Canadian Lawyer InHouse

august 2014 38 INHOUSE At a certain spending thresh- old, RBC must issue an RFP. "Before we took that path, fi rms didn't spend as much time, I don't believe, thinking about what they would need to do to take a fi le toward the conclusion of the objectives of the client," says Gutelius. "They realized they need to engage in a discus- sion with the client to identify what those objectives are." The diffi culty with the his- torical hourly rate model is that the incentive to maximize rev- enue is to maximize hours. And that creates a watchdog effect where someone on the other end has to review the bills, line by line. In RBC's insurance program, however, the in-house team no longer receives itemized bills and no one has to do a line-item review or question whether something should have taken one hour or two. As part of its value billing arrangement, the annual fee is based on volume over a monthly basis. The perception of many law fi rms — at least the fi rst time you have a conversation about value billing — is that they're being asked to do the same thing for less money, says Gutelius. But a value-billing proposal is really about being more effi cient. "If a law fi rm is given the opportunity to create effi cien- cies, then they will be able to increase profi t margins while charging less — charge me 90 per cent (of what you used to charge) but spend 80 per cent of the time you used to spend on it," says Gutelius. And, when both sides are not focused on the docket sheet but on the depth of the re- lationship, it's much easier to use external fi rms in the role of trusted adviser, he says. In many value-driven programs, the rela- tionship is really with the fi rm, rather than a specifi c lawyer or two. And that changes the dynamic of the relationship. "Bad per- formance in a fi le hurts the whole relation- ship with the fi rm because it's a program," says Gutelius. "It's about losing that 100 or 200 or 400 fi les in the program." Corporate legal departments that deploy an enterprise legal management platform are able to gather data that can be leveraged for insights, says Mark Poag, senior vice- president of the combined enterprise legal management Wolters Kluwer business of TyMetrix/Datacert. The company's technology platform, Datacert Passport, allows corporate legal departments to unite systems that manage legal, risk, and compliance activities onto a single, collaborative framework. Corporate counsel can use their own data to examine similar matters to deter- mine expected costs and staffi ng on mat- ters, says Poag, helping to set the right bud- get or to determine and track alternative fee arrangements. Matter management tools (like TyMe- trix Matter Analyzer) can also be used to gather information such as budget compli- ance or matter length for the evaluation of fi rms that work on similar matters, helping to make decisions on which fi rms to use. Benchmark data can be found in many forms (such as LegalVIEW), which allows organizations to compare the staffi ng and costs of similar matters to their in- dustry peers. Dominic Jaar, partner and national practice leader with KPMG's Information Man- agement Services, started his career as a litigator, moved in- house with Bell Canada, then started his own consulting company, which he later sold to KPMG. During his time at Bell, he introduced the concept of value billing — a "fl at-fee, results-based billing arrange- ment." He also took a lead in rolling out a legal case management system in order to do analytics, not only to assess internal performance, but also to assess the performance of external counsel. There is an interesting link between e- billing and LCM systems, he says. An e- billing system provides fi nancial data in a structured, electronic format. An LCM or matter management system provides de- tailed information about cases or matters. When the two are connected, data fl ows from the e-billing system into the LCM system, which provides a comprehensive set of data that can be analyzed for trends and insight. With litigation, for example, in-house counsel can generate a report to see if they typically win or lose against a particular fi rm during litigation. "You get a wealth of information and that's using just one pivot," says Jaar. "You can take it one step If larger clients are asking us to do this, we'll try mightily to do it. the RFP process has become very much a part of the fabric of how work gets doled out. MaRK taMMINga, gowling Lafl eur Henderson LLP ance or matter length for the evaluation of fi rms that work on similar matters, helping to make decisions on which fi rms to use. Benchmark forms (such as LegalVIEW), which allows organizations to compare the staffi ng and costs of similar matters to their in- national practice leader with KPMG's Information Man- agement Services, started his career as a litigator, moved in- house with Bell Canada, then started his own consulting company, which he later sold to KPMG. he introduced the concept Corporate legal departments that deploy an enterprise legal management platform are able to gather data that can be leveraged for insights, says Mark Poag, senior vice- president of the combined enterprise legal management Wolters Kluwer business of The company's technology platform, Datacert Passport, allows corporate legal departments to unite systems that manage legal, risk, and compliance activities onto a Corporate counsel can use their own data to examine similar matters to deter- mine expected costs and staffi ng on mat- ters, says Poag, helping to set the right bud- get or to determine and track alternative fee Matter management tools (like TyMe- trix Matter Analyzer) can also be used to gather information such as budget compli- he introduced the concept of value billing — a "fl at-fee, results-based billing arrange- ment." He also took a lead in rolling out a legal case management system in order to do analytics, not only to assess internal performance, but also to assess the performance of external counsel. There is an interesting link between e- billing and LCM systems, he says. An e- billing system provides fi nancial data in a structured, electronic format. An LCM or matter management system provides de- tailed information about cases or matters. When the two are connected, data fl ows from the e-billing system into the LCM system, which provides a comprehensive set of data that can be analyzed for trends and insight. With litigation, for example, in-house counsel can generate a report to see if they typically win or lose against a particular fi rm during litigation. "You get a wealth of information and that's using just one pivot," says Jaar. "You can take it one step he introduced the concept of value billing — a "fl at-fee, results-based billing arrange- ment." He also took a lead in '' ''

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