Workloads and Workflows in
Large Canadian Departments
Author: Richard G. Stock - CCCA Magazine, Fall 2009
In April of this year, the Chief Legal Officers of 11 large, public law departments agreed to participate in a comprehensive survey of their practices and issues affecting demand for legal services, workflows and workloads, performance management, and the organization and resources of the law department. One of these was a US-based energy company. Everyone contacted readily agreed to participate, as the focus of the survey was on questions and issues which can be difficult to answer. The initiative was launched by Sean McMaster, Executive Vice-President, Corporate and General Counsel for TransCanada Pipelines. He said he had not had a chance to conduct such a detailed study since taking over as CLO more than three years ago, and thought that the time was right.
Chief Legal Officers were asked whether written protocols are in place to guide business units on when and how to call on the law department. Half said formal protocols were in place, but their comprehensiveness varied. Some protocols deal with the role of the law department in procurement processes, others with the approval and execution of standard and non-standard contracts and the settlement of disputes. At the other extreme, one law department said that an operating practice to guide business units was under development. Another said this was done only on an as-needed basis. All participants said that external counsel receive work from the company through the law department or from the business unit, if the firm is on the list of approved counsel with authorized pricing arrangements.
The survey sought to establish the prevalence of formal service standards regarding access to the law department and turnaround times. Flexibility seems to be the order of the day. Only two law departments indicated that they had formal service standards in place. Others said that "understanding" were in place to meet business timelines or that they had to be available 24 / 7. One law department said that service levels are assured by embedding some of their lawyers with the business unit. Another explained that providing "quality, timely and cost-effective services" is built into the law department members' High Performance contracts. One General Counsel said that if conflict exists or a lawyer cannot deliver within an acceptable time frame, then the Vice-President Legal and business unit will meet to reconcile workflow expectations.
There appear to be a number of measures introduced in recent years to make business units less reliant on the law department. These include training, templates and standard-form contracts, and content on the internal website. Co-location with the business unit was cited by six out of the 11 departments. In most instances, co-location affected only a portion of the lawyers in the department. Only one company mentioned charge backs for the legal services provided by the law department.
There are several dimensions along which to describe the configuration of the law departments. Nine of the 11 departments have specialty teams which are centralized and service the entire company. Eight also say that most of their lawyers are aligned with business units and that deployment is primarily geographic. Despite the variety of models, nine were clear that their lawyers report functionally to the CLO. Perhaps it is a combination of these techniques which enables a law department to manage the demand for its services effectively.
The survey reported that growth was expected in demand for litigation services, provided mostly by external counsel. Nine of the 11 CLOs said that they had a dedicated litigation management resource in place.
Another inquiry about law department workloads focused on whether too much time was being spent in managing relationships with and the costs of external counsel. Only one said too much time was invested, and two others said not enough was being spent. Most participants reported that processes to retain counsel and manage costs had been streamlined in recent years. They added that many firms had become more attuned to living within corporate guidelines and in reducing total legal spend for the client. There is evidence that the proportion of legal work provided by the law department will increase slightly in the next two years to nearly 47 %. One was already at 80 %. In some cases, external spend will drop due to tighter management measures.
Nine law departments responded to the inquiry on how few firms do 80 % of their work. Two said only 1 firm did, one said 2 firms did, and another said 3, 4 said 4 - 6 firms, and one said 12 firms. Seven of 9 respondents use only 1 - 4 firms for 80 % of their US work. CLOs were invited to describe when detailed matter budgets were obtained from external counsel and then were asked to provide the threshold levels and form taken in budgeting. Eight of the companies require detailed estimates and general budgets for all major transactions, hearings and for litigation. Only two cited specific financial thresholds for budgeting, while almost all said that budgets were required for all but general matters.
Peaks and valleys occur in the workloads of members of all law departments. Most of the law departments have group leaders, senior lawyers or a "legal lead". They tend to be responsible for balancing workloads internally and with external counsel, as well as for all major projects, sensitive matters, or if there are conflicts. It appears as if it is the operational support work, rather than the strategic legal work, which comes directly to the lawyer from the business unit. In some departments, lawyers leading groups meet bi-weekly to review workloads and may be copied on matters which are referred directly to members of the law department.
General Counsel emphasize that healthy communications in the law department are the way to best manage workflows and workloads. Practice teams supported by robust tools, systems such as e-billing, e-discovery, and contract management are in place with one department. Standardization of work product and reference materials also save time. One department referred to a succession of programs introduced over the last five years: a Client First Initiative in 2004, Cost Management Initiatives in 2008 and, more recently, a Demand Management / Designated Counsel Initiative. Sean McMaster's initial observation about the findings was to find how all the law departments are thinking about similar issues and operate in a similar fashion.
Other findings will be summarized in future articles.