Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50879
he says. In the absence of a web-based billing and file-management system, he would have to resort to calling a clerk or assistant hoping that they find all of the necessary information. Of its relationships with outside counsel, the most important for Kruger Products is the one it manages with Gowling Lafleur Henderson LLP's Toronto office, the company's main firm for intellectual property matters. "In a typical month, we may have anywhere from between 50 and 100 invoices going to a significant client," says Gowlings partner Chris Pibus. Processing that monthly volume "was a challenge" in the case of Kruger, he adds. Gowlings and Kruger Products approached Serengeti jointly to create the e-billing and document-manage- ment system it now operates. "We did it really as a three-party joint effort so that we all knew from the beginning how it would work and we were able to construct a system I think that is very well-suited to having many different matters going on at the same time," says Pibus. A typical IP file can last a couple of years, he adds, meaning potentially thousands of invoices for a portfolio of files with a client. Having the system in place has "reduced the stress" of keep- ing on top of what was before a steady stream of paper invoices. "To be able to manage that through a system that allows a client to see at a glance the his- tory of a file, to see what is current on it, to see what has happened over the past months, and to be able to proc- ess it electronically rather than dealing with stacks of invoices, there is a real advantage to it." While legal e-billing and document- management providers typically prom- ise cost savings for in-house counsel of as much as 15 per cent annually, Reynaud estimates the savings to his firm in outside legal costs would be between eight to 10 per cent. Because systems such as Serengeti's provide bet- ter quality information by breaking it into key categories, it does provide in- house counsel with data to give it lev- 28 • FEBRUARY 2011 erage with outside legal firms on costs when required. "I guess one could say you can play hardball although I am a little bit reluctant in utilizing that term," he says. "But you certainly have much better control and much better vision of what is going on and how to control your costs." In Canada, Serengeti counts as in-house clients the likes of Kruger, American Express Canada, and J.D. Irving Ltd. and has a total of 284 out- side law firm offices across the country using its system for e-billing and docu- ment management. While the Seattle company says it can tailor the soft- ware to work with any size of client, it may deliver the best return for smaller legal offices such as Kruger's. "Smaller law departments often find that it is a necessity for them because they have fewer in-house resources to manage all the legal work that they have," says Rob Thomas, Serengeti's vice president of strategic development. Outside law firms "can drown you in paper and e-mail," he says. "If you are an in-house counsel and you are working with 30 or 40 law firms on 100 different projects, it is just a logistical nightmare. You are getting all this stuff in different logisti- cal formats and you have to keep track of it all." Thomas says a typical relationship with an in-house counsel client starts with a phone call and a test run of the system. Once a client signs on, the software firm configures the system to the company's specifications to track required fields of information and train client staff and outside firms, if neces- sary, about how to use the platform. "It is basic project management, I tell people, but it is project management for lawyers," says Thomas. "It involves those kinds of things that you would expect: status and deadlines and docu- ments and basic information, budgets, bills, results, evaluation forms of out- side counsel." Serengeti cites return on investment studies that detail savings "north of 10 to 15 per cent" for corporate clients on annual legal spending. Those savings INHOUSE come in areas such as working with budgets more regularly and creating a project plan and tracking progress against it. It can even go to little things like the cost of photocopies, for exam- ple. "Many companies say, 'We will not permit a firm to make a profit off of photocopies, you are not in the photocopying business, you are giving us legal services,'" says Thomas. The system will catch "over-billing" in such flagged and monitored areas. "Longer term, you really get savings by track- ing the efficiency; who does the best job for you in given types of projects," says Thomas. "How long does it take certain firms to do real estate or patent work? So over time the idea is that you are sending more work to the firms [that] are most efficient, who get the best results for you and less work to those that aren't. That is where the big savings are." Setting up a system such as Serengeti's is faster than it was in the past because many outside law firms already use one or more e-billing and document-man- agement platform. The speed of the startup process is determined by how motivated the law department is, says Thomas. It can range from a few weeks to three or four months for larger law departments. "But it is not a year-long IT project." Thomas says costs for e-billing plat- forms, which are carried by corporate law clients, range depending on the size of the legal department with more discounts offered to companies with bigger legal budgets. Most companies end up spending half to one per cent of annual legal spending, Thomas esti- mates. "If they are saving 10 to 15 per cent, that is a pretty damn good return on the money." While e-billing and document-man- agement platforms all seem to offer the same thing — a client-controlled set of ground rules — their value can ultimately be determined by asking a simple question. Would you give it up and go back to the old, paper-based way of doing things? "No," says Kruger's Reynaud. "Once you are accustomed $ $