With a potential recession looming, legal teams could find themselves under the gun to cut costs, so it’s important for operations pros to let the broader business know what’s in their control, what’s not, so efficiencies can be championed that won’t damage the team’s core function, specialists said in an In-House 2022 webcast.
“I can’t control the number of lawsuits that get filed against the company, so I try to talk about the things we can control,” said Scott Wandstrat, deputy general counsel for litigation at Kindred at Home, a healthcare provider. “When we get sued, how long does the lawsuit go on? Were we able to get in with early case assessment and handle the case appropriately? Have we found outside counsel that have aligned with our values in terms of how we want to handle the case, or are they going to spend a lot of time on discovery disputes? Because when it takes longer, it’s going to cost more.”
There might be a tendency among in-house lawyers to want to spread legal work to as wide a range of outside firms as possible, but from the operations side it can be more valuable to stick with a firm that has invested the time to be a partner.
“It’s more efficient when [outside firms] train up their associates, do repeat work and really understand your business because they’ve done it over and over again,” said Amy Sellars, senior legal counsel for eDiscovery operations at CBRE, the commercial real estate investment giant. “I had one woman show me her associate training playbook for my company. That has incredible value.”
A partner that will take the time to train an associate on your business is a rare find because that’s typically not how they like to spend their time.
“There’s that … incentive in law firms for partners not to train associates because it’s not time they can necessarily bill for,” said Wandstrat. “There’s this sink or swim approach [they take with their associates].”
Handling litigation in-house
Bringing more work in-house is typically one of the first things teams will do to save money, but it’s crucial if you do that to not undermine the effort by letting your lawyers get bogged down in the administrative functions that come with litigation.
“You hire a lawyer and they’re capable of doing so much … but they don’t delegate,” said Sellars. “That says to people, ‘We don’t need support staff.’ Now you’re way overpaying for that work.”
To push those costs down, you can take the same approach you take with outside firms: make it clear you only want to pay charges that are appropriate for the level of work they’re doing.
“Don’t let a partner do associate work and don’t let an associate do paralegal work,” said Sellars. “And don’t let anyone but clerical people do clerical work, and don’t bill me for it. So, I want the same thing in my law department. If I’m paying you a lot of money for your legal acumen, that’s what I want your time on.”
If a lawyer is spending too much time on administrative work, it’s okay to put the burden on the legal ops person to help solve the problem.
“Raise your hand and we’ll figure out how to get that work off of you and over to the right timekeeper in my organization,” Sellars said.
Probably the biggest efficiencies could come from billing for all the one-off questions in-house lawyers get asked by the broader organization but that’s not easily tracked and quantified, so it’s more important to tell the right story about this type of below-the-radar service.
“I meet with the general counsel every other week,” said Wandstrat. “Before that meeting I put together an agenda and the first item on the agenda is wins. It can be anything: We were able to resolve a matter early. We were able to do something and avoid litigation. We worked on this initiative and it got a breakthrough. We were able to get involved in some business operation and help in a positive way.”
The more concrete the story the better.
“There's that famous guy who said we should consolidate billing,” said Sellars. “Like, if we could consolidate billing, we could save millions a year. Nobody listened. He had it on paper. He had done the math and it was beautiful.”
But it wasn't until he made it concrete that he got his point across.
“How did he do it? He had some guy go buy one pair of every type of glove that was bought by all the different facilities and he put the price tags on them and he dumped them on a table, so there’s this visceral appreciation. You pick up a pair of gloves: this one is $3.99. You pick up one that looks the same and it’s $17.99. How many of these do we order every year?”
“Sometimes it isn’t just the metrics,” she said. “It’s how you tell the story and, frankly, that’s what lawyers should be great at. We’re advocates and were supposed to tell really good stories.”