Note: this post was originally written by Angela Petros.
How can we do more with less? If you’re an in house attorney you’ve likely heard that phrase ad nauseam, but the truth is, today’s corporate legal departments are under intense scrutiny to save money and add value to the business. While this seems like an uphill battle, there’s plenty of proof out there that it can be done—and done well.
Recently, we received feedback from Larry Meenan Chief Counsel of Kennametal Inc., a global industrial technology company with 13,000 employees worldwide, to learn how his legal team transformed their legal department and earned praise from upper management.
Before we go into the steps they took to “makeover” their legal department, we want to point out that Larry’s team consists of himself and just two other IP attorneys. In others words, as lean as an IP legal team can be for a global company that employs thousands and conducts business in more than 60 countries.
Innovation a New Focus
A few years ago, Kennametal set out on a mission to adopt innovation as a core value for the company. This new mantra was inspiring for the company and naturally, production went into over drive. Sure, this was great for the business but it was not clear how this could apply to the legal team. Furthermore, Mr. Meenan and his team were up to their eyeballs in complex IP work, without any added help or resources.
Instead of panicking, Mr. Meenan and the IP group decided to take a fresh approach to managing the business. They did it by challenging themselves and their clients to work and think differently. Was it easy? Not really, but then again, when in life does anything worthwhile come easy? This is how they did it…
A Legal Department Metamorphosis
1) Embrace Change. This might seem obvious, but you’d be surprised how many legal departments are continuing to do business as they have always done it for years for fear of change or simply because change is too hard. This includes using antiquated business processes and procedures – spreadsheets for example. Mr. Meenan and his team quickly realized their paper intensive billing and invoicing system just wasn’t keeping up with the pace of the workload and it needed to change.
2) Invest in Technology. The Kennametal group also noticed they were spending a fortune on their paper intensive billing and invoicing system that wasn’t meeting their needs and was actually costing them more money in errors. They decided it was time to invest in a legal spend and matter management system to help them streamline and automate the billing and invoicing process.
3) Set Billing Guidelines. Once they settled on a matter management system, they worked in tandem with their clients to establish new guidelines and terms for how things should be billed such as: how to reimburse for business travel, expenses and meals. They did this to get clarity on how things should be categorized and billed in the future.
4) Set Fixed Pricing on Commodity Work. To gain even more insight into matter costs and to make easier comparisons, the Kennametal IP team standardized rates on IP legal work in commodity-type service categories such as: when to file a patent application in a specific country, or when to conduct a trademark inquiry in these locations. These changes allowed the team to gain important insight when planning for future matters.
5) Share Best Practices. Perhaps the most important tip of all is to share the love with your colleagues.That’s exactly what the Kennametal team did when they realized the fruits of their efforts were paying off in a big way. As a result, the company’s general legal department, consisting of 7 attorneys, are now using the IP team’s best practices as roadmap for their legal department.
The End Result
At the end of the day the big question we are left with is, how did these changes impact the business for the better? Here’s a glimpse of the IP’s team’s progress in just six months:
- More value. ~$100K in savings annually due mostly to capturing billing guideline violations.
- Consolidation. A move from 200 law firms to 30. This lead to retention of only the highest value relationships and a more manageable number of outside firms to work with.
- Efficiency. 4 ½ days saved on administrative work each month by going paperless.
- Error reduction. Invoices are now automatically reviewed for compliance with billing guidelines and if any red flags are noted they are either highlighted or deducted.
- Collaboration. An automatic monthly report is sent to accounts payable which can be uploaded for vendor payment.
- Predictability. An additional report shows matter costs and value based on legal spending.
When looking back at the company’s focus on innovation, Mr. Meenan and his team didn’t know how exactly they would fit into that mission, but as a result of being open to change and finding innovative ways to manage the business, the Kennametal legal IP team has become a role model for the company. This proves that that every department in the company holds an important stake in the business and can make a real difference in helping the bottom line.
Just look at what the Kennametal legal IP team did.
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