For five years, the Law Department Operations Survey has tracked the changing role of the LDO manager. Back in 2008, those who held the position were just seeking a seat at the table and recognition for their value to the legal department. Fast-forward to 2012, where most respondents to this year’s survey say they are involved in strategic initiatives that reach far beyond legal.

“This speaks to the increasing value that LDO managers bring to their organizations,” says Brad Blickstein, principal at the Blickstein Group, publisher of the survey. “One impact is the evolving relationship between LDOs and other corporate functions. A vast majority of LDOs interact with HR, IT and Finance on at least a weekly basis.” The chart below illustrates that emerging dynamic.

A group of LDO managers and industry experts met recently in Washington, D.C., at ILTA’s 35th annual educational conference ( to review these and other findings from the survey. During the roundtable, the group discussed a wide range of issues, from their strategic role within their organizations to the ongoing work of e-discovery, the growing reality of purchasing goods and services through the procurement department, leveraging metrics and reporting, and relationships with outside counsel. Participants shared war stories and described best practices, as they continue to assert the importance and relevance of LDO managers throughout their organizations.

Strategic Initiatives

David Cambria, senior director, enterprise information management at CDW and chair of the LDO advisory board, points to the increasingly visible responsibilities that LDO managers have outside the law department as one of the most intriguing results from this year’s survey. Asked, “How often are you involved in corporate (outside the legal department) strategic initiatives?” 86.5 percent of respondents answered “often” or “sometimes” (see Chart 1 above).

For Julie M. Richer, legal department technology program manager at American Electric Power, “BYOD,” — bring your own device — is a corporate-wide concern with which she is increasingly becoming involved. With the growing proliferation of smartphones and tablets, “I’m at the table where we are actually writing a policy right now, and it will be a corporate policy specifically about personal devices,” she explains. “For years, we’ve stood firm that employees cannot put work information on their personal PC. This is worse than PCs, because smartphones and tablets and other devices grow feet a lot faster.”

IT, records and legal at Hess Corp. are working closely on several initiatives, according to Charlotte Riser Harris, manager, litigation support. The initiatives encompass records management, information governance and cleaning up servers. “We’ve got a good collaboration going between records, IT and legal. It’s sometimes a struggle, but we are making good progress because we do have that three-prong approach,” she says.

Frank Orzo, president of LT Online, offers the real-life example of an elevator company that was leveraging legal-specific information to minimize risk and cost. The company’s legal department noticed a large number of slip-and-fall claims near elevators and escalators at department stores. When they drilled down into the data, they saw that many of those slip-and-falls happened near perfume counters. Parents or guardians would apparently let go of their children’s hands or become distracted trying on perfume and cologne, and the children would run to the escalators or elevators and fall. With analysis, the legal department realized those situations were leading to more claims.

“This company was able to go back to some of their retail customers and tell them, ‘If you move the perfume counter away from the escalator, we will see fewer claims,’” he recounts. “That was an innovative way to take information that the legal department had and use it to avoid business disputes.”


The rise of the e-discovery manager is another trend that grows more pronounced in this year’s survey. More than half of respondents, 55.3 percent, reported having someone dedicated to that role (see Chart 2 below).

These companies recognize the value of having an internal point person to manage various complexities in the e-discovery process, according to Kevin Clem, senior director at Huron Legal, a part of Huron Consulting Group, “They are no longer just relying on outside legal counsel to manage the process. They are hiring discovery process managers to oversee the work of their firms and vendors, streamline their processes, and leverage alternative pricing models. Some have even built their own in-house collections teams supplemented by discovery vendors to provide a baseline of internal resources to support the initial data gathering.”

For Riser Harris of Hess, bringing more discovery work in-house has been a thoughtful, deliberate process. Her company has purchased a tool and hired someone to oversee the collection, but the company has no plans to handle the e-discovery work entirely within the legal department. “It’s an iterative process,” she says. “We’re talking about baby steps. We have a directive to do this, but it’s a different world. We want to be careful to not overstep and get ahead of ourselves.”

While culture and concerns about risk cause some companies to proceed slowly, budget limitations also represent a challenge. The Wendy’s Company is taking a long-term approach to bringing a limited amount of e-discovery work in-house, according to JoAnn Fair, manager, legal technology. She’s the singular liaison between IT and Legal when it comes to electronic data discovery. “But my grand plan over the past three years has been trying to secure the right people in IT who I can always call and ask for what I need to have done,” she says, adding that she wants to eventually acquire an in-house tool for at least some of the collection and develop master service agreements with several trusted discovery vendors. “I think that will be probably more valuable than trying to add on extra people in-house to handle e-discovery.”


Metrics and Reporting

Roundtable participants also discussed ongoing efforts to leverage the value of metrics and reporting systems. Less than two-thirds (60.9 percent) of survey respondents with a metrics program say they make effective use of the information their program provides (see Chart below). Cambria points to a common scenario among LDO managers who generate reports that attorneys specifically ask to see but that no one ever looks at.

Convincing attorneys of the value of the information that resides in the system has been effective for Lisa C. Girmscheid, legal administrator in Rockwell Automation’s Office of the General Counsel. “It’s not always necessary to use reports to find information,” she says. “Answers can be found within data stored in matter screens or by using a simple query. When it’s necessary to go beyond these basic steps, the reporting system can provide a higher level of analytics. Delivering a stack of reports isn’t effective — stick to generating reports about the important factors to avoid ‘report overload.’

“Another way to maximize the benefit of the system is to take paper-based processes and automate them,” she continues. “As an example, we removed the outside counsel evaluation section from our post-matter evaluation paper form and moved it to our matter management system. We used the same factors and rating system, but now we can view and report this data electronically rather than track on paper or in a spreadsheet.”

Kris Satkunas, director of analytic consulting at LexisNexis CounselLink, suggests focusing more on reports and information that explains why something happened, rather than just what happened. “You want to be able to get into the drivers of whatever the issues are that your legal department is facing,” she says. “If you’re not digging underneath it to peel back the onion, you are not going to effectively be able to use it.”

Closing matters and including information about the disposition of each matter are a focus for AEP’s Richer. Now that attorneys are entering that in the system, she is trying to encourage them to provide even more matter-specific data. “We’ve started to add fields about the type of disposition, final amounts and settlement. We’ve added about three fields, and we are going to make them required,” she says. Richer has managed to convince attorneys to complete those fields by showing them how little time it takes, and how it will enable the legal department to demonstrate its value to the company.


Participants also discussed the increasing presence that the procurement department plays in working with legal department operations.

“It’s a big issue,” observes D. Mark Poag, senior vice president of legal, marketing and strategic alliances at Datacert. “Legal department operations managers are concerned about using the procurement department, particularly with the selection of outside counsel.”

So it doesn’t reach a point where the procurement department dictates which outside counsel can be hired for a particular matter, some legal departments are developing requisitioning processes and applications. Then they can show those to procurement as a way to answer questions and alleviate concerns.

Containing outside counsel costs remains a top priority for LDO managers. According to the survey results, using cheaper law firms, e-billing and aggressive rate negotiations ranked as the most effective cost-containment options, while respondents ranked alternative fee arrangements and quick-pay discounts as only somewhat effective, or not effective (see Chart below). “Are we heading towards diminishing returns in squeezing outside counsel?” Blickstein asked participants during the roundtable. “And if that’s the case, what do we need in order to turbocharge the returns in terms of reducing outside counsel spend?”

Some roundtable participants report more success with AFA initiatives through service providers, rather than law firms.

A logical starting point for AFA initiatives would be with document review providers, suggests Riser Harris.
“Document review providers track the hours their attorneys are spending on review and how much they are paying the attorneys. They know exactly what it would cost if it were an hourly rate instead of a per-document rate, for example.”

Fair says that in one case, a Wendy’s Company outside vendor explored a review of costs for technology-assisted document review, then compared that with what a manual review would have cost. “That was extremely helpful. We could extrapolate from there what other cases might be like. Definitely for larger cases the technology for this review is going to be much less expensive and probably a lot more accurate.”

Difficulty measuring the true cost savings of AFAs has hampered their more widespread use, according to several participants. “It’s great to know that this is how much something will cost, so you know there is not going to be a surprise,” says Richer. “At the same time, you’re always questioning whether it would have been cheaper had we done it another way.”

Shadow billing is one way to measure the cost-effectiveness of AFAs, but that approach can also be problematic. Shadow billing can change the incentives for law firms and affect how they are managing work, even if it is unconscious on their part. “It’s the law of unintended consequences,” explains Clem of Huron. “Requesting shadow billing suggests there is some level of uncertainty that the client is getting a fair deal. Rather than focusing on efficiencies and doing the work in the best way, law firms often feel the need to justify the fee through the shadow invoice, and this changes the efficiency incentive. It goes to the question of defining what success looks like for an AFA. If you define success as hitting the exact same amount of a fixed fee arrangement through a shadow invoice, that changes the game. Success should be a great outcome or managing to the scope that the firm and the client discussed upfront.” AFAs make the most sense when they benefit both the firm and legal department, says Orzo. “You’ve got to keep reaching for the good and it will come to you.”