12 ACC VALUE CHAMPIONS | A SPECIAL SUPPLEMEN T TO ACC DOCKET
China State Construction Engineering
Corporation is the largest real estate and
construction company in the world. The
company’s legal department is headquartered in Dubai, United Arab Emirates,
and led by General Counsel Mohd
Sadique. He began his quest for lower
costs and improved value for money in
“In an in-house setting, ‘clients’ are oth-
er departments, the CEO, the board and the staff — in short,
everyone,” he says. “The days of expansive legal teams are over.
In view of our team’s modest size, innovation and technology
are the chosen bedfellows of our department. They have been
instrumental in achieving cost reductions and credible value
CSCEC’s legal department has a $20 million annual budget
and a team of only five professionals who oversee the legal issues
of a total staff numbering 4,527 in Saudi Arabia, Qatar, Kuwait
and the United Arab Emirates. Technology extends their reach
and bandwidth while knowledge sharing aids client service,
communication and understanding.
For example, legal activity is tracked in a central database.
Line graphs depict time expended in each country over the
preceding months; they are shared widely across the organization. “This creates awareness as to which country warrants
greater attention when measured against the yearly targets
for the country,” Sadique explains. “It guarantees priori-tization and alerts staff to track which country demands a
greater investment of time.” It also acts as a key performance
indicator for staff.
The legal staff leverages up-to-the-minute technology, including micro-blogging and instant messaging, to interact with one
another and with their internal clients. Using a central online
system, the department tweets out legal updates, classifying
subjects through the use of hashtags.
“Twitter’s 140-character limit ensures brevity, while its use
strips away the monotony of work and aids real-time information sharing,” Sadique says.
Instant messaging, available on mobile devices and desktops,
allows regional staff to interact with the legal team. It aids
prompt resolution of problems and serves as an early warning
system of burgeoning issues. In addition, updates on pending
corporate legal cases are available to upper management with a
single click through the central online system.
Greater efficiency has been achieved by pulling contracts
back in-house, aided by the use of templates. Legal staff
personally draft and review major contracts rather than
outsourcing them. The work is aided by a system that permits
the population of 20 key, regularly used contract documents
through customized pro forma.
“This saves precious re-drafting time, eliminates major
errors and ensures compliance,” says Sadique. “Further, by
doing it in-house, the contract is more in tandem with the
Those in-sourcing exercises saved the company $5 million in
legal fees in 2012 over 2011, including man-hours and taking
into account opportunity costs of other work.
The quest for value extends to the company’s relationships
with outside counsel. A selective panel of law firms have signed
on to CSCEC’s corporate culture, which requires a fee estimate
prior to the commencement of work. Sadique avoids hourly-rate
retainers and requires a fixed minimum fee, usually 60 to 70
percent of a usual fixed fee, with a success fee to be paid if
monies owed are recovered. Because the projects can total in the
billions of dollars, the amounts owed may be sizable; outside
counsel may recover principal with interest, in which case the
interest usually covers the success fee, Sadique says.
“This value-added fee structure incentivizes the law firm,
expedites project completion and enhances the prospect of
recoverability for our organization. It also promotes palatable
legal outcomes,” says Sadique, who reports that the fee structure
saved $15 million in legal fees in 2012 and enhanced recovery
by 60 percent.
Even the handoff of work to outside counsel is made more
efficient through the use of technology. An online folder protocol establishes a period of 30 days for claims to be considered
and resolved. At the end of that period, access to the folder is
disabled and external counsel is appointed.
“I commenced the value initiative to ensure value for money
when clients sought legal representation. It contributed to a
reduction in legal spend and better value outcomes for my company. In most cases, it also enhanced recoverability of erstwhile
bad debts. The upshot to all this is that it boosts corporate
confidence to seek legal representation and to draw on external
legal expertise,” Sadique concludes. vc
FROM THE JUDGES
“Further evidence that clients globally are
pursuing value-based discussions. This was also a
very interesting use of leveraging new technology
to assist in departmental communications.”
“A good example of a multipronged approach to
legal department management using technology,
outside counsel management and new processes.”
China State Construction Engineering Corporation
Small Department Leverages Technology, Social Media Tools and Smart Pricing to Get More Bang for the Buck