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Reduce the pressure

Law Department Management
|Written By Jennifer Brown
Reduce the pressure

While all general counsel would probably say they’d like to pay less for legal services, others would suggest predictability of cost continues to be even more important to them on large or ongoing transactions and litigation.

When you’re in the depths of a major M&A or piece of litigation, the ability to have a plan in place to track costs and the progress of a major matter can go a long way to providing peace of mind. For experienced corporate counsel such as Jennifer Good, vice president, general counsel and corporate secretary with CRH Canada Group Inc., greater certainty is something she looks for from her external firms.

CRH Canada is a building materials manufacturing and construction company with offices in Toronto. One of the company’s law firms, Gowling (Canada) WLG, has used Cael Project (previously Cael LPM) from Elevate Services on a couple of acquisition transactions for the company. It’s a tool Good says allows “for a lot more flexibility and transparency.”

The functionality of the tool is provided by Cael Project, but the content is customized by each law firm.

The firm has spent the last few years improving its project templates and it’s starting to pay off for clients. “I find the litigators creating the project plans are finding life is easier with them than without,” says Rick Kathuria, national director of project management and legal innovation at Gowling WLG, who heads up the project management initiative at the firm.

Gowlings uses the project management software to budget out matters so clients such as Good have an idea of how much is expected to be spent on various aspects of a transaction as it relates to legal fees. “It also gives me the ability, over the course of the transaction, to monitor spend and have realistic numbers for specific aspects of the transaction,” she says.

“Often times, it’s hard to predict what your legal fees are going to end up looking like at the end of a big transaction,” says Good.

“It may go on for months and months and there are complications along the way, so it’s hard to predict exactly where the fees will go. This tool seems to allow more predictability and tracking at a more granular level, which is nice, and I think encourages the law firm to think about things in a way they weren’t thinking about them before.”

When deals can cost hundreds of thousands of dollars in legal fees, Good says the stakes can be high for potential cost overruns.

“This kind of planning is more proactive from the beginning — you can have conversations about where you are at with certain parts of the deal, for example, around environmental- or employment-related issues. And I can keep the business folks informed in ‘real time’ so there are no surprises,” she says.

Good says it can bring more transparency to the business and management teams, providing some level of certainty in terms of what they are paying for legal fees. “I
can hold the law firm to a level of accountability that they might not have had before,” she says.

It also provides a basis internally for the legal team to conduct after action reviews and determine how to approach things differently on future matters.

 “I would think those conversations with external counsel improve as you’re each learning from one transaction to the next,” she says.

Kathuria says about 45 per cent of matters done through the project management tool are transactional and 45 per cent are in litigation.

“What we find is the transaction ones are shorter and litigation is longer, but when we create project plans, we have templates that we use and it’s all part of the Cael functionality that makes it simple for lawyers to use it,” he says.

Pratik Patel, vice president of innovation and products at Elevate Services, says the tool was first built for law firms to deliver the functionality they needed to provide estimates to clients as well as status and risk updates.

“We built the product to be law firm focused with the aim that once we got them comfortable we would say to the law firm community the next step is to open it up to law departments and open the kimono a little,” says Patel. “We also knew we would be delivering this to corporate law departments — knowing there had to be a good way for law departments to collaborate with us and then create a knowledge bank for best practices.”

In May, Elevate announced it was extending the service it first launched to law firms to corporate legal departments. Cael Project provides risk, activity and budget status monitoring, messaging and collaboration on a single shared web-based project management platform, enabling law firms and legal departments to work together more effectively, while reducing email traffic.

At the same time, Cael Project now provides in-house teams with a dashboard of status and actual costs against budget across all matters and all firms, along with a built-in mechanism for communicating in response to ongoing updates.

Patel says the end goal was to showcase real-time information to clients, and for firms who use it that way, it can be a competitive advantage.

“It’s about pushing the law firms and the law departments together to say let’s go a little deeper than the $100,000 budget figure and figure out how it is made up,” says Patel. 

“If you can give lawyers proactive information about what’s going on in the matter, the risks, the scope — what we can probably do is eliminate surprises and focus the work delivered to the most valuable things. Law firms can say we’re planning to do these depositions and the client can say no, we don’t need to do those,” adds Patel.

A dashboard gives in-house counsel high-level actuals to budget and progress. “It’s meant to be a light-touch health check on your matter portfolio — in-house can send a note or call.

Kathuria says that, overall, the tools help build relationships.

“When our clients have access to it, they know what’s going on and there’s no surprises,” he says. “What we find is when [we]have more proactive project management happening, it actually improves the client relationship and improves trust.”

Legal departments can subscribe to Cael Project and then roll it out to their top external counsel. Gowlings piloted the software a year ago and doesn’t charge for it  — it’s part of the firm’s service delivery model. The firms purchase the product on a subscription model.

For law departments that want their own version of the software to drive the project management, they will pay a base subscription fee and they can invite their law firms in and those firms will pay a small integration fee.

“Over time, what I think will happen is as people get on board to see the benefit of having Cael Project spread across multiple firms, it becomes low cost,” says Patel.

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