LEGAL
The 2014 Serengeti Summit theme this year was Breakthrough, and the summit proved once again to be a smashing success, including intriguing speakers, lively learning sessions, client panels, networking, and of course the famous Golden Cheetah awards given out to the best and brightest legal departments. A record amount of legal departments came to beautiful Seattle (though Seattle's old friend, rain, did make a steady appearance) to learn and share leading practices of running legal departments. The following are the top five takeaways from this year's conference:
The theme is "Breakthrough", not break in. The Summit got started with the keynote speaker, Egil "Bud" Krogh, a former Nixon administration official and head of the White House "Plumbers" that broke into the Watergate Hotel, which eventually lead to Nixon's resignation as President. Bud is a frequent lecturer on the topic of legal ethics and the need for integrity in decision making. Bud gave an excellent presentation on how bad choices can be made and how people can ethically avoid making these choices in their jobs and life. He also shared the story of how Nixon met Elvis and how he got Elvis a (real) badge from the Bureau of Narcotics and Dangerous Drugs. Oh, the irony.
Convergence isn't what you do to get on the highway. One clear trend that emerged amongst the legal departments at the conference was law firm convergence. Convergence is a concept that has been talked about much more than it has been put into practice over the years (AFAs, anyone?), but this year there appears to be a real shift away from talking about it and toward implementation. During a panel with four leading legal departments (three of which had gone through a convergence in the last couple of years) moderated by Bernadette Bulacan, the question was asked to the crowd, "How many of you have or are planning a convergence of your law firms?" Roughly one-third of the hands went up, with many more expressing an interest in learning how their legal departments could do the same. There were several reasons given for this trend: volume discounts and negotiating power with firms, firms having focus and concentrated knowledge of a company's business, better predictability of legal costs, and ease of collaboration with firms. This represents a sea change from a few years ago, where only the most sophisticated legal departments enacted this type of program with their firms.
Churning is for butter, not legal bills. A main theme throughout the conference was the pressure faced by legal departments to control legal spend and billing practices of their outside counsel. The memory of invoices with a total and a single line item – "For Services Rendered" – is still a recent memory for many. Even more recently, legal departments were receiving invoices that have first year associates taking ten hours for a two hour task and large invoices that came out of the blue. Assistant General Counsel Jim Sullivan of FMC Technologies made clear in his presentation that this is no longer acceptable. Budgets for all major matters are now commonplace. At FMC, they track both the law firm budgets per matter and the overall internal legal department budget side-by-side to see how their law firms and the legal department are doing against budget. Firms that know they will have to explain themselves if they go over budget tend to (surprise!) control legal billing much better than firms that feel they have free reign to "bill at will" without restraint. Mr. Sullivan also noted that this leads to much better forecasting of legal costs, which helps keep their partners in finance happy as well.
Law schools should really start teaching math. Thought to perhaps be the last professional bastion of those solely liberal-arts-major types, law is coming (perhaps kicking and screaming) into the age of data and metrics. Two of the most popular break out sessions at the conference focused on reporting and analytics. Why? One of the ongoing effects of the "Great Recession" is that legal departments no longer get a free pass on spending and costs from the C-suite and finance. This means that not only do GCs need good reporting to manage the company's legal work, assess risk, and manage in-house attorney workloads, they need to be able to generate reports that show the value of the legal department to the C-suite, and provide budget, accrual, and forecasting information to finance.
Furthermore, analytics provide "Big Data" perspective that better inform a legal department as to what other companies are paying for similar legal services, what areas of law other, similar companies are spending their legal dollars on, and what firms charge for similar services across geography, amongst other data points. Benchmarking data is a tool that is increasing being used by legal departments and is quickly becoming an essential management tool for in-house counsel. Pass the pivot table, please.
The zoo just got really wild. After all of opportunities to learn and network, the Summit moved on to the celebration of those departments that have shown the most sophisticated legal department operation management – the Golden Cheetah awards! The participants were spirited away to a secret location to experience the Serengeti up close. That's right, they went to the zoo! Characterized by the shameless antics of the MCs and presenters, the Golden Cheetahs didn't fail to surprise and entertain. Let's just say, at one point the entire crowd was singing the chorus to "Don't Stop Believing", a couple pairs of pants went missing, and a presenter was suspected of taking advantage of a recently passed Washington State law.
The real show, however, were the departments that achieved such tremendous success in the past year. Elementis won Rookie of the Year for their quick implementation and advanced use of the Tracker reporting engine. Third place went to CA for their advanced integrations, use of budgets and accruals, and taking a meticulous approach to achieving their goals. Second place went Darden, who reduced reporting time by half and expects to save over $600,000 this year. Finally, first place went to Harsco, who implemented budgets on every matter, cut down their invoice payment time by half, and performed a convergence of their firms from 400+ firms to 5 in the U.S. These legal departments are truly amazing and gave everyone in attendance ideas and inspiration to take home to their own departments.
Patrick Johnson is currently a Senior Marketer for Serengeti Law who writes and speaks on legal department management and technology. As a five-year veteran of Thomson Reuters, Pat previously served as an Account and Implementation Manager where he consulted a portfolio of more than 190 corporate law department clients on legal department management using Serengeti's Tracker matter management and e-billing system, as well as consulting clients on-site and conducting trainings and seminars nationwide on the best practices of the top legal departments worldwide. A graduate of University of Virginia School of Law, prior to joining Serengeti, Pat served as a corporate M&A attorney for five years. Prior to law school, he worked as an IT consultant and financial analyst in California.
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