There tends to be a handful of law firms that get the bulk of your legal spend so use that to help drive better value from them, Stephanie Lamoureaux, senior director of legal operations at Live Nation, said in an Inside Voices podcast.
An RFP tool that includes a reverse-auction function can be useful in getting firms to take a renewed look at their relationship with the company and decide how much they want to compete for the business, she said.
“You’re helping to drive value by, obviously, the competition on pricing,” she said. “But it also puts firms on notice that they’re not the only show in town, so it makes them step up their game as well. It makes them more competitive in how they work with our team in the value they’re bringing.”
Even if you don’t have a formal panel of firms that you work with, most companies tend to give the bulk of their work to the same small number of firms, she said. Once you get a handle on which firms those are and how much you spend with them, you can have productive conversations with them about their hourly rate or whether they would agree to some kind of fee arrangement.
“I’m able to say, ‘Look, we’re expecting to send a lot more work your way next year,’ so it gives me the ammo to have a better negotiation,” Lamoureaux said on the podcast.
Setting a cap on rates based on the kind of legal work the firm does, how long it’s been working with the company, and so on, is another tactic.
“I negotiate based on role classification,” she said. “So … maybe they’re in year 5. My billing coordinator can look – x firm, year 5, this is what we pay – and if that’s what they submitted, good to go: Approve it and it’s done. It really reduces that administrative burden on the firms and my internal teams.”
Veteran legal ops chief
Lamoureaux started at Live Nation just three months ago but she’s been launching and managing the legal ops function at companies for more than 15 years, most recently at Block, the financial services company formerly known as Square.
The legal function at Live Nation has been operating without a formal operations team, Lamoureaux said, so she’s on what she calls a listening tour to learn what is working well in the legal teams of the company’s affiliates and divisions. The goal is to see where some of these well-functioning processes and systems can be applied elsewhere in the company.
“Is there a process at one team that works well that I might be able to mirror in some of the other legal division teams?” she said.
Because of the way Live Nation has grown over the years, the company has multiple legal teams, each with its own systems and processes.
“The entire legal function doesn’t actually roll up into the general counsel or corporate legal team,” she said. “There’s a benefit to that structure in that the business can move quickly and there’s more innovation, but from a legal ops perspective, it presents challenges.”
Lamoureaux said she’s trying not to overstep as the new person at the company.
“No one likes someone to walk in and start mandating change,” she said.
What works best early on is for the legal ops chief to find efficiencies that can be created from existing processes to create goodwill that can later be exchanged for budget resources to do the bigger-picture things, like implementing a contract lifecycle management (CLM) system.
“I could ask my general counsel and my finance team for dollars in my budget next year for a CLM,” she said. “However, I’m trying to approach it more strategically in that I know there’s a ton of pre-work that has to happen – centralizing contracts, harmonizing templates … so I ask instead just for dollars for an extra resource to help with all of that pre-work.”
From a finance perspective, she said, they see that pre-work as a one-time cost, so it’s an easier sell and then next year, should she ask for dollars for a CLM, the finance team will have more confidence legal operations is in fact ready to go for a major implementation.
“Once you’ve sold them on your approach, it’s a much easier process to justify the budget,” she said.
You can also build credibility by making cuts with double the power and, importantly, characterizing them in a way management can appreciate.
Lamoureaux touted the impact of saving attorney time. Not only do you cut actual costs but it frees up attorney time for more valuable work, so it’s perceived as having twice the effect.
“I find storytelling about time saved generally piques more interest in the leaders I’ve worked with than money saved,” she said. “I think that’s because, at the end of the day, time saved is also money saved but it’s also compounded.”