Simple, Efficient, and Stress-Free: Yes, That’s an In-house Legal
In a fast-paced digital business that is expanding internationally and into highly regulated
markets, the legal workload is intense. REA Group is an ASX-listed multinational, digital
advertising business specializing in property. REA operates leading real estate websites in
Australia, Italy, France, Luxembourg, Germany, and China; and has recently completed the
takeover of a digital advertising property group in Southeast Asia. The business is heavily
dependent on the legal team which, until recently, was heavily dependent on external
counsel—at least until late 2015.
In a comprehensive initiative designed to unbundle legal work, consolidate the number of
external providers, and digitize workflows, the REA Group legal team took a multipronged
approach. As a first step, General Counsel Sarah Turner issued a Request for Proposal to 14
firms that had been working with the company. Turner, who had been at REA for less than
a year, was well-versed in alternative fee arrangements and value-based pricing, and had
reduced external legal fees by up to 60 percent at her previous employer.
“I looked at the performance of REA’s external providers when I started here,” she says. “They
had not been reviewed in a long time, and complacency had crept in. Time and materials
does not reflect value.”
After an extensive vetting process, one principal law firm was appointed. The firm agreed to
a discount on fees as well an alternative resourcing arrangements that would result in cost
reductions across the board. Turner negotiated a spectrum of alternative fee arrangements,
including fixed fees, a target-price model for a defined scope of work, partial success fees or
risk-sharing arrangements, unit-based pricing, value pricing, and retainers.
The second part of the initiative involved digitizing workflows to reduce the administrative
load of the in-house legal team. Working with an internal developer, they mapped manual
workflows and digitized them, such as with contracting processes. This has had results far
beyond the financial:
“Now that we are managing the lower-value work differently, the legal team can focus on
things more deeply, ask better questions, and focus on higher-value work. It was an excellent
cultural fit internally. We can now practice on agile grounds,” Turner says.
What advice does Turner have for fellow general counsel contemplating similar initiatives?
“Define what works for your company, then just ask for it. Every outside
firm we spoke to was open to working in a different way,” she says.