Air Canada has been in a constant state of transformation over the last few years in an effort to continually improve customer experience and employee engagement and create value for shareholders at the same time. It’s a tall order and one that strategically involves the legal department.
Growing at a rapid rate, the airline has increased its destinations by 20 per cent while achieving new financial and operating records, including for passengers (48.1 million in 2017 versus 35.8 million in 2013) and operating revenues ($16.2 billion in 2017 versus $12.4 billion in 2013).
Air Canada’s growth and transformation significantly increases the complexity of its business driven by underlying challenging initiatives. For the legal department, this and an ever more challenging regulatory environment translates into a significant increase in mandates and their complexity.
To address the growing number of challenges and recognizing its role as a valued partner helping the company achieve its business objectives, the legal department implemented multiple strategic and cost-reduction initiatives to reduce spend, increase efficiency and effectiveness, empower internal clients and mitigate risk.
In 2017, the legal department insourced external counsel work and in doing so increased the total employee count by 10 per cent to 53 from 48 in 2016, aggressively used competitive bids and alternative fee arrangements (54 per cent of all 2017 mandates are now covered by an AFA), conducted more than 50 training sessions to internal clients and created more than 40 templates and other tools to reach objectives.
Despite the increased volume and challenges, the legal department maintained its overall spend in 2017 (flat over the last four years despite the growth). Comparing the legal department’s spend to the growth of Air Canada’s business (based on aircraft seat departures, a meaningful measure of growth), the department has increased its efficiency by 34 per cent over the last four years, according to David Shapiro, senior vice president, international and regulatory affairs, and chief legal officer.
Based on independent third-party surveys, Air Canada’s legal operating expenses as a percentage of corporate revenues (0.10 per cent) place Air Canada’s legal department among or ahead of leading global legal department benchmarks.
Focus on soft skills
In addition to reducing spend and increasing efficiency, the legal department took steps to focus on “soft skills,” fostering engagement and embracing culture change. Using its annual department-wide offsite retreat, in 2017, the legal department launched several employee-driven initiatives, to include positivity and empathy in partnering with clients and building trusting relationships throughout the organization. It launched Time for Yourself, encouraging and providing opportunities for staff to devote time to projects that benefit themselves personally, allowing them the flexibility to determine how to invest in their “me” time, in turn, allowing staff to bring their best self to work.
Separate groups focused on process mapping, creating stronger relationships with internal client groups, the acquisition of world class/leading-edge IT and defining core values.
Despite having only recently invested in an earlier-generation matter management solution, Air Canada decided to switch tracks, for long-term benefit. It is now in the final phase of implementing Onit Enterprise Legal Management software, which includes the billing point invoicing and iManage document management software. This platform will support business process improvements across legal operations.
All the efforts are clearly paying off. A 2017 client survey showed that more than 98 per cent of internal customers “strongly agreed” or “agree” that the legal team is a valuable part of Air Canada’s business.