of an in-house department.”
He still goes outside on contract matters if he thinks it needs a second pair of eyes.
“Maybe I would get assistance from outside counsel to chime in if it was a high-value contract that I felt I needed help on, but that was something we brought in-house,” he said.
The second bucket for reducing legal spend focuses on rates. Up until that point, the company largely paid whatever its main outside firm charged, something Nadipuram stopped by replacing the one firm with a panel of firms, each of which brought a specialty to the company.
“That was where we could really leverage some of my connections,” said Nadipuram, who was vice president and legal counsel at the Iowa Hospital Association before joining Care Initiatives.
“These were lawyers I knew well and was comfortable with,” he said. “I was able to negotiate better rates with them.”
The company’s long-time firm ended up not joining the panel.
“That is the choice of outside counsel in these situations, and I respect that,” Nadipuram said. “We have done well ever since then and that didn’t really hurt our ability to provide outstanding legal services to the company.”
Now two years into the job, Nadipuram said, he’s reduced legal spend by 60% – and without having to hire another lawyer. His legal team today is him, the paralegal, the legal operations manager and the head of risk management, an existing position that was folded into the new department. He also has a part-time person to spearhead the company’s diversity, equity and inclusion (DEI) efforts.
The company’s compliance operation remains outside the department but he meets with the head of that monthly as part of a cross-divisional team.
“As you can imagine, a lot of matters cross our paths, especially being in healthcare,” he said.
In his two years building the department, he undertook a number of initiatives. The new CLM and legal spend cuts are just two of them, but those two he thinks are among his biggest contributions.
“From a standpoint of building a legal department, what I’m proud of is our ability to reduce our legal spend and organize our records,” he said.
It will be up to another head of legal to take the new department to its next level, Nadipuram said; as of early November, he was preparing to return to the Iowa Hospital Association as its new chief legal officer, where he’ll help the group advance the interests of the state’s 118 hospitals.
“The general counsel retired and the CEO asked me to come back, so I’ll do legal affairs, government actions and communications,” he said. “So, l’m very excited about that.”