1. Business Process Innovation

2. Today’s Presenters Scott Rosenberg, Esq., CPA
Solution Group Leader, Corporate Legal Services
Dan Safran (Non-Esq., Non-CPA!)
Executive Vice President, Management Consulting

3. Definition (www.Wikipedia.com):
Business Process Innovation
Definition (
Process Innovation is the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more effective processes that are readily available to markets.
The robotics engineer Joseph F. Engelberger asserts that innovations require only three things:
A recognized need,
Competent people with relevant technology, and
Financial support.
However, innovation processes usually involve: identifying needs, developing competencies, and finding financial support.

4. Criteria for Selection of Areas Ripe for Process Change
Business Process Innovation
Criteria for Selection of Areas Ripe for Process Change
Highly relevant to issues facing the General Counsel and Managing Partner
Results readily apparent via cost savings and/or practice efficiencies
Solution readily obtainable
Transformative in nature

5. Clients Succeeding Through Process Innovation
Process Innovation Outcomes
Business Performance
Potential Improvement in
High
Missed Opportunities or
Fool’s Gold
High-Yield on Innovation
Low
Waste of Time,
Money and Effort
Interesting, But Doesn’t
Move the Needle
Firm and/or Company’s Ability to Execute /
Fit with Strategic Goals

6. Process Innovation Creates Value in Good Times and in Bad...
Value-Creating Actions
Reduce Net Investment
Improve Value
Increase Revenues and Profits
Decrease Operating Costs
Ways Business Innovation Enables Tactics and Achievement of Goals
Create New Services
Revitalize Existing Services
Drive New and/or Improved Profits
Modify Business Model
Modify Process Architecture
Modify Service Composition
Create New Advantages
Extend Existing Advantages
Disrupt Rivals

7. Legal Process Change
There are innovative process change opportunities relating to both the cost side of legal processes as well as the revenue/profit/value side. We will look at a few examples and case studies on each side of this equation.
“I believe that the legal industry is now operating somewhere in the Innovator – Early Adopter phases and time frame. The Early Majority phase has an additional 34% adoption, the Late Majority phase has an additional 34% adoption, and the “Laggards” picks up the final 16% of adoption.
William D. Henderson, a Professor at Indiana University School of Law and a Principal of Lawyer Metrics, LLC – The Forum on Legal Evolution, February 26, 204, New York City

8. Cost Areas Ripe for Legal Process Change
There are three major areas of process innovation we typically see clients being able to take advantage of…
Teaming – In-House/Outside Counsel Matter Collaboration
Converging – Preferred Provider Program Development
Rightsizing –
Legal Process Outsourcing

9. What? Why? Who? How? When? Teaming
Bringing In-House & Outside Counsel Together to More Efficiently Manage Matters
What?
Both the law department and their law firm(s) can deliver better and reduce costs by forging close working relationships
Why?
Typical processes and systems result in redundancy of effort, are costly to maintain, and cause version control confusion
Who?
The law department, with law firm assistance, should deploy systems allowing collaboration between the two organizations without redundancy of effort
How?
Leverage emerging and existing technologies to create virtual deal rooms/offices.
Adopt technologies hosted by vendors in the cloud; in particular, most matter management vendors offer a cloud-based solution. These solutions are accessible by more people outside the law department, are more secure in managing data, are more up-to-date in design and functionality, and are less costly to maintain.
Optimize the use of matter management software. Leading edge solutions provide the ability to request legal services, track progress against goals and budget, provide a graphical view of data across matters, and personalize security at the matter level.
When?
Most law departments already have or can readily upgrade their software. This transformative change is more an issue of getting senior management on both sides to require a change in process and positioning.

10. Success Story
Case Study #1: Global Manufacturer of Industrial Automation Equipment
It was determined that both the Law Department and their primary outside counsel were using the same system to manage intellectual property; much redundancy in effort and risk from uncertainty re version control
Law Department met with their outside counsel to change processes in order to benefit from a unified instance of one system, owned by the Company but managed by the Firm
Benefits:
Speed
Transparency
Improved client “stickiness”

11. What? Why? Who? How? When? Convergence
Reducing the number of law firm vendors to achieve economies of scale
What?
The law department has too many vendors it works with
Why?
This results in being unable to leverage relationship to achieve cost savings and economies of scale
Who?
The law department should develop a preferred provider program
How?
Improve relationships and delivery via a small, dedicated set of service providers
Map required outside legal services requirements
Develop screening criteria for a panel list
Develop and implement a panel counsel evaluation process and tools
Develop a monitoring and feedback process
Develop win-win pricing model
When?
Law departments can define and implement this by phases (by type of work, geography, etc.)

12. Success Story
Case Study #2: Large American Grocery and Food Product Manufacturer
When we think of “convergence” we tend to think of the DuPont Legal Model; but there are more indirect ways of achieving similar results…
When senior Labor & Employment attorneys retired, a decision was made to turn over day-to-day lawyering to a single firm. The Law Department left one person in place to supervise the work at a strategic level
The Law Department felt that not only would it save in labor cost, it would retain an entire team of true subject matter experts working on its behalf.
The Firm worked on a fixed fee basis with a sliding scale based on performance criteria set by the General Counsel and the firm’s Partner- in-Charge. Agreed to re-evaluate relationship yearly.
Estimated cost savings of $1.8M per year

13. What? Why? Who? How? When? Rightsizing
Making sure the right people do the right work at the right time
What?
Costs are too high and there is a need to ensure right people are doing right work at right cost
Why?
Law firm and law departments can lower costs of servicing by assigning tasks to those with less experience and/or costly to use
Who?
The law firm and law department should determine who (lawyers and staff) can execute using lower cost resources
How?
Lawyers need to map activities and tasks and apply costs (activity-based costing). Administrative management needs to map activities and tasks in the same manner.
Map the tasks to skills required
Automate work processes (first administrative, then legal) and apply BPM toolsets
Evaluate outsourcing of lower value-added tasks (both administrative and legal) via BPO models and providers; NOTE: lower doesn’t mean low
When?
While there are significant people and cultural sensitivities, senior management buy-in is required. Most organizations start with the lowest level administrative tasks, however, more value and cost recovery can be gained by starting with direct legal delivery opportunities

14. Estimated cost savings of $2.4M per year.
Success Story
Case Study #3: Fortune 100 Company’s Commercial Contracting Group
Launched an initiative focused on re-balancing work to achieve “right task, right skill”
Established secondments with a large, legal process outsourcing firm and established “of counsel” arrangements with former attorney employees to lower the cost of producing and managing contracts in areas of information technology and commercial and SEC agreements
Pushed more work to paralegals and insert admin assistants into workflow processes.
Estimated cost savings of $2.4M per year.

15. Cross Selling Opportunities
Revenue Areas Ripe for Legal Process Change
There are three major areas of revenue/value-based process innovation we typically see clients being able to take advantage of…
Cross Selling Opportunities
Rate Rationalization

16. What? Why? Who? How? When? Cross Selling Opportunities
Identifying multi-service opportunities via onboarding of new matters
What?
Law firms continue to leave money on the table by not effectively cross selling clients
Why?
Law firms can increase revenue per client and lower costs of sales
Who?
Lawyers can better collaborate in cross selling activities
How?
Firms need to develop a “cross selling” culture and lower barriers to client access
Law firms need to change work processes – for instance, to think and work to identify multi-client opportunities. Example is to both look for cross sell opportunities or to seek identification of other internal services
Technology can be leveraged to identify possible cross sell opportunities – for instance, taking on of a real estate matter should spur automated notification of finance practice and even identification of other clients who could benefit
Not all opportunities need to involve matter-based advisory services; the General Counsel often looks to her closest firms to provide professional development and legal updates for her team
When?
Culture is the hardest to change and may require mandates and incentives (stick and hug)

17. Success Story
Case Study #4: Mid-Sized Regional Law Firm
Management committee adopted a “cross sell” initiative and cross sell incentive program. They identified cross selling as one of their “top 5” strategic initiatives and are hiring laterals messaging these goals
The Firm’s board of directors developed a standard process to encourage and partially mandate minimum $ goals for all partners/associates
Firm developed procedures for proactive identification and information capture in their NBI process
The firm developed unique automation to mine the data from NBI, their CRM and the accounting system to tag new matters and cross reference to the firm’s business lines, to automatically notify PGL’s of a set of discrete, possible cross sell opportunities. This opportunity notification is also sent to the relationship partner, billing partner, etc.
The firm is currently tracking the gained benefits and reported an additional $20M in revenues after the first 9 months

18. What? Why? Who? How? When? Rate Rationalization
Better informed pricing opportunities to drive a higher client/matter win rate
What?
Law firms continue to be under siege relative to competitive pricing and deal sizes
Why?
With understanding of price points, comes an opportunity for strategic pricing
Who?
Lawyers and management can make better deal-based decisions
How?
Firms need to develop processes to understand competitive prices and pressures to take advantage of strategic pricing and relationship opportunities
Companies like TyMetrics and PLA are collecting and using industry pricing benchmark data to provide firms the means to better understand the market place and to, iteratively, position strategic deal opportunities
Corporate law departments are actively pursuing this same type of data analytics from an in-house counsel perspective
When?
The ability to take advantage of market and pricing data levels the playing field and allows innovative firms to build barriers to entry and barriers for client exit

19. These efforts are focused on both work volume as well as rates
Success Story
Case Study #5: Global 50 Law Firm
Practice group leaders have been evaluating internal data and historical delivery costs to “productize” certain legal services. The firm is also looking at TyMetrix as a 3rd party source to augment its own data baselines in support of “predictive analytics”
Not just for eDiscovery, when properly employed, predictive analytics focuses on the “causes of effects” rather than the “effects of a cause.”
These efforts are focused on both work volume as well as rates
The firm is implementing processes to capture real-life delivery results to provide “realism” into total delivery costs and to validate and update the above
Using a combination of both efforts and rates, the firm is defining innovative pricing solutions that are based partially on anticipated delivery costs and partially on value based pricing

20. Consistent Themes
Common characteristics of legal organizations who innovate, include:
A strong senior management team that advocates for and encourages measured risk taking
An embracement of change (this is not easy or widespread today!)
A culture of passion, ambition and drive
An acceptance culture vs. a culture of blame
A strong leadership and management organization to mentor lawyers and staff and value the failures – and to use them as learning experiences
Providing repeated opportunities for idea generation and openness for people time investment for the delivery organization to identify and analyze the ideas
Public recognition and other incentives based on innovation successes
An unwavering focus on process baselining, metrics and regular measurement of results
An understanding of the the business application of technology to support process innovation

21. Questions & Answers
Please contact us directly should you like to discuss more…
Scott Rosenberg, Esq., CPA
Solution Group Leader, Corporate Legal Services
(312)
Dan Safran
Executive Vice President, Management Consulting
(312)