APPLYING VALUE LEVERS
The legal staff at CSCEC 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.
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 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. Activities are tracked in a central database that issues reports on time expended in each country.
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.
CSCEC also improved its fee arrangements with outside counsel. External law firms must submit
estimates of a fixed minimum fee and a potential success fee prior to the commencement of work. This
value-added fee structure incentivizes the law firm, expedites project completion and enhances the
prospect of recoverability for the company.
• Outside legal fees reduced $5 million in 2012 over 2011 through contract insourcing.
• Legal fees reduced a further $15 million by requiring advance fee estimates and fixed minimum
fees; recoveries improved by 60 percent.
HIROC and Borden Ladner Gervais
The partnership between Healthcare Insurance Reciprocal of Canada
(HIROC) and its external legal counsel, Borden Ladner Gervais, is
an example of radical convergence: a new configuration of business
fundamentals that includes work measured by number of matters
rather than hours, insourcing work to the in-house legal team,
the rigorous use of legal project management and a multi-year fee
arrangement of a base amount with performance bonuses.
HIROC (a department of only three attorneys) and BLG had already ventured into alternative fee
arrangements together in phases: first, an average hourly rate plus a 10 percent productivity incentive;
then, a new average hourly rate discounted for volume instituted in 2009. Even so, HIROC wanted
increased predictability of legal fees and sought a new approach to pricing its work.