Professionals in our field are becoming familiar with the concept of the “legal ecosystem,” a term that conveys relationships shared by corporate and other clients, outside counsel and third-party service providers.
In viewing these relationships as an ecosystem, perhaps the biggest “environmental concern” is the misalignment between ever-increasing budget pressures in corporate legal departments and law firms striving to remain profitable in a highly competitive market.
As one of the leaders of the NetApp legal team, I have seen the significant benefits of applying innovative and bottom-line approaches throughout the legal ecosystem. These include better utilization of in-house talent, more collaborative and mutually beneficial relationships with outside counsel, higher morale across the board and a notable reduction in annual outside legal expenditures.
So, what concrete steps can we take to put this new philosophy into practice?
Establish management and collaborate
Budgets are tight, and the cost of outside counsel has led many corporations to hire full-time legal operations professionals (more about that trend at http://bit.ly/1fC7X6M.) This specialized management role is designed to run the legal department more like a business. Think of the role of Brad Pitt’s character, Billy Beane, in “Moneyball”—someone who knows the game inside and out, and who can identify and solve inefficiencies that others may not even see.
Successful legal operations must collaborate closely with outside counsel. Open communication and the sharing of information provide the most practical and fruitful path to innovation. At NetApp we conduct periodic business reviews with outside counsel. The meetings are focused on identifying bright spots and pain points in the working relationship. Achieving symbiosis in the legal ecosystem requires that we have these critical conversations.
Adopt new technology
Technology that didn’t exist just a few years back has created new opportunities to make the legal ecosystem leaner and more efficient. One game-changer is the active collection and application and transparency of data. NetApp has been using analytics software that allows us to benchmark outside counsel against our own set of firms and firms providing similar services, revealing where they stand in terms of value alignment. We openly share this data, which allows us to make program and budget adjustments where necessary. The purpose is not necessarily to reduce or divert budgets, but rather to maximize the output of our resources that in the end benefits all.
Factor third-party service providers
Today the legal ecosystem includes new players—from startups to established vendors— that focus specifically on providing efficient services and helping legal operate more like a business.
In evaluating your legal spend, I encourage you to again think like Moneyball’s Billy Beane: Where are the inefficiencies? You will likely find that there are routine or low-risk projects that don’t need to be handled by a firm at all.
We are making progress, but there is much that can be done to break free of entrenched inefficiencies that continue to feed the misalignment between corporations and outside counsel.
I encourage you to join the many legal professionals working to improve our industry. There are five major Legal Operations Consortium groups that have been in existence for many years in New York, Chicago, Houston and Northern and Southern California.
Firms, corporations and third-party service providers must first be open and willing to recognize the potential of change, adopt new management and technology and have the critical conversations to realize the many benefits of cultivating the legal ecosystem.