Doing less with more - embracing the new 20/80 rule for contract support

For years, we’ve been hearing how law departments are “doing more with less.” Though this concept is meant to showcase the value of efficiency, the reality is that in-house teams are working much longer hours to meet growing demand for legal support with the same or reduced staffing. This is especially true for contract support. A common suggestion for increasing efficiency is to adopt the 80/20 rule - get a contract to the point where you have most of what you want and not sweat the rest. “Don’t let perfect get in the way of good” drives the point home.  Lawyers struggle to apply this, and it doesn’t reduce volume.

Law departments also believe that their investments in CLMs, automation tools, self-help tools, and artificial intelligence (AI) will reduce workloads and streamline the more routine tasks. These are all good if the in-house team has the time to create the underlying infrastructure which makes these tools useful. But it’s the rare attorney that prioritizes a clause database project ahead of an active deal! 

In addition, legal leadership wants in-house lawyers to become proactive, strategic advisors to the company’s business teams. Most attorneys would like to be more proactive, to better understand the legal and regulatory landscape that impacts the business and to have a seat at the strategy table with business executives. But, unfortunately, finding the bandwidth to perform that continues to be a challenge.

During the current COVID-19 era when in-house teams are presumably available whenever they are online, people with young children are working at home, well into the night once the kids are down and they are back at it early before the kids wake up. Swinging singles and empty nesters may have an inherent advantage, but at least those attorneys with younger kids have an excuse to shut off for a while.

In-house lawyers say they’re working harder and longer now than ever before. Many are parlaying the lean labor market into better pay and some needed time off between jobs. But when they get to their new gig, it’s much the same. It’s like the analogy of pigeons in the park -- throw a rock into a flock of pigeons and they all scramble and fly off, but eventually land in the same park a few yards away.

One approach to solving these challenges is to stop trying to do more with less, but rather do less with more. Forget about the 80/20 rule. Instead, adopt a 20/80 rule where your in-house team focuses 20% of its time on the most strategic, mission-critical contracts and 80% of its time on proactive, strategic counseling. For the 80% of contracts not strategically significant, leverage the other resources, tools, and techniques now available that are more cost-efficient.

HOW TO ADOPT THE 20/80 RULE

Learn how your in-house team spends its time.  Legal leadership should know how its people spend their time, but that is not typically the case. Managers are reluctant to ask their teams to log hours and categorize tasks since lawyers are professionals who know how best to allocate their time and complete their work. Plus, in-house legal might push back on tracking time -- harkening back to the six-minute increments of their law firm days. But time tracking within a law department isn’t about seeing who’s working hardest or doing the equivalent of billing the most hours. Instead, it’s to gauge if activities people are performing aligns with company and department priorities. Most in-house lawyers would be amazed at how much of their time is spent on noise.

The first step in redistributing that time to more valuable areas is to track where and how your legal team members allocate their efforts.  Lawyers are expensive resources. To justify their pay, you want a good return on investment (ROI). Lawyers’ behaviors need to change if they are spreading too much time answering all client requests regardless of value or complexity; or spending time on tasks that other department functions should be handling; or double tasking with other resources.

Monitoring time allocation is part of that effort. Managers need to help their lawyers reallocate and reprioritize by removing obstacles and distractions. Common areas for improvement include:

• conducting meetings for the sake of meetings with no defined goals;
• creating or reviewing unnecessary email content and transmission;
• using poor email practices that require an effort to unearth underlying issues or questions;
• using a vague governance model that pulls in too many people in a crisis or emergency; or
• lacking knowledge management, which causes people to spend too much time finding the answers – or helping others find answers – that should be at their fingertips.

Limit “traffic” coming into in-house legal

Despite what some may think, lawyers don’t like to say no. If someone comes to legal with a request, legal will help. And they typically respond fastest to those who ask loudest. Rarely do lawyers question why a request is being made or what can be done to eliminate requests that are out of scope.

There’s a lot of work that comes to legal that really isn’t legal work at all, or it may be legal work that should be handled by someone else with the relevant expertise. Clients love single points of contact. And lawyers like being the go-to person, at least for more executive-level clients. But a lot of this is air traffic control – finding a document, pointing people to the right place, finding the right subject matter expert, explaining processes and procedures that clients should already be aware of. Lawyers also step in for sales operations, procurement, and other functions when they see a need. These behaviors all add work to the pile – and then the lawyers need to be rescued from themselves.

How can we change this behavior?

First, shield the in-house team from requests. Create an intake process requiring all requests to funnel through a workflow tool that routes the request to a central administrator who can answer the question, seek clarifying information, point the requester in the right direction or route it to the right person.

Second, take less-complex work out of scope. A good example is non-disclosure agreement (NDA) support: 99% of NDAs can be handled by tools and lower-cost resources with access to a good playbook. A senior lawyer reviewing an NDA or even helping to reroute an NDA to the right resource means time poorly spent. By using a workflow tool, requests for NDA support can go to a team trained in handling NDAs, and this team can determine when something needs senior legal review.

To make this work, department leadership must push these processes, track compliance, and require legal personnel to send requesters back to the intake form. Clients will gripe at first at the loss of the handholding they’re used to and complain about “ticketing systems” as borrowed from “faceless IT” or other service industries. But those industries moved to this approach for a good reason – people are expensive, and their time should be used wisely. Ultimately, clients will adapt, and the in-house team will be able to focus on the more important stuff.

Outsource to lower costs, flex resources and access diversified teams

While all this infrastructure is being developed, there will still be contracts to support. And you will experience times of the year or quarter requiring more effort. Law departments need supplemental resources to step in, then step out. Those resources need not be high-priced outside counsel. In fact, lower-priced resources that can follow a process, use a playbook, escalate only if necessary and collect data on each deal would be more effective. Let the in-house team focus on critical, higher-value contracts needing to be heavily negotiated. The rest should be right sourced to external personnel (alternative legal service providers, temp contract specialists and paralegals, interns, etc.) sufficiently skilled to manage risk to meet minimum standards and create an approval document describing those terms that deviate from company standards and possible measures to mitigate the risk.

If your law department doesn’t have balanced templates, playbooks, guidelines, alternative acceptable positions and clauses or other tools for negotiating, then these supplemental resources can help build that content. Each negotiated contract provides information on what the company can accept and the criteria for when it will accept them. Don’t just move on to the next contract.  Gather that data, analyze it, and build out your playbook.

Pave the path for change

Change is hard, especially for lawyers who have been at it for a long time and like having a high degree of control. Plus, you don’t just have to convince your in-house team to adopt a new model; you also must show the value to everyone relying on that team. Sales, procurement, businesses, and other functions will all be expected to use these new processes and in many cases figure things out on their own. Legal can pave the way through training, websites with guides and links, frequently-asked questions (FAQs), and other information. The benefits will include shorter cycle times, decreased contracting costs, status transparency and reusable data. Businesses understand the value of these things and the tradeoffs that come with it.

Ideally, you’ll get out in front of changes and start showcasing the benefits of a new model to your legal team and your stakeholders. You’ll also need supporters and advocates who can help sell the model and quell resisters. Both communication and transition plans need to be in place. Leaders must communicate continually, not just at the beginning, and provide updates on progress and hurdles. Just as important, they need to be authentic if something isn’t working and outline the steps needed to improve it.

Set goals to motivate behavioral change

These recommendations will not be easy for lawyers used to getting deeply involved in contracts big or small. Developing a system for rewarding lawyers for working on the issues that matter most and discouraging them from getting involved with less important issues would provide a good motivation for them to change.

If you devise an intake or triage tool that can rate a contract as complex, moderate, or simple, you could then establish a metric that sets goals for allocating time among the different complexities (e.g., at least 80% of contracts supported are complex, or at least 80% of transaction support time is on complex contracts.) The measure itself isn’t as important as getting lawyers to stop spending any time on simple contracts and very little on moderate contracts. You might consider setting a metric for time spent on strategic activities and business counseling. And then track, aggregate and report. The point here is if you avoid these steps, you won’t see the behavioral change you’re hoping for.

Again, scrap the strategy to do more with less

Law departments can do “less” by establishing better boundaries, a central intake system and metrics to ensure internal legal resources review only the most strategic contracts and issues. The “more” will be to establish a combination of self-help tools, automation and AI integration and outsourcing of contract support and infrastructure projects. Legal operations will play a large part in pulling together multiskilled project teams to build the necessary backbone for tech and self-help solutions to succeed.

Doing less low-value work should allow the in-house team to focus more effort on proactive, strategic counseling. Most lawyers really like being strategic advisors – that’s the sweet spot where you’re adding value and helping the business succeed. With the right motivation and management support, your legal team should embrace that role.

About the Author

Andrew Banquer is vice president of corporate solutions at QuisLex. He is a hands-on architect and implementer of contracting improvement initiatives and ongoing support services.  The author has done extensive work with general counsel, commercial practice, and legal ops leaders to turn strategic objectives into actionable projects and activities. He has 20+ years’ in-house experience at HP and Agilent Technologies, providing responsive, pragmatic counseling to business clients and managing global teams.

ABOUT QUISLEX

QuisLex is a legal services provider delivering the benefits of operational excellence, process rigor, and measurable quality to large-scale complex legal work. They have pioneered innovations in legal operations including award-winning managed document review, contract lifecycle management, risk, and compliance programs, and legal spend management. QuisLex seeks to resolve the challenges of resource constraint, cost management, flexibility, and scale for their corporate and law firm clients. QuisLex is a nationally certified by the New York & New Jersey Minority Supplier Development Council as a Minority Business Enterprise (MBE).

The legal opinions in this article are the author’s own, not necessarily WorldCC’s, and this is not legal advice.