the smarter legal model - in-house community · great, faure’s the smarter legal model is the...

Trevor Faure, Partner Global Leader, Legal Services EY Global [email protected] / +447802 595053 Linkedin: uk.linkedin.com/pub/trevor-faure/88/725/110/ Executive Lawyers Thought Forum Macau, 2014

The Smarter Legal Model


What’s On Your Mind, Asia Pacific? •  Who are the ultimate clients? •  How to measure the performance and value of the Legal

Department? •  Should Contract Management and/or Compliance be within Legal? •  Centralised vs. Decentralised Legal Teams? •  How to resolve conflicting objectives and KPIs •  Should I link Legal Department performance to company

performance and if so, how? •  How to measure problems and costs avoided •  How do I assess and predict resourcing needs? •  How to measure and improve Internal Headcount Quantity •  How to measure and improve Internal Headcount Quality •  What talent training should Law Firms provide? •  What are the key strategic points in managing External Counsel?


Modern In-House Counsel. The Day Job....

• Leader of people • Wise and trusted counsel • Statesperson • Salesperson • Psychologist • Business analyst • Surrogate judge • CLO - Cheap Legal Officer • Project manager • Keep-Out-Of-Jail-er • Coach • Conscience • Executioner and • Best friend.

• To all people. • At all times. • And increasingly across an equally-disparate range of cultures, languages and time zones. • Infallibility is essential. • Only the omniscient and omnipotent need apply.

No pressure then.


MO

RE

LESS

Headcount

Net Cost – including legal fees,fines & business losses

Legal Coverage – essentials and enablers

Compliance

Client Satisfaction

Working Smarter


Coverage Compliance

Client Satisfaction

Head Count Net Cost (incl. legal fees, fines & business losses)

Working Smarter


CoverageCompliance

Client Satisfaction

InternalHead Count

Net Cost (incl. legal fees, fines & business losses)

As defined by stakeholders (C-suite, shareholders, internal clients, regulators, legal staff, customers, etc.).• The Essentials - substantive legal work product: contracts, transactions, litigation, licences, policies, corporate governance, subject-matter specialisation, advice, negotiation, drafting, etc.• The Enablers - execution of legal operations: business involvement, management of external counsel, training of clients, FAQs, processes, knowledge management, legal research & education, administration. budget management.

Adherence to all applicable laws, regulations, third-party rights, codes of professional practice, contracts, licences and performance of all related obligations.

As assessed by clients.Key Performance Indicators such as: contract turnaround times, meeting project deadlines, successful litigation / dispute outcomes, responsiveness, expertise, clarity & precision of drafting & advice, proactive support & training, client empowerment, alignment with business objectives, user-friendly work product (templates & processes, etc.).

Full-time equivalent legal staff employed including non-qualif ied support staff and contractors.

• The cost of Internal Head Count and external legal services, law f irms, expert witnesses, outsourcing, knowledge/matter management systems.• The cost of failure: e.g. contract liability claims, unfair dismissal compensation, regulatory f ines, civil / criminal compensation, legal cost awards.


Measuring, Managing and Improving Anything: common sense applied to objective data


Coverage: does the Legal function actually have a list of the essential legal work and responsibilities agreed with the stakeholders? [250 leading legal departments, May 2013]

57%

43%

No Yes

66%

34%

No Yes

Essentials - substantive legal work product: contracts, transactions, litigation, licences, policies, corporate governance, subject-matter specialisation, advice, negotiation, drafting, etc.

Enablers - execution of legal operations: business involvement, management of external counsel, training of clients, FAQs, processes, knowledge management, legal research & education, administration. budget management.


Coverage: to what extent does the internal & external Legal function cover the legal essentials and enablers for all stakeholders in all jurisdictions? [250 leading legal departments, May 2013]

Under 25%

25% - 50%

50% - 65%

Above 80%

22%

20%

27%

11%

Cov

erag

e

% of Legal Departments


Compliance & Net Cost: how many serious compliance incidents have occurred during the last six months (i.e. those resulting in significant penalties/legal fees)? [250 leading legal departments, May 2013]

None

1 - 5

5 - 7

Over 10

34%

54%

7%

5%

Num

ber o

f Com

plia

nce

Inci

dent

s



What is the level of Client Satisfaction with the Legal function (self-estimated or surveyed)? [250 leading legal departments, May 2013]

1 - 2

3 - 4

5 - 6

6 - 8

9 - 10

1%

8%

18%

54%

19%

Sat

isfa

ctio

n R

atin

g ou

t of 1

0



Head Count: does the Legal function have an adequate level of staffing? [250 leading legal departments, May 2013]

Yes

No

27%

73%



Net Cost: the level of external legal spend is.... [250 leading legal departments, May 2013]

too Low

just right, Goldilocks!

too High

unknown, to be honest

18%

25%

44%

13%



Coverage: 50% Compliance: Several incidents

Client Satisfaction: 7/10

Head Count < X


> $Y M

Average Performance of 250 leading legal departments Measured & Analysed: the False Economy Model


Coverage 25% to 80% Compliance: 500% GMI improvement

Client Satisfaction: 3/10 to 9/10

Head Count X


$Y M – 30%

/

Improvements achieved under The Smarter Legal Model


“Faure offers a set of tools to help reduce costs, increase legal coverage, improve compliance, and increase client satisfaction. More ambitiously, he casts aside the traditional, often fraught, commercial relationship between law firms and their clients and replaces this with a species of partnership arrangement, under which the business interests of the in-house lawyers and their external advisers are much better aligned”.�Professor Richard Susskind from “The End of Lawyers?”�

www.uk.practicallaw.com/about/morefromless

“Like Malcolm Gladwell’s Tipping Point and Jim Collins’ Good to Great, Faure’s The Smarter Legal Model is the rare book that will be read with equal interest and appreciation by both practitioners and academics. It is destined to become an important part of any conversation about the role of law and lawyers in the global economy.“�Professsor David B. Wilkins, Harvard Law School�

“He shows...the holy grail of business productivity... Bursting with ideas, his book is a "must read" for business people and the lawyers who work with them.”�Ben W. Heineman, Jr., Former GE Senior Vice President for Law�

Video: see Bloomberg TV: Modernising legal services & Law Firm Business Development or The American Lawyer – The Smarter Legal Model�

the smarter legal model - in-house community · great, faure’s the smarter legal model is the...

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