When General Counsel Michael Tucker
took the helm of the legal department
at Avis Budget Group in 2010, he found
“chaos”: a company using almost 700
law firms globally, often hired by local
managers at the mobility company that
includes such brands as Avis, Budget,
Payless and ZipCar.
“It was almost impossible to get my arms
around the legal budget,” says Tucker,
who heads up a department of about 30
attorneys. Further, there was little appetite
within the business to spend the time and
money to get things under control. But in
2014, everything changed: The company
adopted a zero-based budget policy that
required a justification for everything in a
department’s budget. A closer examination
of spend revealed many inefficiencies, not
the least of which was that ABG was paying
71 percent of its outside litigation spend for
partner time. “We also discovered that we
were outsourcing a lot of legal work, not
because we were lacking the skill set but
because we were lacking the bandwidth,”
says Tucker, who subsequently hired six new
attorneys to allow for the strategic insourcing
of certain legal work.
The foundation was laid for an innovative
law firm convergence program, coupled with
strategic insourcing and new legal operations
capabilities, that collectively transformed the
department and has changed the way ABG
lawyers view themselves and their clients
think about the legal team, Tucker says.
A disaggregation exercise separated
legal work into three tiers according to its
complexity and level of exposure:
• Cream: high legal and financial exposure,
with relatively low volume and frequency
• Core: medium to high legal and financial
exposure, with significant volume and
regular frequency
• Commodity: low to medium legal and
financial exposure with high volume and
frequency.
In 2015, ABG began its yearlong legal
transformation effort using a multistep
process:
1. A pre-RFP package went to over 130
firms, asking law school-type scenario
questions: how the firm would solve and
staff a matter, use technology and apply
innovative strategies. “We were focused
on the firm’s use of technology, a culture
that supports innovation and a client
satisfaction orientation,” Tucker says.
AVIS BUDGET
GROUP
DISAGGREGATION
+ CONVERGENCE =
TRANSFORMATION