Driving efficiency often requires change management – and change management “is really about people.”
That’s according to VMware® VP and Deputy General Counsel Aine Lyons for Worldwide Legal Operations, as described by the Association for Corporate Counsel (ACC) in a case study about the ACC Value Challenge awards: Scaling, Streamlining, and Succeeding: Transforming Legal Services to Support the Corporate Vision.
VMware was one of twelve companies, “selected by a panel of in-house counsel judges from a group of 80 nominees,” according to an ACC announcement about the awards. Many of the legal departments cited this year “hinged on legal operations techniques.” With regard to VMware, the announcement notes the company:
“Undertook a three-year transformational strategy to meet the challenges of dramatic business growth without increasing headcount or expenses. The company enhanced its legal operations to gain efficiency across all geographies while also elevating client satisfaction. Value programs improved budget predictability by 98 percent and reduced legal costs by more than 10 percent.”
The case study cited above provides greater detail on the outcomes including:
- Cost avoidance. “more than $3 million in cost avoidance in 2014 alone;”
- Hard and soft savings. “$2.8 million hard and soft savings in 2014;”
- Legal spend Management. Reduced legal spend as a percentage of revenue by 25 percent over four years.
Mixing Art and Science for Corporate Legal Efficiency
The case study on the ACC website includes several VMware slides, including this one: Art + Science = Legal Standard of Excellence. This visual seems to be an important part of the VMware story because it suggests the success wasn’t based on a single project or technology, but rather a mix of adaptation among people, process and technology.
The case study underscores several factors:
1. Process re-engineering and outsourcing. The first step before “implementing any tools” was to re-engineer processes to manage more legal work without adding headcount. “The VMware Legal team decided to reallocate low-value, low-risk, repetitive work streams to QuisLex, a top Legal Process Outsourcer (LPO) in India,” according to the ACC [link to the company added for reference].
2. Optimize contract management. “Turning again to QuisLex, VMware cleansed and migrated over 80,000 historical agreement records,” which provided a searchable database of contracts. This included a reporting capability on “contract obligations with customers, partners and vendors.” The legal department also “engaged QuisLex to offload non-strategic contract review and template maintenance services.”
3. Automation and contract templates. The legal team consolidated 60 contract templates for professionals services to just one and implemented “a more efficient modular contract setup” for long-term engagements. “VMware next implemented Apttus, a cloud-based contract lifecycle management solution built on Salesforce, to automate the contract creation process for their core revenue contracts” [link to the company added for reference].
4. Legal spend management. The company largely relied on manual process for managing legal invoices, which means the department “lacked performance and rate benchmarking for outside counsel and that billing was not standardized.” The ACC case study says, “To solve the problem, Lyons first deployed an e-billing system – CounselLink – to automate a rigorous invoice review process in line with best practice billing guidelines to capture spend by key matter details and to encourage budget monitoring.” With legal spend automation and analytics in hand:
“the team aggressively rebuilt a preferred provider panel by negotiating billing rates, adding matter-specific discounts and establishing alternative fee arrangements. VMware also rolled out more stringent billing guidelines with their outside counsel worldwide in line with best practice vendor management. They implemented billing controls, including automated bill review, and mandated no fee increases for a minimum of two years on any matters.”
5. Training and professional development. The leadership implemented training, mentoring programs, rotating staff assignments, and fostered a culture of community service. “By focusing the team on interesting and challenging work that directly impacts the business, we achieved our goal of becoming a trusted advisor, while also encouraging career development for our team members,” according to General Counsel Dawn Smith in the case study.
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While there are a number of techniques and tools for driving efficiency, the most important piece of advice from this case study may well come at the end, where Ms. Lyons says:
“It is important to get buy-in early and communicate frequently with leadership and your whole department, including your vendors and firms. And get everyone involved. Make people part of the change rather than forcing it upon them.”
Congratulations to the VMware legal team – and thank you for sharing your story.
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