[Case Study] Legal transformation: Gather the data, establish a baseline, realize a win

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Craig Sharp

In 2010 BT undertook a process excellence project – their aim was to improve efficiency and bring down costs within their legal departments, both internal and external. The project was headed by Chris Fowler, General Counsel, UK Commercial Legal Services at BT.

As with all operational excellence projects, it wasn’t easy, but the hard work paid off – in two years BT have managed to bring costs down by more than 11%.

Ahead of the ‘Legal Transformation: Process & Project Excellence’ Summit in London this January, Chris Fowler spoke in detail to PEX Network about the project, this is the resulting case study.

Identifying the need

For any process excellence drive it is key to first establish the need and the goals. The danger is that the well meaning go in without a clear objective, which can lead to wasted resources and a lack of unity. BT had clear goals in mind, and there were a multitude of reasons for implementing such a large business change.

"There were multiple issues that prompted this. We were in a situation where people were saying they were too busy with their current workload and needed more staff. But it wasn't possibleto articulate whether it was one person or ten people, and the challenge on us as a business in the legal team was 'how can we get smarter at answering that?'"

Of the issues Chris and his team discovered, a list of key pain points were established:

  • Multiple distinct teams with different business demands
  • Cost pressures, increasing and shifting demands on legal teams, increasing the compliance burden
  • Multiple data sources for resourcing / reporting – work classified inconsistently.
  • Greater demand on the legal team in new geographies and subject areas such as data protection and environment

Forensic Data Gathering

BT established the areas for improvement however like most projects, this couldn’t rely solely on anecdotal evidence and heresy. In order to justify the investment in time and resources, the very next step was to assess the true extent of the problem and gather supporting data.

"The first step is some pretty forensic data gathering. What became apparent to me is that we needed to build a baseline; we needed to understand what we had, what we were doing, and what the costs associated were of doing that. So we undertook a pretty extensive overhead value analysis, and that was effectively to try and understand exactly ‘what’ our team were doing as opposed to who they were doing it for. By ‘what’ we wanted to understand; : were they doing research; were they negotiating with customers; were they drafting; was the activity location dependent ? We broke down what I would call traditional transaction lawyering skills and tasks, and we broke them down into discrete tasks over a four week period to understand how that added up when you looked at the team as a whole."

What it added up to was the discovery that over 80% of the work being done was in fact location agnostic and didn’t require people to be in a high cost location like London. In short, it was work that could be carried out from any location but technology enabled it to be done largely remotely.

"We had a significant amount of people in the UK and in London; did we need that many people in those locations if the reality was they didn’t need to be there to perform that task? One of the great things about BT is it truly facilitates remote working. It provides high speed broadband connections and connectivity so that people can work from anywhere. It made us take a step back and think, do we need as many people in high cost locations if ultimately we’re not needing to spend as much time there as we anticipated."

Changing the delivery model

Having gathered the data and processed the information, the next step was the biggest thus far – to change the delivery model of the legal team. During this period, BT were also expanding overseas, with that expansion came a requirement for additional legal support in locations such as Asia Pacific and the US..

"We had a requirement to recruit more people outside the UK and we also had a requirement to employ lawyers in emerging areas such as data protection. The key question was, ‘how can we get more efficient use out of our resource?’."

The answer may in hindsight seem simple to some, but it changed everything for the BT Commercial Legal Services team – by managing the flow of incoming work through a dedicated conduit.

"The first thing that we did was establish a ‘front door’; all work requests had to go through that. Those work requests would then be effectively assessed and triaged under a process, and then that work request, ultimately, would either go to an individual who was still within the BT legal department, or it would go off to an LPO provider."

By introducing a ‘front door’ to the process, the team saw almost immediate results – 30% of the lower risk or volume work requests were eliminated at source, freeing up valuable time and resource in the BT Legal team to dedicate to more productive tasks. In real terms approximately 750 work requests were removed from BT Legal’s workload. Another benefit which was immediately realised was a significant reduction in external spend. By introducing this simple process, the BT Legal team was more focused on high value, complex tasks that had historically been undertaken by external law firms, freeing up valuable work hours and reducing spending in an incredibly short period of time.

Realizing a win

The project at BT is still on-going, and like any good process improvement project, it’ll evolve as business requirements do. I ask Chris what he’d consider a "win", the answer points to the on-going, evolving, process improvement that is yet to come:

"I think a win is that we now have the ability to have a discussion about our efficiency in the way in which we never did previously. We now have the ability to demonstrate how we can scale up and scale down and our team has now realized you don’t necessarily just have to employ an extra person to manage demand. There are a variety of different ways in which you can manage a project, manage your resources and that actually using external providers (LPO providers or process providers) can be beneficial and help relieve the pressure on the internal legal team."

"I think the key thing now is we’ve used metrics to demonstrate our ongoing efficiency and, we’re able to demonstrate that we’re actually proactively managing our costs and our resources."

The experience has clearly taught Chris and his team a great deal, finally I ask him if he has any words of wisdom to pass on from his experience:

"Don’t go into this without establishing a baseline, what you have. Otherwise how can you prove how you’ve become more efficient and driven continuous improvement? And secondly, don’t underestimate the amount of time and investment required in developing and maintaining and industrializing processes."