The Limitations of a Traditional Approach
1. Choosing Between a Purely Tech or Purely Legal Solution
Companies often stick with traditional law firms or tech providers to execute a large transaction like this. However, traditional law firms tend not to incorporate legal process design and technology in their day-to-day legal work. Therefore, you sacrifice the efficiencies of processes and technology. And tech providers are unlikely to have any legal backing. So while you get the benefits of automation and custom-built technology, you’ll need to tie in a project management platform with the law firm you use.
Without integration between the technology, legal work and processes, the transaction’s full potential may not be properly realised.
2. Peaks and Troughs in the Volume of Work
For this client, numerous external factors drove the volume of legal work at any given point. Accordingly, the volume of work was unpredictable. If the volume ever exceeded the number of lawyers available in a traditional law firm, the firm would have to quickly work out a way to expand its resources. Hiring additional lawyers addresses this issue if the volume and pace of the work are relatively consistent and you have a clear understanding of (and certainty around):
- what work is involved;
- when the work needs to be delivered; and
- how much work needs to be completed.
However, if any of these factors are unknown (or subject to change), a firm could be left significantly under-resourced, with the associated risk of missed deadlines (or being pushed to the limit to meet deadlines). If a busy week is followed by a quiet week and then again by a busy week, it wouldn’t be practical (or palatable) to continually hire and fire staff into the project team.
3. The Unpredictability of Hourly Rate Billing
The final limitation of a traditional firm’s approach to this project was the sheer volume and scale of the transaction, highlighted by the:
- volume of documents that needed to be drafted; and
- lack of certainty around the types of issues which would be encountered throughout the contract negotiation phase.
For these reasons, adopting an hourly rate billing model would have left our client staring up at an ever-increasing mountain of legal fees.
1. Law, Technology and Process Design
We provided a managed legal services solution, backed by a full-service law firm. By looking at our client’s business objectives through legal, tech and process design lenses, our assistance was legally sound, efficient and kept our client’s needs front and centre at all times.
One of our key legal tasks was drafting a large volume of contracts. A highly experienced commercial Practice Leaders oversaw the drafting of the initial templates, while a Project Lead supervised and managed the process of working with:
- our specialist IT engineering team (to automate the generation of the contracts);
- a team of lawyers (to review and finalise the contracts); and
- our legal process design expert (to build processes around efficiently and accurately issuing the correct contracts to the relevant parties).
2. Expert Legal Advisers
The business transition project required our team to provide high-value strategic advice. This included advising our client on questions of statutory interpretation, contractual interpretation and legal nuance.
As a result of the expertise offered by our senior lawyers and Practice Leaders, our client increasingly relied on the managed legal services team to navigate and resolve legal roadblocks arising throughout the project. This included advising our client of the:
- position it should adopt in negotiations (balancing the commercial value of getting the transition across the line with protecting its legal position); and
- extent to which incorporating different terms into contracts would affect our client’s legal risk profile and liability.
As our managed legal services team sits within a full-service law firm, we could:
- respond quickly to specific legal questions; and
- draw in (and increase the involvement of) specialist lawyers when more substantial legal issues arose.
This strategy allowed us to balance providing accurate and expert legal advice with an appreciation for our client’s overall legal fees.
3. A Fixed Monthly Retainer That Accounted For the Unexpected
Pricing for the solution needed to balance two key considerations:
- cost-certainty around the allocation of legal spend; and
- unpredictability in the nature and volume of legal drafting and implementation tasks.
The second consideration arose as a result of the degree of variation between the contractual arrangements our client had with each of the parties involved. Individual interests of each party also varied, resulting in many negotiating positions. As a result, there was significant deviation between the documents for each site.
Document automation streamlined the process. However, incorporating negotiations for each contract meant spikes in the level of advice and re-drafting (requiring intensive support from lawyers). It wasn’t possible to predict these bursts of activity, given the negotiations involved external parties and their legal advisers who were all working to their own time-frames. In setting up this managed legal service, however, we were aware that the negotiations process would be critical to the execution of the project.
As such, the scope of our fixed monthly retainer accommodated this; we priced in variables such as negotiation assistance. Accordingly, the onus was on us, as the managed legal service provider, to build in strong processes (enabled by technology) to efficiently deliver and complete complex work.
4. Scalability and Flexibility of Team Members
In assembling a team of lawyers, we had a core team from the very start of the project through to its completion.
Beyond these core team members, we scaled and contracted the team as necessary. Our business model enabled us to rapidly scale the team during peaks of demand for legal tasks and re-allocate team members during off-peak periods.
The End Result
Our managed legal services team worked to tight deadlines and quickly adapted to unpredictable peaks in the volume of work to successfully assist in our client’s $120 million business transition.
By providing a combination of high-value legal advice, clearly designed processes around high-volume contract drafting and customised technology for tracking and reporting on the status of tasks, we delivered an effective, efficient and tech-driven solution backed by commercial legal experts.
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