CSA Group, an engineering professional services company that develops standards and evaluates products, was one of 11 law departments and five law firms and service providers selected from 83 nominees in the 2014 Value Champion awards.
“For the past five years, change has been coming at lightning speed,” says CSA’s general counsel Ellen Pekilis. “We’ve grown from a 650-person Canadian company with $120 million in revenue to 1,700 people in 14 countries with 51 per cent of staff outside Canada and almost $300 million in revenue.”
Pekilis, who heads up a six-person legal department, says in an environment of extremely rapid growth happening in a relatively small company they had “sophisticated legal needs popping up” at the same time they also had formal initiatives going on around employee engagement and customer loyalty.
“We needed to get out in front of it and what we did was follow a set of processes and guidance the ACC had for aligning a legal department with the corporate strategy,” says Pekilis. “I involved the entire team and went through the corporate strategy and did a line-by-line review. We went through each one to determine what legal work we needed to do to facilitate it all.”
They looked at the legal demands by region and legal skillset required and plotted them on a risk opportunity matrix that let the legal department evaluate how high a priority they were in terms of helping the business achieve its goals. This was done by ranking how important the opportunity was to the company versus the amount of risk the company could tolerate for each particular opportunity.
Pekilis then created three levels of priorities for the in-house team to focus on:
• Top priority: highest benefit to the company, requiring the highest degree of knowledge to the company.
• Middle category: tasks best outsourced to external legal partners, requiring a variety of skillsets spread out across different geographies.
• Third tier: matters of a lower value-add that don’t need to be done by a lawyer.
“That really helped us focus. Did we have the right providers in the right places for the middle category, and what could we do around fee structures and what were the opportunities to provide alternatives to legal services like checklists and training. We also developed a very comprehensive staff training program to help staff understand.”
The legal department also measured how it was doing. It does customer satisfaction surveys internally every two years.
“We always had a high quality ranking but our scores for ‘legal understands our business needs’ rose almost as high as our quality scores above a 90-per-cent ranking,” she says.
In terms of managing cost, in the areas such as performing investigations and compliance tasks, the department has reduced costs by 90 per cent per incident by using a third-party investigation service.
By having localized outside counsel to help manage routine commercial and employment tasks in some of jurisdictions, CSA Group has reduced legal fees by 30 to 50 per cent.
CSA Group uses Gowling Lafleur Henderson LLP as its main Canadian provider while its U.S provider is BakerHostetler LLP and Baker & McKenzie LLP internationally.
“When there is a task in another country that is more routine and less strategic we look for a smaller local firm,” says Pekilis. For example, they use Lachner Westphalen Spamer for routine support in German operations.
“It’s been a really great exercise and it was really a team initiative,” says Pekilis. “It has helped the team members focus on higher priority items.”
To read about the other ACC Value Champion winners go to http://www.acc.com/valuechallenge/valueChamps/.