Starting the journey to future-proof your legal department and transform efficiencies can be challenging: where and how do you take that first step into transformation?
As discussed in our article Start with why, having a sense of purpose and a vision can be inspirational in starting your journey of change. But a significant next step is taking stock of the current situation and figuring out why changes need to be made and what those should be.
Lucy Bassli pioneered legal operations in Microsoft’s legal department, and is a firm believer in the classic trinity of operational thinking – people, process, and tools – and that legal departments need to take a detailed look at their processes and determine the weak spots before they determine the solution.
Having left Microsoft to work as a consultant, Lucy rejoined the in-house ranks as deputy general counsel in startup Snowflake Computing.
Here, Lucy shares how she started to look at this area 13 years ago and took the first steps in rationalizing the process of generating the large amount of contracts that Microsoft’s legal team deal with.
“I was a commercial transactions lawyer at Microsoft doing lots of M&A contracts. I realized that the sheer volume of work required a creative solution. There had to be a better way of getting all this done. I needed to take some risks and turn it into a process.”
With that in mind, Lucy started playing with the idea of what the right resourcing model might be, in terms of a mixture of full-time and temporary staff. But the key was that it had to be flexible. The answer was not merely to hire more people internally to cope with the volume, because it was taking so much time to manage them before anyone even got to working on the contracts. What was needed was a solution that could focus on the contract output without creating additional administrative and management work.
“I began by mapping and understanding our processes. I sat for a week with some lean six sigma professionals and we mapped the entire process Microsoft had around contracts. Lean Six Sigma is a managerial concept of combining the disciplines of Lean and Six Sigma.”
For those not familiar with these: Lean traditionally focuses on the elimination of the eight kinds of waste in an organisation. These are defined as: defects, over-production, waiting, non-utilized talent, transportation, inventory, motion, and extra-processing. Six Sigma seeks to improve the quality of process by identifying and removing the causes of errors and also minimizing variability in (manufacturing and business) processes. They should work together with Lean exposing shortcoming in process and Six Sigma aiming to reduce variation leading to a virtuous cycle of iterative improvements towards the goal of continuous process flow.
This was transformative for Lucy and her team: “That got us thinking about fundamental issues, such as what actually are our policies about contracts? Maybe we should do things differently? We considered self-help for the business, which would empower staff with templates and instructions they could use themselves.”
1) Outsourcing
The main objective was restructuring the resourcing model used by the legal department to be more efficient and cost-effective. The process of mapping how contracts were generated and dealt with culminated in outsourcing work in 2009 to Integreon.
“At the time, Microsoft was one of the first legal departments to do substantive contract review: considering how it worked, redlining, editing, and actually digging into the contracts and why they were being created; not just document review or traditional LPO work.”
Over time, the fledgling legal operations team at Microsoft iterated on that. “We began digging deeper and tracking all the metrics, volumes and turnaround times, and looking more at technology: using data visualization to track the operational flow.”
The use of the LPO model run by Integreon reduced the average turnaround time for legal review for contracts from three days to less than one, and the amount of contracts reviewed within the turnaround time increased from 86% to 99%.
2) Contract Life Management System
After the initial round of process review, rationalization and outsourcing, Lucy and her team looked to create further improvement by layering in automation and technology. “The concept of a contract life management [CLM] system came up, and that led us on the path of launching an enterprise-wide project management system. Integreon provided a CLM market overview and assisted in the RFP design and vendor selection process.”
3) Internal Helpdesk
As Microsoft is a global enterprise, investigating and redesigning the CLM system was a long project. During this, Lucy revisited the possibility of creating better help with the administration of documents – “so that 100,000 employees aren’t trying to do their own thing!”
“We created a global administrative help desk for our legal process for documents. Any time anyone in the company needed assistance finding, storing or retrieving a contract, they had somebody central to go to.” This service located stored contracts, found appropriate templates for new contracts, gave status updates for requests in progress, and handled updates to existing contract entries. It seems to be a success: “Integreon also runs this service and overall satisfaction scores have increased by 15%, and overall usefulness scores have increased by 13%, as measured through user surveys.”
Top tips for contract management process change
- Understand the existing process or processes inside out. This can allow you to identify weak points and inefficiencies – but also where things are working really well.
- Understand why and when contracts are being generated.
- Map all the different ways in which contracts are being generated and therefore the contract lifecycle.
- This allows you to understand and decide what needs to be in contracts and what doesn’t. Don’t measure this just by what has been standard practice. For example, does every engagement really need a detailed, negotiated contract? If not, then don’t automatically have that as part of the process.
- Consider where lawyers can be taken out of the process and a self-service aspect introduced. This frees legal resources for more interesting and strategic work.
Written by Dr Catherine McGregor for DLA Piper WIN.
