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NewLaw Paradigm: Contract Management
6 February 2014
2
THE PRESENTERS
Jason McQuillenHead of Managed Legal Services at radiant.lawExperienced commercial contracts lawyer who has worked extensively in-house as well as in private practice. Leading the charge at radiant.law to invent how to support portfolios of contracts in smarter ways.
David R. ChamberlinHead of Legal Services at Cognia LawFormer US transactional lawyer who has successfully managed major contract management Legal Process Outsourcing engagements from a variety of offshore and nearshore jurisdictions for Fortune/Global 500 companies. At Cognia Law, David is responsible for the design and delivery of client services.
EXECUTIVE SUMMARY
3
• Part 1: The Legal Executive Challenge and End-to-End Support
• Part 2: Resourcing, Process and Technology
• Part 3: Pricing and Value
• Part 4: Case Studies and Closing Thoughts
4
PART ONELEGAL EXECUTIVE CHALLENGE AND END-TO-END SUPPORT
STRATEGIC OBJECTIVES
5
Demonstrating Value
Legal
Sales
Business
Finance
Procurement
Skilled lawyer
Reducing cost of delivery (BTL)
Reduce risk / loss of margin
Contribute to value of service (ATL)
Gatekeeper Position Evolving Expectations
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Knowledge
Management
Content Manage
ment
Performance
Management
Legal Process Manage
ment
TAPPING INTO THE ECOSYSTEMNewLaw is structured to provide expertise and systemic service support into core functional contract management areas
Traditional Law Firm: High-End Ad Hoc Advice
NewLaw
Design
Production
Triage
Review and negotiation
Execution and
storage
Ongoing manage
ment
Continuous improvem
ent
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Examples• Legal Spend• Risk
Management• Efficiency/Speed
Examples• Self-Service• ATL Value • Remedies• Analytics
CONTRACT LIFE-CYCLEProviding Value At Each Phase
Below-the-Line
Above-the-Line
NewLaw
DESIGN
Maximise revenue
- No benchmarking- Minimum term- No right of set off- PCG
Minimise cost
- Service description- Flexibility in delivery- Exclusive licence v ownership- Limit liability
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Focus on P&L
TRIAGE
9
Categorising Work
Legal Front Door
Client LegalNewLawProvider
ClientBusiness
External Firms
Higher-value / strategic Low value /
risk
complexity
BAU – extended bandwidth
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Hand-
Off
Performance
Termination
• Change Management and Contract Performance Enablement critical
Pre-Award
Feedback
• Performance Playbooks
• Contract Management Plans
• Informed Re-Negotiations
MANAGING CONTRACT PERFORMANCELegal can drive value through better integration with implementation teams
11
PART TWORESOURCING, PROCESS, AND TECHNOLOGY
12
BLENDED SHORINGUtilising a blended shoring paradigm that is geographically tailored and fully integrated
Optimal balance between• Labour Arbitrage• Talent• Volume
U.K. Law Department Client
U.K. Law Firm Front Office
OnshoreCommercial Lawyers
South African Offshore Teams
Optimal minimization ofexpensive U.K. lawyers utilization
CO
MPLE
TE
INTEG
RATIO
N
12
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SOUTH AFRICA’S LPO ADVANTAGE
3. Significant cost savings
4. First World experience
5. Robust enabling environment
2. Deep domain skills
1. Skilled, English-speaking talent pool
Large scale English language talent pool with neutral accent
Cultural affinity with UK Costs 30–50% lower than competitive source markets
Narrowing cost differential with low-cost locations
First World infrastructure Superior quality of life for
expats. EU time zone similarities
and ease of access
Attractive investment climate and strong public sector support
Rapidly improving telecoms Political and socio-economic
stability
Mature domestic market
World-class strengths in financial services and legal services
Large experienced pool of legal talent
1
2 3
45
INTEGRATED OPERATIONS
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Operational delivery
Service delivery
Jud
gm
en
t calls
Onshore business facing lawyer, closely integrated with client
Highly experienced onshore lawyer, doing judgement calls and governance
Offshore team performing
operational delivery against playbooks
Offshore Cross Disciplinary Team
Highly experienced offshore lawyer, doing QA, judgement calls and governance
Multi-disciplined and Defined Hand-offs
PROCESS
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Mapping and Workflow
DMAIC
DefineMeasure
Analyze
Control
Improve
Client Paper
TECHNOLOGY
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Speed, Quality and Consistency
Document Automation
‣ Allows creation of tailored contracts leveraging standardised terms
‣ Speeds up the contracting process
‣ Increases consistency
Playbooks
‣ Capture preferred and fall back positions
‣ Drive greater consistency and faster turn-around times.
Workflow
‣ Speed up the document review process
‣ Find errors and automate common time-consuming tasks.
Word Extensions
‣ Improves efficiency
‣ Greater transparency
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PART THREEPRICING AND VALUE
PRICING AND VALUE
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Predictable, Transparent and Risk-sharing
Output pricing Value principles
‣ Incentivises innovation and investment
‣ Pricing could be based on a fixed charge for a block of work, a unit rate per contract (PxQ) or a combination of fixed and unit rate (PxQ + X pricing).
‣ Real fixed fees
‣ Service Levels and Services Credits
‣ Charges based on performance against agreed metric, including BTL and ATL value
‣ Risk for areas of high degree of influenceCost per unit
Volume
P x Q
Px Q + X
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PART FOURCASE STUDIES AND CLOSING THOUGHTS
CASE STUDIES
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The model in use
Supplier CustomerBrief
• Support data / saas sales team in finance industry to close contracts faster
• High volume based on client’s paper
Actions
• Consolidate standard terms and automate production of first draft
• Implement playbook of pre-authorised fall-back positions
• Iterate according to data: business value versus risk mitigation
Results
• Consistently meet or beat SLA - 30 hours• Drastically increase speed to closure
Brief
• Support legal team servicing the IT and marketing procurement
• Varying complexity on client or supplier’s paper
• Onsite presence
Actions
• Implement intake and triage process• Playbooks for various products: risk
review, contract support, deal support• Onshore and offshore support based on
complexity
Results
• Reduce number of draft turns• Reduce time a contract “with legal”
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• Understanding Law Department Objectives
• Limitations of OldLaw structures
• The Power of Providing Systemic Contract Management Support
• NewLaw Advantages
CLOSING THOUGHTS
ABOUT radiant.law
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radiant.law is a UK-regulated law firm that was launched in 2011 by partners from leading firms. We are focused on delivering a better experience and more business value for clients, through a combination of:
Pricing certainty: all our transactional work is performed on fixed price or equivalent basis and we do not keep timesheets – we believe we are selling value, not time.
Experienced lawyers: all of our lawyers have worked at market-leading US and UK firms. All projects are handled by senior lawyers through every stage. We are used to delivering to the high standards and timeframes expected by multinational clients.
Innovation: we use advanced technology and processes to collaborate with clients to improve work product and keep costs down.
Chambers: “Since its formation in January 2011, this niche technology firm has established a formidable reputation in the market for its handling of a range of outsourcing work, as well as licensing, data centre work and software agreements”.
Legal 500: “Responsive, flexible, and focused on the commercial workability of solutions”.
Richard Susskind: “The launch of radiant.law is an important development – the future is creeping up on us”
Legal Industry Pioneers of 2013
ABOUT COGNIA LAW
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Why is Cognia Law “next-generation”?Cognia Law is a next-generation legal outsourcing service provider to global corporates and law firms founded with three basic principles in mind:
• Provide commercial value to clients in quantifiable terms
• Remain technologically forward-thinking; and
• Openly collaborate with the best innovators in the legal sector.
“Our Strategy”We are redefining the strategic value proposition of legal outsourcing as something more than myopic cost cutting through offshoring. Our goal is to constantly push for improving efficiency through an optimal balance between automation and right-shoring.
“Collaborating with Innovative Technology”Cognia Law recognises that embracing new technology is the key to optimising an outsourcing engagement. We also recognise that remaining on the cutting edge means researching and partnering with disruptive technology players.
“Leadership in Contract Management and Due Diligence”Cognia Law’s emphasis is on the next frontier: applying a powerful combination of project management work flows, process automation, search technologies, virtual collaboration, and advanced analytics reporting to construct next-generation contract management and transactional due diligence services.
“Leveraging South Africa”South Africa provides the professional resourcing advantages of popular low-cost jurisdictions, like India, coupled with time zone and cultural alignment with European countries, and best-in-class communications skills.