Canadian Lawyer InHouse

3 CANADIANLAWYERMAG.COM/INHOUSE NOVEMBER 2017 www.canadianlawyermag.com/inhouse Director/Group Publisher: Karen Lorimer karen.lorimer@thomsonreuters.com Managing Editor: Jennifer Brown jen.brown@thomsonreuters.com Copy Editor: Patricia Cancilla Art Director: Steve Maver Account Co-ordinator: Catherine Giles Sales and Business Development Business Development Consultant: Ivan Ivanovitch ivan.ivanovitch@tr.com 416-887-4300 Client Development Manager: Grace So grace.so@tr.com 416-903-4473 Account Manager: Kimberlee Pascoe kimberlee.pascoe@tr.com 416-996-1739 Account Executive: Steffanie Munroe steffanie.munroe@tr.com 416-315-5879 Canadian Lawyer InHouse is published 6 times a year by Thomson Reuters Canada Ltd., One Corporate Plaza 2075 Kennedy Rd., Toronto ON. M1T 3V4 (416) 298-5141. Fax : 416-649-7870 Web: www.canadianlawyermag.com/inhouse LinkedIn: www.linkedin.com/groups/3380194 Twitter: @CLInHouse Editorial advisory board: Sanjeev Dhawan, Hydro One Networks Inc.; Jonathan Lau, Alcohol and Gaming Commission of Ontario; Fernando Garcia, Nissan Canada; Joe Bradford, Bradford Professional Corp; Dorothy Quann, Xerox Canada. All rights reserved. Contents may not be reprinted without written permission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions. Canadian Lawyer InHouse disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reliance upon information in this publication. Publications Mail Agreement #40766500 ISSN 1921-9563 Copyright © 2017 H.S.T. Registration #R121349799 To subscribe or change addresses Call (416) 649-9585 Fax (416) 649-7870 or e-mail Keith Fulford at keith.fulford@thomsonreuters.com RETURN UNDELIVERABLE CANADIAN ADDRESS TO: CIRCULATION DEPARTMENT One Corporate Plaza 2075 Kennedy Rd., Toronto ON. M1T 3V4 By Jennifer Brown Editor's Box SEND YOUR news AND story ideas TO jen.brown@thomsonreuters.com Leaving the billable hour in the rearview mirror I t used to be that alternative or "appropriate" fee arrangements were the common subject matter of in-house counsel conference seminars, but over the last few years the mechanics around the various AFAs out there have given way, it seems, to a more hefty discussion on more thought-out budgets and project management. Case in point is a panel I sat in on recently called Foolproof RFPs to Get the Legal Services You Want, held at the Association of Corporate Counsel annual meeting in Washington D.C. featuring two Canadian in-house counsel, a law firm partner from Gowlings (Canada) WLG and a California-based associate general counsel. Geoff Gibbs, deputy general counsel with the University of California, said his department is "moving dramatically" to a non-billable hour paradigm, noting that what's critical is in doing so you have to get away from using the hourly paradigm as "shadow billing" to value what you're doing. "If you always go back to comparing what it would have been, then you're really not moving away," said Gibbs. "People think it's a revolutionary mind shift, but most professions don't bill by the hour," said Gibbs. "We have ourselves spun up in this old way of looking at things and it doesn't seem to be serving anybody well. It's up to us to break free from it." And if you don't like the idea of hourly billing, consider what Bombardier has been trying — a weekly billing model based on "X thousands" of dollars a week for the period of a project and it's the job of the firm to staff it to make sure it makes money. As in-house counsel increasingly collect data on what matters cost over time, they are becoming armed with that information the next time external firms are approached to work on and provide budget for similar work. BMO Financial Group, for example, is extracting data from its ebilling systems and using that information. As Bindu Cudjoe, vice president, deputy general counsel technology and operations legal, and chief knowledge officer of legal, compliance and security groups at BMO, pointed out, BMO lawyers are investing time looking at what the fees were on a matter and what they paid for certain kinds of services. "It's helping us create baselines and performance indicators," she said. Gibbs said when he first joined the legal department at the University of California, matters routinely went over budget. With an RFP or budget process, firms would submit a budget for $40,000 and then through a "chipping away" process it would creep to $80,000. "We've stopped that and put in a clause that says overages will be granted only in extraordinary circumstances and what we are now getting is firms estimating $60,000 instead of $40,000, but they know they can't get to $80,000 so, frankly, we feel everybody comes out ahead." Faran Umar-Khitab of Gowlings acknowledged the firm has "mounds of data we haven't mined" but is working to change that. Software it is using for project management will give a realistic figure of what Gowlings thinks the value is going to be. As Nick Cerminaro, director of legal services at Bombardier Inc. noted, budgeting isn't al - ways about saving money, it's about how much it's going to cost and having predictability that is followed through. IH

• Cover