Richard Caruso, VP, ALM LLC – MODERATOR
Jeff Franke – Yahoo! Inc
Connie Brenton, Senior Director of Legal Opps, NetApp, Inc.
Steve Harmon, VP and Deputy GC, Cisco
George Milionis – GC, Petersen-Dean, Inc.
[My comments in brackets]
Steve: The legal department is there to make sure that they can build and sell their products. Here’s their model of what stays in and what goes out. They are not price sensitive to mission critical activities, but there’s not a lot of “bet the farm” litigation. And high competition for it.
Connie: A lot of the work is coming back in-house, but not mission critical, but mission critical to the operations of the company. Firms need to be creative for the repetitive work.
Jeff: Yahoo! has huge legal opps teams. There is an evolution within legal opps. The model is changing. No longer selling to the person you have the relationship with, as in the “old” days,” but as they get more sophisticated in how they buy legal services. [talking legal procurement, people. LISTEN up]
Talking the lock-step rate increase. Long story short, you are forcing the work in house as the legal budgets are NOT increasing. They are looking to partner on new pricing models [are you LISTENING??].
George: They had a big litigation issue in CA, so they looked at creating a law firm within the company. And, well, yeah, they did. Not just low impact, PI cases, but high-stakes litigation. Brought 90% of the litigation in house. Brought in technology, use contract lawyers, and they cut legal spend by seven figures.
Connie: They are at the tipping point. We will see drastic changes into the function of the GC office within companies.
Jeff: Within the next few years you will see corporations bring pricing people onto their teams. Price is important and critical. For the critical matters where lawyers bring great value, $1000 or more/hour is not a problem. It’s the fat in the system [expensive offices) that is driving up rates. They are not looking for law firms to not make a profit, but, come on already.
Steve: They pay for the outcomes. They don’t want to pay for the input. It doesn’t fit their business models, and doesn’t make sense to them. The firms that win their business have a sense of what they want to achieve, and can define the options available to them [HELLO, this is the JOURNEY MAPPING we worked on in the CMO Summit]. Successful firms have a project management mindset. All of their outside lawyers go through project management training [shout out to Legal Lean Sigma … do it!!]
Connie: Once they understand how much something should cost, they will move to fix fee.
Steve: One of the key things that he and his department are measured on is predictability of the budgets they address.
FIXED FEES. FIXED FEES. FIXED FEES.
Jeff: Disagrees to an extent on the input. He does care. [and he and Steve will have a chat after the panel]
Steve: As they outsource their work on deals, they understand that they sub-contract. They expect their firms to do the same.
Connie: Collaboration is going to move the market. The change management in their roles is extreme, and you will see it accelerate.
Richard: Looking at how technology is affecting their organizations.
Jeff: It’s going to depend on the company. Electronic billing is critical. They are still trying to get their arms around the numbers and the data. Yahoo! is looking at business process automation (getting back to efficiency and cost processes). If they have a process that is broken they look to automate it.
Connie: Dashboards are new to in house. They need to run their departments as a business. #2 tech is “how can they run their departments more efficiently.” IF YOU KNOW ARE BUSINESS YOU ARE FAR MORE VALUABLE (yes, I am shouting). #3 Electronic signature.
Steve: Talking AI, because that’s the buzz. The principle opportunity for AI is to access information without the judgment. They want to make it much easier to get to the information they need. They need to get their hands around the data. #2 – they need to compare the value of a known value v. an unknown value.
Jeff: Corporate Legal Operations Consortium (CLOC) is a new organization where they are collaborating. [Think LMA for in-house lawyers].
Heather: What about the rate increase letters: the language is dictatorial, no phone call, arrogant, after the time they have set their budgets. To quote Connie, “This will stop.”
George: If it’s an increase for an increase, they will bring the work in house.
Steve: Show him how you are 6% better, have 6% value. If just because someone is moving up in a firm’s hierarchy, not his problem. The minute they can jettison you, they will.
Connie: Doesn’t think the law firms understand the administrative nightmare rate increases brings to them in house.