In 2017, Avis Budget Group Inc. brought new meaning to the term “convergence,” which in legal circles means the consolidation of a law department’s outside counsel roster.
The legal department at the company, headquartered in Parsippany, last year completed a process that reduced outside counsel from 700 firms to seven, making headlines in the process.
Corporate Counsel, a Law Journal sibling publication, reported that the effort was part of a company-wide revamp that included the law department. The department’s leaders, general counsel Michael Tucker and chief securities counsel Bryon Koepke, brought on consultant Trevor Faure, a former in-house lawyer at Apple and elsewhere, and others to assist in the effort, which ultimately reduced annual legal spend 33 percent for 2017 in comparison to 2015, Corporate Counsel reported. The revamp also meant hiring six new in-house attorneys to the law department, which was determined to be understaffed, according to the report.
The group of seven law firms now engaged by Avis Budget, chosen from some 140 applicants—Reed Smith; Dentons; Littler Mendelson; Baker, Donelson, Bearman, Caldwell & Berkowitz; Eversheds Sutherland; K&L Gates; and Bryan Cave—are handed specific work based on parameters such as area of law or geography, and the firms, in exchange for such exclusivity, offer discounts, the report said.
Aside from making headlines, Avis Budget also was recognized by the Association of Corporate Counsel for its convergence efforts.
Tucker told Corporate Counsel: “We’re looking forward to the next two years of contract negotiations. In putting together the rates for this current contract, we had to take in a lot of assumptions. This time around, we don’t have to assume anything because we have the data, real data, as a basis to use going forward.”
Koepke added, of the new hires: “We were able to build a business case to increase internal headcount. In-sourcing the legal work, we were able to save a lot, several millions of dollars. The numbers were so big, it was pretty much validating in and of itself.”
Tucker has been with Avis Budget since 2010. His efforts have not been limited to cutting legal spend. Also last year, he spoke on an ACC panel about his approach to legal operations, according to another Corporate Counsel report. Tucker warned of focusing solely on cost in building a legal operations unit: “That cost-driven model drives you to do things that are detrimental to your core mission, which is to provide good legal counsel,” he said.
**Avis Budget didn’t respond to the Law Journal’s questionnaire, sent after Legal Departments of the Year winners were announced earlier this year.**