Eversheds Consulting
World class management services
for in-house legal teams
Paul Smith, Partner
©Eversheds Consulting 2011. A division of Eversheds LLP.
Eversheds LLP – Eversheds Consulting
One of the largest full service law firms in the world with
over 4,326 people including more than 560 partners and
almost 2,500 legal advisers
46 offices in major cities across Europe, the Middle East,
Africa and Asia
Relationship lawyers – pioneers of partnering in the
legal market
Providing control over costs - championing the cause
closest to clients’ hearts. Practising proactive legal and
risk management: prevention not cure
©Eversheds Consulting 2011. A division of Eversheds LLP.
Eversheds LLP – Eversheds Consulting
Eversheds Consulting – A team of lawyers, certified
project managers, auditors, IT and marketing specialists
which delivers tailor made solutions to legal departments
Drivers of change – experience of outsourcing
and off-shoring
©Eversheds Consulting 2011. A division of Eversheds LLP.
Cost centre to profit centre
Re-aligning your legal team to achieve success
Today’s environment for Legal Departments:
– Budgetary pressures
– Drive to achieve more for less
– Search for optimum effectiveness
– Focus on added value
– Outsourcing pressures
– Showing the value of internal teams
With the above in mind, this presentation can help move
your teams move from a cost centre to a profit centre
©Eversheds Consulting 2011. A division of Eversheds LLP.
Cost centre to profit centre
Steps to success – giving you the tools
Analyse the effectiveness of your internal team
Reducing external costs
Working efficiently through project management
Developing cultural change
Integration of legal and business units
Identifying revenue streams
Profitable legal department
©Eversheds Consulting 2011. A division of Eversheds LLP.
Your legal team
Re-aligning to achieve success
Review of internal department
Process mapping
Focused KPI’s linked to objectives/strategy for the team
Benchmarking
Clear management information relating
to financial performance
Monthly reporting on KPI, strategy
and legal spend
©Eversheds Consulting 2011. A division of Eversheds LLP.
Our processes
©Eversheds Consulting 2011. A division of Eversheds LLP.
Legal Work – Cost/Risk/Quality Matrix
The starting point
©Eversheds Consulting 2011. A division of Eversheds LLP.
Process analysis
RECOMMENDATIONS
Improved
Inputs from
the business
A gatekeeping process is
necessary to keep a check
and balance on the inputs
from the business, which
drive the negotiation process.
Introducing this new step in
the process and ensuring its
implementation will drive
efficiencies throughout the
rest of the process by
reducing the level of rework
and administrative burden
placed on the negotiators by
inaccurate and incomplete
information.
No
Is info
received accurate
& complete?
Gatekeeping
Yes
Accurate and full
information
Negotiators
receive full
accurate
information
©Eversheds Consulting 2011. A division of Eversheds LLP.
Reduction of
admin burden
and rework
Process maps
Incomplete and
inaccurate information
received by legal team
Currently done by
negotiators. Transfer
responsibility to admin
team?
No unique identifier
for cases transferred
between systems
©Eversheds Consulting 2011. A division of Eversheds LLP.
Delays in starting and
considerable rework required
due to missing or incomplete
documentation
Process maps
The team has
automated much of
this workflow to
produce TMA within
2 working days
Missing a step for
the allocation
process
We recommend that
this task is done by
the admin team
©Eversheds Consulting 2011. A division of Eversheds LLP.
Missing a
‘gatekeeping’ step
which checks
documentation is
correct
Benchmarking
CURRENT PROCESS
BL
ING
EC
II
EH
DOR
ESC
NR
TR
NI
PI
CL
BAU
IR
70
60
50
40
30
20
10
0
Firm Firm Firm Firm Firm Firm Firm Firm Firm Firm Firm Firm Firm Firm Firm Firm
Comparison of negotiation times between 2004 and 2006
Surveys. Median percent by time bucket*
20
18
17
20
100
15
2004
10 10
10
10
10
2006
10
7
5
< 30
days
86
76
80
5
60
30-60
days
60-90
days
90-180
days
6-9
months
9-12 > 1 year
months
©Eversheds Consulting 2011. A division of Eversheds LLP.
20
0
100100
78
2004
2006
46 48
26
5
3
90 92
66
40
5
2
0
Cumulative mean percent of agreements executed
by given time buckets*
10
33
17
< 30
days
30-60
days
60-90
days
90-180
days
6-9
months
9-12
> 1 year
months
*Source: International Swaps and Derivatives Association www.isda.org
(ISDA Master Agreement Negotiation Survey
The legal department – metrics
Steps to success
Business
strategic
level
$ Exposure
Budget
$ Legal spend vs budget
©Eversheds Consulting 2011. A division of Eversheds LLP.
Offshoring/outsourcing
High
Billing rates (£ per hour)
High
complexity
Moderate
complexity
Skill set requirements
High
Low
complexity
Low
©Eversheds Consulting 2011. A division of Eversheds LLP.
Low
Onshore LPO Bristol Paralegal Support
Title
Hourly
price
Monthly
rate
FTE rate
per annum
Paralegal
£20
£3,200
£35,000
Offshore LPO Lawyer Support
Title
Hourly
price
Monthly
rate
FTE rate
per annum
Junior Lawyer
(India)
£16
£2,600
£31,000
Senior Lawyer
(India)
£25
£4,000
£47,000
Junior Lawyer
(Philippines)
£19
£3,000
£36,000
Senior Lawyer
(Philippines)
£29
£4,500
£55,000
Working efficiently
Project management of legal work
Service excellence means that for all client matters,
we must be able to say YES to all of the following:
We scoped the matter fully; understood key issues;
agreed expected outcome with the client
We agreed a written fee quote, including scope of work
and assumptions which must be reasonable
We controlled costs, updated client as appropriate, agreed
revised scope of work and constantly revised fee quote
Updated client as to progress
Obtained feedback
©Eversheds Consulting 2011. A division of Eversheds LLP.
Working efficiently – “DealTrack”
Project managing your success
©Eversheds Consulting 2011. A division of Eversheds LLP.
Reducing external costs
Getting value from your external law firms
20**
Panel reduction process
Existing firms
Firm
Firm
Firm
Firm
Implementation of [* *] Legal Model
20**
New
external
panel
H.O.
Communication to business
Firm
Create jurisdiction panel firms
Firm
Firm
Firm
Firm
Firm
Review historical work with non-panel firms
Firm
Firm
Firm
Introduce invoice validation management system
and global measuring against budget
Firm
Firm
Firm
Commence use of matter manager for new matters
Asia
Firm
Firm
New matters only to be instructed to panel firms
by legal team
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Implement instruction protocol to panel firms
Implement value added strategy
General contractor model
©Eversheds Consulting 2011. A division of Eversheds LLP.
Europe
Firm
N. America
Firm
Firm
Case studies
©Eversheds Consulting 2011. A division of Eversheds LLP.
Case study 1
The DuPont Legal Model
“is an integrated approach for managing change within the
law department and for continuously improving how legal
services are provided to DuPont businesses in terms of
quality, cost and efficiency”
Founded on strategic partnering
Requires ongoing re-engineering of work processes
Focus on the bottom line has led to cost effective and
client-centred legal services
350 to 40 law firms in US, UK, Canada and Mexico
Total savings exceed $75 million
©Eversheds Consulting 2011. A division of Eversheds LLP.
Case study 2
To achieve significant cost reduction and improve
legal representation Tyco held a competitive tender
for its legal needs in EMEA
Gap analysis of internal resources and external needs
Eversheds replaced 285 existing law firms in EMEA and
seconded lawyers to Tyco
Legal costs reduced by 30% and Eversheds
reappointed after two years
©Eversheds Consulting 2011. A division of Eversheds LLP.
Case study 3
Demonstrating value of legal team
with key metrics?
Case study: FTSE 100 Company
Online business survey with faceto-face interviews. Benchmarking
of legal team value to business
units, as well as strategies for
legal/business protocols
Result: Report suitable for sharing
with wider business showing legal
team value, and identifying areas
for improvement
©Eversheds Consulting 2011. A division of Eversheds LLP.
Proving
value
Before
 No way of showing
team’s value
 Under pressure
from wider business
 How to adapt to
needs of business?
After
 Financial &
Customer
validation of team
performance
 Identified
improvements for
next stage of
evolution
Case study 4
Managing
spend
Insource v outsource
Case study: Fortune 500
manufacturing multinational
Eversheds Consulting was
approached to analyse and assess
existing legal management and
risk and compliance functions
over 39 jurisdictions
Result: Provision of detailed
breakdown of £6m legal spend,
enabling benchmarking of internal v
external legal spend and convergence
programme of legal panel
©Eversheds Consulting 2011. A division of Eversheds LLP.
Before
 No processes
 no decision
criteria
 ad hoc
After
 sophisticated
decision tree
 risk/quality/capacity
assessment applied to
different work areas
in different ways –
rigidly applied
Case study 5
Reducing
spend
Managing internal teams
Case study: FTSE 50 financial services
Engaged on a legal spend and process
engineering project – the starting point
being the wholesale banking legal team.
Eversheds Consulting were responsible
for delivering process improvements,
optimal team structures, data integrity
and quality checking, as well as
team KPI’s
Result: We achieved a 32%
reduction in the team caseload
as part of the project
©Eversheds Consulting 2011. A division of Eversheds LLP.
Before
 No KPI’s
 No MI
 No regular
meetings
 No clear
strategy
After
 Focused KPI
linked to
objectives/strategy
 1:1 and
team meetings
 Monthly reporting
 Clear strategy
The challenge of contract management
Getting the value from your contracts
Maximise the value of your
in-house legal work
Manage your suppliers
effectively
Reduce your risks
Reduce your costs and get
full value from your contracts
Make your legal team
profitable – recoveries
©Eversheds Consulting 2011. A division of Eversheds LLP.
Contract
Management
Lifecycle
The profitable legal department
Achieving the ultimate goal
How to create a revenue stream
Identification of legitimate claims that
otherwise might be missed
Money on the table which is not picked up
Proactive management of transactions, agreements,
patents and other contracts to discover wrongdoings.
Eg warranties and indemnities in M&A
Not a Litigation Programme
But needs a cultural change –
proactive not reactive
©Eversheds Consulting 2011. A division of Eversheds LLP.
Case study 6
A legal recovery is defined as:
“any recoupment in the form of cash (royalty payments,
settlements and adjustments), products, services or other
quantifiable rights obtained for a company or its affiliates,
through the intervention by legal professionals beyond a
normal business transaction”
DuPont have recovered $1.6 billion since it started its
programme 5 years ago
©Eversheds Consulting 2011. A division of Eversheds LLP.
Not simply obtaining a favourable settlement
Capturing value in contracts
35% outside US
DuPont 2009 recoveries by cases






©Eversheds Consulting 2011. A division of Eversheds LLP.
Commercial/Contracts $248.9 million
Intellectual Property $60.4 million
Bankruptcy/Collection, Commercial/Sourcing $16.9 million
Trade/Customs $7 million General Torts, Antitrust, Pioneer
Trade/Antidumping $941 million Solae $659 million
<1%: Insurance $492 million; Tax $240 million; Environment
$114 million; Corp. Securities $77 million
Action
Evaluate litigation history and define profit and loss
Implement structured programme between legal,
finance and business units
Educate and inform on the possibilities, eg:
– Supply contracts
– Over-billing
– Power cuts
– IP/Licensing fees
Establish a programme to assert legal rights
Change the culture
Communicate success
©Eversheds Consulting 2011. A division of Eversheds LLP.
Developed to meet challenges faced by in-house teams
Legal spend
and legal
management
Environment,
health and
safety
Helping your
department to
generate income
©Eversheds Consulting 2011. A division of Eversheds LLP.
International
records
management
Eversheds
Consulting
Risk
and
compliance
Global
corporate
secretarial
Recoveries
Paul Smith
Paul is a Partner, environmental lawyer
and litigator and has defended a number
of multinational companies over the years
in relation to criminal investigations in the
UK, Europe and North America. The
investigations have ranged from chemical
plant explosions, insider dealing, railway
disasters and price-fixing to environmental
incidents and other major crises.
Paul is a recognised expert on law firm
partnering and convergence. He began
developing this expertise as client partner
for DuPont more than ten years ago. In
recent years Paul has focused on how the
law firm and the global corporate law
department can work together effectively
across multiple jurisdictions. Paul consults
with many global corporate law
departments on their structures, processes
and practices to derive greater value from
outside counsel. He is part of the
©Eversheds Consulting 2011. A division of Eversheds LLP.
Eversheds team involved in the Tyco
convergence project
in Europe, Middle East
and Africa, where Tyco
used its innovative 'SMARTER' model to
consolidate most of its outside legal
services from more than 250 law firms
across 37 jurisdictions to one: Eversheds.
In February 2008, Legal Business
magazine honoured Paul Smith as 'Lawyer
of the Year', one of the most prestigious
awards in the UK. He was awarded for his
pioneering work in delivering new
approaches to global client relationship
management. Paul was also included in
'The Lawyer' magazine's list of the 'Hot
100 Lawyers' for 2008.
Paul Smith
+44 845 498 4464
paulsmith@eversheds.com
©Eversheds Consulting 2011. A division of Eversheds LLP.