This Brazilian airplane manufacturer applied KPIs, process improvement
(‘lean’), contract standards and more to gain efficiency and control. The
eventual 10 percent reduction in legal expense and 30 percent reduction
in contract cycle time is impressive for this company.
This is one of the most exciting nominations we reviewed. It really stood out,
all the more so in that they prove that value concepts work everywhere.
Client training was a key strategy to
making these changes. “We’re not trying
to turn them into lawyers, but to create a
basic understanding,” she says.
In another major lean initiative, the legal department
considered and re-engineered its relationship with law
firms. They pursued an ambitious goal to recalibrate
and equalize spending, so that internal and external
spending would be in a 1: 1 ratio. Reducing overall
outside counsel spend by 20 percent is part of the
legal department’s strategic plan through 2016.
To meet these goals, the department implemented
standard engagement procedures to ensure more
efficiency and adherence to the company’s contracting
requirements. They created and are implementing two
databases, one that contains all of the legal opinions
produced by law firms for Embraer; and another that
contains sufficient relevant information about all
of the external firms to help in-house counsel with
selection and fee negotiation. It even contains ratings
and reviews supplied by in-house counsel: “It helps
us understand work that has already been done, and
evaluate the law firm and the specific attorney who
worked on the matter,” Rodrigues says.
Taking to heart lean’s philosophy of continuous
improvement, Embraer Legal has also ensured that
100 percent of all unfavorable court decisions against
the company generate improvements to processes and
activities through the lessons learned methodology,
which starts with a root cause analysis. Many of
these are related to labor matters; Brazil has labor
laws that are very protective of workers, according to
Rodrigues. Twenty-one improvements have already
been implemented.
“We don’t want to make the same
mistake twice, so we study to
understand areas of recurrence. This
enables us to turn an adverse result
into something positive, and the data
we derive from the lean approach is
extremely helpful.”
Aside from the improved metrics already reported,
the initiative has resulted in improved budget
predictability by creating a uniform procedure to
establish parameters for risk assessment of ongoing
litigation. The team revised the basis for those
evaluations to eliminate varying points of view, and
to better reflect tax and reporting requirements. “We
get a much more accurate estimate of how much we
might spend on a claim,” Rodrigues says. n
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