ceb legal executive webinar - a conversation with axiom and the vanguard group
TRANSCRIPT
CEB Leadership Council for Legal Executives
28-July-2016
Flexible Legal Talent Models
A Conversation with Axiom and The Vanguard Group, Inc.20 June 2017
28-July-2016
A Framework for Member Conversations
The mission of CEB Inc. and its affiliates is to unlock the potential of organizations and leaders by advancing the science and practice of management. When we bring leaders together, it is crucial that our discussions neither restrict competition nor improperly share inside information. All other conversations are welcomed and encouraged.
Confidentiality and Intellectual Property
These materials have been prepared by CEB Inc. for the exclusive and individual use of our member companies. These materials contain valuable confidential and proprietary information belonging to CEB, and they may not be shared with any third party (including independent contractors and consultants) without the prior approval of CEB. CEB retains any and all intellectual property rights in these materials and requires retention of the copyright mark on all pages reproduced.
Legal Caveat
CEB Inc. is not able to guarantee the accuracy of the information or analysis contained in these materials. Furthermore, CEB is not engaged in rendering legal, accounting, or any other professional services. CEB specifically disclaims liability for any damages, claims, or losses that may arise from a) any errors or omissions in these materials, whether caused by CEB or its sources, or b) reliance upon any recommendation made by CEB.
3© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
ABOUT THIS WEBINAR SERIES
This roadshow series will highlight the growing use of alternative providers in an effort to help in-house counsel design their own flexible, low-cost legal supplier network.
Learn about non-law firm providers, their services and value propositions, and the experiences of other legal departments working with them2
Understand and navigate the rapidly changing market for legal services1
Design a strategy to reduce the cost of specific legal workflows3
Project # xxxxxx
Catalog # GCR170464PR
Year Range 170464
4© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
OUR PANELISTS
Courtney FletcherVP, Financial Services
Axiom Global, Inc.
Courtney Fletcher leads client development and partnership for Axiom’s Financial Services practice in the Northeast. Her team partners with global investment banks, asset management firms, hedge funds, private equity firms, fintech, insurance, and other diversified financial services clients. Prior to joining Axiom, Courtney worked in the investment banking industry, and also practiced as a commercial real estate attorney. She received a BA from Duke University in 2001 and JD from the George Washington University School of Law in 2007.
Michael Kimmel is responsible for the core legal support functions for Vanguard, a top global asset manager. He has shared responsibility and oversight for a global legal and compliance team of 300+ in seven countries. Michael leads the Technology, Digital, & Mobile; IP; Privacy; Commercial Transactions; Real Estate; and Corporate Governance legal teams. Prior to joining Vanguard in 2005, Michael was an associate at Robinson, Bradshaw & Hinson in Charlotte, NC. Michael received his AB from Dartmouth College in 1994 and JD from Duke University School of Law in 2000.
Michael KimmelPrincipal, Deputy General Counsel
The Vanguard Group, Inc.
Project # xxxxxx
Catalog # GCR170464PR
Year Range 170464
5© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
ROADMAP FOR PRESENTATION
The New Legal Operating Model
Panelist Discussion:
Flexible Talent Models
Question and Answer Session
6© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
44% In-House Spending
TRADITIONAL RELIANCE ON OUTSIDE COUNSELAllocation of Legal Department Budgets
Only 4% of legal department budget is spent on alternative legal providers…
Source: CEB 2016 State of the Legal Function Survey. Source: CEB Managing Law Firms to Actual Quality.
...despite continued rate increases...
5.4% year over year increase in law firm rates
Source: CEB 2015 Real Rate Report.
…and mixed satisfaction with law firm quality.Percentage of Legal Departments Rating Outside Counsel as Effective
70% Accurate
28% Actionable
16% Risk-Aligned
4% Cost Effective
56% Outside Spending
Project # xxxxxx
Catalog # GCR170464PR
Year Range 170464
7© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
Project # xxxxxx
Catalog # GCR170464PR
Year Range 170464
EMERGING ALTERNATIVESEvolution of the Alternative Legal Service Provider Market Over Time
Source: CEB analysis.
2000–10 2015 2020
Labor Arbitrage
Offshore LPOs offer savings on labor for highly-routine, rules-based work.
■ E-discovery ■ Document management
Technology-Enabled Process Improvement
Digitization and onshore talent enable outsourcing of low-level factual analysis.
■ Legal research ■ Trademark and patent filings ■ Contract drafting ■ Third party and anti-corruption assistance
Automated Problem Solving
Cloud storage, machine learning, and data analytics enable providers to take on more judgment-based activities.
■ M&A due diligence ■ Contract analytics ■ Business risk analytics ■ Tax law ■ Regulatory compliance
8© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
RECOGNIZING THE CHALLENGEUnderstanding Discomfort Associated with Alternative Legal Providers
Source: CEB analysis.
Change Risks
Potential resistance from in-house staff and business clients
Financial Risks
Concern that total management costs will exceed advertised savings
Performance Risks
Discomfort with the quality of work produced by alternative providers
Project # xxxxxx
Catalog # GCR170464PR
Year Range 170464
9© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
ROADMAP FOR PRESENTATION
The New Legal Operating Model
Panelist Discussion:
Flexible Talent Models
Question and Answer Session
10© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
Axiom
11© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
4 © 2016 Axiom Global Ltd. Confidential and Proprietary Property of Axiom
-- Richard Susskind
“Until the platform is burning, most law firms aren’t likely to change radically. To successful law firms, I always say: It’s hard to convince a room full of millionaires that they’ve got their business model wrong.”
12© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
STATE OF THE LEGAL INDUSTRY
From Artisanal... ...to Industrial
13© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
7 © 2016 Axiom Global Ltd. Confidential and Proprietary Property of Axiom
Work Segmentation
Project & Process
Management
New Legal Delivery
Models
Tools & Technology
What Does “Industrial” Mean?
INDUSTRIAL DNA
14© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
8 © 2016 Axiom Global Ltd. Confidential and Proprietary Property of Axiom
0
0.5
1
1. 5
2
2. 5
3
3. 5
4
4. 5
0 2 4 6 8 10 12 14 16 18 20 Time
Workflow
Capacity
Workflow Volume
Law Department Fantasy
15© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
9 © 2016 Axiom Global Ltd. Confidential and Proprietary Property of Axiom
0
0.5
1
1. 5
2
2. 5
3
3. 5
4
0 2 4 6 8 10 12 14 16 18 20 Time
Workflow Volume
Workflow
Capacity
Law Department Reality
16© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
10 © 2016 Axiom Global Ltd. Confidential and Proprietary Property of Axiom
0
0.5
1
1. 5
2
2. 5
3
3. 5
4
0 2 4 6 8 10 12 14 16 18 20 Time
Workflow Volume
Workflow
Capacity
Law Department Optimized
17© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
11 © 2016 Axiom Global Inc. - CONFIDENTIAL
▪ Fixed costs in a dynamic environment
▪ Declining budgets even in periods of corporate revenue growth; Limited discretionary/investment funds
▪ Systemic career-pathing issues challenge cost and team retention
THE IN-HOUSE DEPARTMENT Under Immense Pressure
▪ Bloated cost structure
▪ One resource category (associates) generally available for secondment
▪ Limitations on volume and duration of secondments
THE LAW FIRM Stuck on the Status Quo
64%
36%
Traditional Composition of Corporate Legal Industry
Emerging Composition of Corporate Legal Industry
20%
50%
30% ▪ In-House Department ▪ Law Firms ▪ New Delivery Models
Axiom Fills the Void Between In-House Teams and Law Firms
▪ Variable, efficient delivery model drive significantly lower costs
▪ Suited for majority of corporate legal work: contracts, regulatory, compliance, privacy, M&A, and unbundling litigation
▪ Multiple resource categories and proprietary technology
NEW DELIVERY MODELS Enabling Better Performance
18© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
12 © 2016 Axiom Global Inc. - CONFIDENTIAL 12
HIGHLIGHTS
We Support Clients Across the Globe
§ Axiom now serves over half of the F100 globally
§ 17 Offices and 3 Centers of Excellence globally
§ Recognized as Top 7 Trailblazer by The Lawyer and #1 Innovation in Strategic Resourcing by the Financial Times
HIGHLIGHTS
~2,000 Axiomites worldwide
1,000+ Attorneys & compliance specialists
#1 World’s largest recruiter of legal talent
1M+ Contracts per annum
19© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
13 © 2016 Axiom Global Inc. - CONFIDENTIAL 13
Scale & Experience
Scale
Our Clients
Our Attorneys
Experience
7-year growth of our top-10 client relationships
World’s leading & largest hirer of attorneys*
We work with nearly half of the Fortune 100 and all 10 of the world’s largest banks
>600%
Notes: *According to The NALP Foundation, Associate Attrition Report, 2014
Pace of >100 new engagements per month
We Are the Market Leader in What We Do
§ ~2,400 attorneys interviewed per year
§ >350 attorneys recruited per year
§ Seniority levels range from 2 PQE through to ex-law firm partners/GCs
We have engaged attorneys over 6,000 times
We know how to grow together with our clients
1,000+ attorneys
Real Estate
Capital Markets
Asset Management
Labor
Derivatives
Litigation
Intellectual Property
Corporate Transactions
Healthcare
Other
Compliance & Regulatory
Banking & Finance
Technology
Commerical
Number of Engagements
1500
1000
500
0
20© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
Vanguard: A Case Study
21© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
22© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
Elastic Subject Matter
Expertise
Integrated Substitute for Law
Firms + FTEs
Regulatory Compliance
Project Support
Variabilize Non-Core
Contract Support
Gapfills
Embedded Axiom Attorneys
23© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
Applying Process, Technology, and Operational Excellence to the Contracting Lifecycle
18 © 2014 Axiom Global Inc. - CONFIDENTIAL
• Metadata extraction, storage and analysis
• Ongoing obligations management, compliance review and renewals
• Request/ Assign/ Draft/ Negotiate/ Execute
Business Outcomes
PROCESS TECHNOLOGY PEOPLE
• Playbooks • Forms • Process Maps • Productivity and training tools
• Junior-ize work where possible • Mix of FTE and Variable
Resources • Expertise where needed • Ability to adjust to volumes/
spikiness
• Technology for document management
• Tools for tracking volumes, throughput and performance
• Ability to meet firm goals and mandates including cost containment • Continuous improvement embedded in model • Providing optimal internal client service
Contract Creation and Execution Contract Information Management
Obligations Management
FOCUS for TODAY’S DISCUSSION:
Foundational Capabilities via In-House and Outside Partners
24© 2017 Gartner, Inc. and/or its affiliates. All rights reserved. GC171851
28-July-2016
ROADMAP FOR PRESENTATION
The New Legal Operating Model
Panelist Discussion:
Flexible Talent Models
Question and Answer Session
28-July-2016
Thank You