In-house legal teams take the lead on speed and spending

When Computer Sciences Corp and HPE Enterprise combined in April, the head of the merged in-house legal team faced a daunting business problem. William Deckelman’s team at the new company, DXC Technology, would be handling a large increase in the volume of contracts — then 5,000 at CSC and 25,000 at HPE Enterprise.

On top of that, developments in the industry meant this volume was set to double again.

Mr Deckelman, formerly general counsel at CSC (below), adopted a strategy in response that was genuinely transformative, in the true dictionary sense of involving a complete change.

The IT sector is at “an inflection point”, says Mr Deckelman. “We are seeing much smaller deals but a higher volume of them.”

He set about making a fundamental change in how the contracts were processed. He used ContractRoom, the contract management platform of UnitedLex, a managed legal services provider, and connected it with the Salesforce platform used by DXC. This involved redeploying 200 lawyers and contract professionals from DXC to UnitedLex.

“What I really like about [what we have done], is that for our people that have careers ahead of them, this is about digital, about transformation and what I call legal 2.0,” says Mr Deckelman.

Importantly, the shift also automated the contract cycle right through from when deals are negotiated to when they are signed and implemented.

Larry Stack, senior vice-president for global sales, says there is a strong competitive advantage for DXC in getting the contracts behind the transactions completed quickly, while still assessing risk intelligently and then managing the contracts when they are in place. The DXC team’s new approach improves this process, and new business wins have increased from 64 per cent to 84 per cent.

Mr Stack says: “I could not see how [Mr Deckelman] could do it. But this was true automation and innovation. Never before would I have thought of legal as an enabler.”

Achieving transformational efficiency is a strong theme among US corporate law departments in this year’s North American Innovative Lawyers report. The team at IBM has been instrumental in helping IBM Watson Legal, its artificial intelligence business aimed at the legal profession, to develop a product that will help big businesses manage their legal bills.

While conducting about 100 workshops for corporate law departments and law firms, IBM Watson Legal heard that the biggest complaint of clients was the cost of external counsel. “We found that lawyers designated the wrong task codes between 30 per cent and 40 per cent of the time on their bills to clients,” says Brian Kuhn, co-founder of IBM Watson Legal. The anomalies meant in-house lawyers were spending time manually checking legal bills that they could otherwise devote to billing strategies or spotting trends in spending patterns.

Mr Kuhn developed Outside Counsel Insights, an artificial intelligence tool that can analyse structured data, which can be easily analysed, and unstructured data, which are harder for software to decipher, in external counsel bills. The tool can spot which law firms have anomalous bills and which are not in compliance with the client’s billing guidelines. “We have saved one client almost $400m — 33 per cent of its annual outside counsel [costs] just by getting the billing right,” says Mr Kuhn.

The IBM Legal team members added insights from their own roles as legal service purchasers in developing the tool and have played a central role in developing the cognition business of IBM more broadly.

I could not see how he could do it. Never before would I have thought of legal as an enabler

Although it is not the only billing tool available, IBM Watson Legal claims its product makes significantly larger savings for companies with repetitive legal spend. “There is so much financial waste in [company] law departments and not enough technology to get a global view on outside counsel and what they do that works — or not,” says Mr Kuhn.

Other legal departments have also picked up this baton. In a push to reduce spending on external counsel, the in-house legal team at GE has developed a web-based application called Select-Connect that gives GE’s lawyers better data for selecting outside counsel. It provides real-time analysis of GE’s preferred law firm, including past spending, negotiated rates, diversity of teams and how colleagues have already rated the firm in the past.

This tool, combined with a triage team in Cincinnati, and the appointment of a new strategic pricing director, has helped shave off $100m in legal spending over a year.

“Lawyers are having to adjust to a world where the use of data and analytics to inform decision-making is an expectation,” says Dan Hendy, associate general counsel at GE.

“Before, you might have talked to a friend to get information on external counsel . . .  But now we rely on data so much more.”

WINNER: William Deckelman

Executive vice-president and general counsel, DXC Technology

As the general counsel of DXC Technology, the newly combined entity of Computer Sciences Corp and Hewlett Packard Enterprise’s IT services division, the task facing William Deckelman was — and still is — daunting.

His challenge was to automate how his business managed the contract cycles for its outsourcing deals, from negotiating a sale to closing it, to then managing the contract once it is in place.

However, he firmly believes that the managed services arrangement he concluded with UnitedLex is the future of legal services. Unfortunately, corporate law departments, even in top technology companies, struggle to win investment in their businesses and stay efficient in the way they deliver legal services.

Therefore, third party providers become critical enablers of legal teams. “When you think about crowdsourcing, you can see this is the way people will work in future,” says Mr Deckelman.’’

Matthew Galvin

Global legal and compliance director, AB InBev

Clients and colleagues alike describe Matthew Galvin as one of those rare lawyers who combine ability to be commercial without compromising on risk. Having held roles at Freshfields Bruckhaus Deringer, Herbert Smith Freehills and Hogan Lovells, he manages compliance for AB InBev globally. After its $100bn acquisition of SABMiller last year, he led the compliance integration, which involved developing a system using AI to identify, flag and prioritise risk.

Michael Levine

Executive vice-president and general counsel, Local Initiatives Support Corporation

As the long-serving general counsel of the Local Initiatives Support Corporation, a Community Development Finance Institution, Michael Levine has helped develop many new methods for the organisation to secure financing, including creation of a new asset class for CDFIs. He has helped enable LISC to finance projects that revitalise communities and bring greater economic opportunity to underserved areas across the US.

Meaghan McGrath

Chief counsel, International Finance Corporation

Working on a range of transactions globally, she has facilitated significant breakthroughs in development finance, such as the world’s first “forest bond ”, helping the IFC to become a global leader in international and private sector investments to end extreme poverty and boost shared prosperity in developing countries.

Nicola Port

Senior vice-president and international counsel, Global Legal, Chubb Group

Nicola Port leads the Chubb Rule of Law Fund, the first in-house fund of its kind. As legal counsel for the global insurance business, she noted that a company that sells promises cannot operate without the rule of law. She has facilitated grants totalling more than $800,000 to rule of law projects globally and has helped develop the first rule of law fellowship with the University of Pennsylvania Law School and the United Nations Development Programme.

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