Allygroup joins WOAG Labour Hire Panel

Allygroup is excited to announce that we have been successful in being added to the Department of Finance Whole of Australian Government People Panel Phase 2 Labour Hire Services (SON 3965020).

The new panel commenced on 7 August 2023 and expires on 30 June 2027 with options to extend.

Under the Labour Hire Panel, Allygroup can now support you in providing labour hire staff for a variety of government positions, including:

Corporate Services

• Accounting and Finance

• Administration

• Communications and Marketing

• Human Resources

Policy and Program

• Service Delivery

• Portfolio, Program and Project Management

• Policy

Compliance and Legal

• Compliance and Regulation

• Legal and Parliamentary

• Monitoring and Audit

Introduction and Placement Services

Allygroup is excited to commence this new journey with our current clients and with the new clients we will meet as a result of being on the Phase 2 Labour Hire Services Panel.

Need assistance in sourcing labour hire staff contact Allygroup at recruitment@allygroup.com.au

We look forward to working with you.

Allygroup joins the Department of Finance People Panel

Allygroup is pleased to announce that we have been successful in joining the Department of Finance’s new Whole of Australian Government (WoAG) People Panel. We look forward to connecting the best available candidates to the more government clients through the panel’s Recruitment and Search Services.

 We would like to give a special thank to our wonderful clients in government who have advocated for our inclusion so strongly.

 Feel free to get in touch with our resourcing team at any time to discuss how the Allygroup team can support you through the People Panel.

‘A unique opportunity’-Covid - 19 legislation and the ACT Human Rights Act

Allygroup paralegal, Ellis Silove has written an interesting article for the Law Society of the ACT's “Ethos Spring 2020” issue.

Ellis discusses the intersection of Covid-19 laws and human rights, and how lessons learned here in Canberra offer an opportunity to lead Australia in thoughtful and ethical pandemic legislation.

To read Ellis' article please click the link: https://lnkd.in/gY4RU7k

Allygroup Coronavirus update

WE ARE OPEN FOR BUSINESS

Our office remains open for business, whilst we continue to monitor developments in relation to the spread of Coronavirus.

LET'S KEEP IN CONTACT

If possible, we will now conduct client, candidate and secondee meetings via telephone or Facetime/Skype. 

OUR FUTURE PLANS

If and when required, we are prepared to work remotely and have plans in place that will not affect the day to day running of Allygroup.  We will still be contactable via email and telephone.

Lexpo: The Legal Innovation Event

Allygroup's CEO Joanne Rees had the pleasure to speak at Lexpo Amsterdam 2018, invited as one of Australia's most respected legal advisors. 

"We'll have a chat at the end" - a $20B black hole

We lawyers detest talking about our fees with our clients, yet analysis suggests this is leaving a $20B black hole in the revenue of BigLaw firms.

Richard Burcher’s firm, Validatum, has worked with over 300 law firms in 18 countries and if there is one common denominator he observes, it is a shared perspective that the price conversation is the most unpalatable and stressful aspect of the lawyer/client relationship.

We will do anything we can to avoid it and for many years, until regulation intervened, we could get away without much of a pricing conversation at the outset or at best, a very vague and abstruse one that kept all our options open.

Most Western legal jurisdictions now have regulatory regimes that require a comprehensive level of engagement with clients around cost at the outset of the matter. Consequently, there has been improvement, although rightly or wrongly, many still hold the view that lawyers approach to pricing remains unacceptably opaque.

Notwithstanding the progress that has been made towards price transparency (the numbers) and pricing transparency (the methodology), the profession continues to let itself down in relation to the ongoing pricing conversation. Pricing should never leave the table as a topic but unfortunatel,y the price conversation is often seen as a box to be checked at the outset and not something that needs to be revisited on a regular basis.

So how is it that we have come to make an art form out of procrastination when we know that this abdication of responsibility is the genesis of the sort of dynamics that we are all familiar with…

(a) shock and awe when you get a time print out at the end of the job (“good grief, that got away from us!”),

(b) difficult conversations with clients (“I’m sorry to be the bearer of bad tidings but…”),

(c) difficult conversations internally (“look I know we said we were going to clamp down on this sort of thing but this really is a good client of mine and we need to take a view on the write-off…”)

(d) “Hey, I’ve got a solution. We have £20,000 on the clock over what we told the client so let’s split the difference and knock off £10,000?”

And there you have it. The largest single reason why the default setting for most firms is broad satisfaction with a realisation rate of 85% to 90%.

Let’s look at the implications of this a little further. Obviously, the net write-off across a firm is never wholly attributable to the dynamics referred to above. But let’s say half of it (7.5%) is. The legal market in the UK is worth approximately £26 billion. That means that perhaps £2 billion is squandered in the fashion described.

A $20B black hole - or more!

Apply this same reasoning to the US market which is worth approximately US$260 billion and you’re talking something in the order of US$20 billion going down the gurgler for no good reason.

I’m sure there will be finance directors who take umbrage with some of my figures and assumptions. I certainly don’t pretend to have brought scientific rigour to the exercise but taking a broad brush view, I imagine we can all agree that we are talking a shed load of money.

Why have a difficult conversation now when we can have it later? This approach is delusional. The conversation isn’t going to go away. There is going to be a conversation and it beggars belief that anyone would seriously think that the conversation is going to go markedly better at the end than a timely intervention when, at an intellectual level anyway, most partners know a discussion should occur.

Nonetheless, our inner voice rationalises and justifies a deferral of the conversation with sage insights such as, “things are developing so quickly, there is just no time to deal with it now”, or how about “the client won’t appreciate being forced to have another pricing conversation mid deal. In fact, they’ll think I’m just taking advantage of them.”

And so, comes the punchline – “we’ll have a chat at the end!”. The problem is that even leaving aside for a moment the regulatory imperative to keep the client informed, the public relations and relationship upside of doing so, the fact that we know clients always appreciate an early heads-up on bad news and conversely hate unpleasant surprises, keeping our powder dry until the end isn’t smart from a negotiation perspective.

In short, renegotiating the price after the event with a client who has already had from you everything that they need, is never going to find you in a particularly robust position.

All of which screams the question, Why? We can wrap it up in all manner of packaging and justification but I am sorry to have to report that it is by and large nothing more than unmitigated cowardice.

If we are brutally honest with ourselves and we ask at a time and in a place that we would never share with our colleagues or anyone else why we are not having the conversation now, when we know we need to, the answer is simple and primal. Fear.

Fear of upsetting the client, fear of losing the client, fear that the client will say uncomplimentary things about us, fear that the client will no longer like and respect us, fear of how things will look internally, fear borne of our own lack of confidence and self-belief, fear borne of our belated recognition that we have done a sloppy job of scoping, fear borne of our suspicion that we may just not handle the conversation particularly well.

And so, we look for the line of least resistance. Say nothing when it needs to be said, have the conversation as late as possible and produce whatever financial mea culpa is required to make the problem go away.

As The Donald would say in erudite and eloquent fashion, ‘bad, very bad’.

Article source from linkedin. Full article can be found here.

Joannes Response to the article

At the core of Allygroup’s work is the increasing appreciation that, since the advent of time based billing, clients and lawyers have stopped communicating effectively. The process of law rapidly took priority over communicating with clients as to what success looks like for the client.

The solution lies in lawyers building lawyers skills in having meaningful conversations with their clients – at the right time - about what the clients actually want to achieve – and to have those discussions very early in the process. If this is done well, it means that the inevitable awkward discussion with clients in the middle or at the end of the case concerning budget over-runs does not have to be had. Instead, all stakeholders are well aware of the status of the matter, what streams of work are necessary, likely or possible and the progression towards the outcome.

This is internal and external stakeholder management taken to a new and vastly superior level. Given the speed and degree of change within the broader legal environment, in order to remain relevant to clients it is essential for lawyers to be proactive in developing their legal project management skills and bring those skills into their management of their legal matters.

Disruption Creates Opportunity

 “The future of legal service will be a world of virtual courts, Internet-based global legal businesses, online document production, commoditized service, legal process outsourcing, and web-based simulated practice. Legal markets will be liberalized, with new jobs, and new employers, for lawyers.”

Would you agree?

This is the future for the legal industry, as foreseen by academic and author Richard Susskind, who is an independent adviser to international professional firms and national governments in the area of IT and the way it is changing the work of lawyers.

Although this sounds shocking, Mr Susskind is not alone. According to a recent Deloitte Insight report (Feb, 2016), 39% of jobs in law will become automated as the profession reacts to the changing demands of clients.  According to the report, the tipping point will come in 2020 – just four years away – as law firms are forced by the needs of clients and employees to develop new strategies to remain competitive.

Deloitte’s report also predicts that in 10 years time there will be fewer traditional lawyers in law firms; a new skills mix among elite lawyers; greater flexibility and mobility within the industry; reformed workforce structure and progression routes and a willingness to bring in people from non-legal backgrounds.

The way the legal industry is being disrupted and the opportunities that this brings to us all is at the core of the Allygroup philosophy. First, what are we talking about we say legal transformation?

This issue has hit our clients first because business is dynamic and business leaders are under constant pressure to deliver more with less, more quickly. The legal industry is slowly adapting to the disruption that clients have been facing; this is an evolving process. 

Changes in the areas of legal technology, legal project management, alternative free arrangements, legal process outsourcing and the flexible workforce are all disruptions to the current model of legal practice. Each presents many new opportunities for our profession. 

Disruption number 1 – Legal technology

We are all aware of the benefits that technology can bring to process automation. At the highest level, technology solutions cut out manually burdensome tasks, remove room for error and accelerate results; the end result is that lawyers are freed up to do the lawyering. Just think how much time LexisNexis and Westlaw saved lawyers over the years by wading though a plethora of cases in seconds! 

Investment in areas such as process / document automation (for example, automatic creation of templates) can save thousands of hours over the years. 

The challenge is choosing the right tools and technology that are going to deliver the best results Firstly, analyse what is currently out there in the market. If nothing suits, partner with another company to develop a solution that will work for you and your clients.

So what is happening now?

1. Global NewLaw giant, Elevate has recently acquired Legal OnRamp. Legal OnRamp’s technology is a powerful shared platform that has enabled Cisco to connect its legal department to its law firms. Legal OnRamp has also done some innovative work with artificial intelligence (AI) using IBM Watson cognitive technology.

2. In Australia – Hive Legal’s Jodie Baber is focussing on AI tools to assist in-house teams to navigate complex regulatory frameworks. Recently Hive Legal partnered with Neote Logic to launch the Hive Legal Super App. This app helped regulated super funds to streamline and bring greater consistency to their breach assessment process.

3. UK firm Riverview Law has developed KIM, a tool to manage and distribute work and save lawyers' time. It is now available in Australia. The focus of this AI technology is to capture data that helps capture legal functions and ensure that the right work is done in the right place by the right people at the right price. This is a key mantra of Allygroup.

The next stop for Riverview is to roll out a tool to actually perform legal work. The firm anticipates a tool being launched later this year which will do lower-level legal work and provide suggestions for what advice should be given. 

Some law firms in Australia are also operating in this space. Norton Rose Fulbright announced in April 2016 that they have joined legal start-up LawPath, to offer a cheaper alternative to traditional legal services to emerging small to medium sized businesses. It does this through an online platform which generates legal documents. In particular, LawPath’s technology provides access to simple pre-prepared legal documents online. The alliance will further offer a subscription service that includes pre-paid hours with a lawyer from Norton Rose. Other law firms such as Gilbert+Tobin have invested in legal tech start-up Legal Vision. 

Disruption number 2 – Legal Project Management

The disruption of LPM is an area very important to Allygroup.  This provides real value to users of legal services – particularly complex commercial transactions and large-scale litigation where spiralling unaccountable costs are one of the major stressors for General Counsel (GC). We often hear “we can’t possibly budget for complex cases because we don’t know what is going to happen”. 

Our response is “change lawyers or engage someone to manage the projects”. 

This process reverses the general trend of “doing” before “thinking”. It values planning – how do you know what should be done if you don’t know what success looks like and what options you have to achieve it?

What opportunities are created by LPM for GCs?

1. Cost savings; 

2. Confidence that only necessary work is being done by the right people at the right time;

3. Confidence of stakeholders that there is a clear strategy and plan; 

4. A plan / budget to monitor and report on;

5. Ability to look at what is working well and what can be improved; and

6. Best means of demonstrating value.

For law firms, adopting this approach can mean being the firm of choice for companies, which in turn means repeat business.

Disruption number 3 –Alternative fee arrangements

Why does the billable hour fee model still dominate the legal industry?

No-one would disagree with the proposition that fee arrangements based on the billable hour have the potential to:

1. discourage efficiency in the provision of legal advice;

2. push the work down to junior lawyers where firms can make much greater profits; and

3. lead to a growing misalignment of law firm and client interests.

The reason that time billing still exist seems to us that:

1. Law firms are unwilling or unable to change their business models;

2. GCs are often unsure that the quality of legal services will be maintained under different fee models. In addition, their finance/procurement arms are comfortable with reporting on reduced hourly rates achieved from re-tendering OR re-negotiating their external legal service requirements.

We regularly told by GCs that managing external legal costs is one of their biggest challenges and in response they are beginning to insist on Alternative Fee Agreements (AFAs) from their firms. According to the 2015 Legal Benchmarking Results conducted by Macquarie Bank, 31% of firms said that billable hours would not be their primary billing method in the next 12 months. These firms said they were looking to other methods such as fixed fee, value-based or other arrangements.

What is working and what will the future look like?

1. Obviously scoping work and agreeing a fee for key deliverables/outcomes provides GCs with certainty and forces the firms to be efficient.

2. Risk-sharing models will become more common. Some of the commercial plaintiff firms have been working with clients on the basis that a part of their fees (25% can be achievable) will be paid on a successful outcome.

3. We believe that variations on retainer models will become more common. It is easy for GCs with a routine volume of work to enter into these arrangements. But variants to annual retainers are being put in place for portfolios of work. 

4. Not paying for firms to train their juniors. Some of the most profitable US firms are not charging for their juniors and instead are offering their partners and senior associates (SAs) at special rates pursuant to fee arrangements that clients perceive as good value. 

Disruption number 4 – Legal process outsourcing

Although capabilities amongst in-house legal teams, law firms, and legal service providers are converging, each has distinct strengths and weaknesses.  

1. While law firms provide deep specialist experience, look good when bringing their "A team” to the table, and often operate in-time-zone, they are expensive and their costs, based on hourly rates, are hard to control.  They typically have limited process or technology efficiency innovation and so have rigid pricing structures.  

2. In-house legal teams have the best understanding of the business, including valuable relationships between lawyers and the business and, like law firms they often provide in-time-zone support.  However, also like law firms, they often have limited process and technology efficiency innovation and there are rarely enough resources to meet demand. This means they lack the time to focus on true value-added work.  Their cost structure is also typically inflexible.  

3. Legal service providers have developed corporate approaches to relationship-building and account governance.  They present capabilities in a way that makes their work look like the client’s process, not the service provider’s process.  They tend to be contractually flexible, very price-competitive, have strong process and technology efficiency innovation expertise, and have global footprints for onsite, onshore, and offshore service delivery.  One of the most advanced examples of legal services integration is Rio Tinto in global partnership with Elevate Services, a provider of legal services, technology, and talent. However, some legal service providers may be too deferential on some issues as they “try to find their place”, have newer, less experienced staff, and can over-promise.

The legal landscape is moving towards a kaleidoscope of providers, with legal operations expertise an increasingly important component of well-managed in-house teams. Best practice companies are adopting a range of delivery models, sourced from multiple providers and designed to handle the full range of legal and business functions, from simple to complex. Law firms can now exploit this fragmentation by matching some of the services that are already being provided by LPOs. For example, firms such as Baker & McKenzie established a legal services processing centre in Belfast, which completes bulk legal services for Baker & McKenzie clients across its international offices. Herbert Smith Freehills has a similar operation in Belfast and established a pilot program in Western Australia last year. 

Alternatively, law firms have the option of entering into partnerships with existing LPO providers with the aim to ultimately free up lawyers to focus on high value-added activities and save money. This will provide better value to clients while maintaining profits and market position.

The drive for LPO will inevitably continue to grow as clients live in a world of relentless cost pressures and technological advances. The secret here is to ride the wave of innovation; this will be best achieved by law firms, LPO providers and clients all collaborating with a view to finding the best approach to delivering value. 

Disruption number 5 - Flexible workforce

The demand within the industry for temporary contract lawyers and paralegals is rising.  Companies are increasingly seeking a variable workforce that allows them to manage costs and workload fluctuations. In addition, lawyers are seeking more flexible working arrangements. 

At the same time, according to the 2016 Commonwealth Bank legal market pulse survey, the top challenge listed by law firms in Australia was fee-earner utilisation - 74% firms are still struggling to keep staff fully utilised. 

As the market for flexible workforce grows, driven by client demand, the opportunity here is clear. For companies, this is a solution to control legal spend. 

Law firms can take advantage of the benefits that a flexible workforce can offer, which is having flexible costs and being able to meet pricing demands from clients. This in turn will mean that the fee earners' time will be better utilised. 

Secondly, law firms can provide a distinct service offering by leveraging their reputation and existing client base. According to the 2015 Annual law firms’ survey conducted by PwC in the UK, “Firms who can nail the art of flexible lawyering through use of contract lawyers will drive a real competitive advantage – just so long as it’s not at the expense of quality”. 

This can be done by either establishing their own flexible resourcing business model or partnering with another existing provider. A number of firms are choosing to invest in/forge partnerships to create a new opportunity from this disruptive influence.

The provision of legal services is rapidly changing, and law firms in order to survive will have to adapt to the disruptions of legal technology, legal project management, alternative fee arrangements, legal process outsourcing and the flexible workforce. So, how can you embrace the opportunities that the change presents?

1. Think positive disruption – start with the mindset that disruption creates opportunity. 

2. The disruptions described are here – it is only a matter of time that they become the “new normal” across the legal industry.

3. When thinking about implementing some of the above opportunities, keep them simple. Overcomplicating the processes/technology is likely to lead to non-adherence.

4. Help is at hand. Experienced NewLaw providers are working with GCs to optimise these new opportunities.  

Adapt or perish, firms warned

Australasian Lawyer, 07 July 2015

Ken Jagger, CEO of AdventBalance predicts that traditional firms will continue struggle in maintaining market share as US and UK firms flood the market, and boutique specialist firms increase their dominance.

According to Jagger, top tier commercial firms have dropped their partnership numbers by around 25 percent on average since 2008, while also reducing their graduate intake.

“I think that it’s fair to say that Australian law firms are excellent … but we’re over lawyered and unless the market expands rapidly and I can’t see that, then the competition for market share is going to become more and more intense,” said Jagger.

New entrants to the market may also struggle to maintain dominance, despite attempts at chasing different segments.

“I also think that some of the UK and US firms that have entered the market may struggle when they realise just how competitive the market is that they have entered in to,” Jagger said. “So it will be interesting to see over the next few years which ones succeed and which ones fail.”

Jagger said that traditional firms may have to adapt in order to keep up with the new players.

“Some traditional law firms will become what we call now alternative legal service providers as well, so instead of the market share continuing to contract their traditional services, they are going to be forced to expand their services to maintain market share,” he said.

“You might see this big divide emerging between the global providers and the local specialists and boutiques with not much in between,” he predicted.

Firms told to get priorities straight

Lawyers Weekly, 1 July 2015

The billable hour tells clients they are not the priority of the law firm, according to an international legal industry expert. Canadian analyst and consultant Jordan Furlong (pictured) told Lawyers Weekly the traditional law firm is structured for the benefit of its owners first, employees second and clients third. Mr Furlong explained that at the core of most firms is the billable hour, which does not encourage efficiency, quality assurance, client communication or the happiness and health employees.

“No business model that truly prioritised clients’ interests would entrench the billable hour as its pricing and compensation capstone,” he said. Mr Furlong will run a masterclass titled Integrating New Law into Your Law Firm at the Australasian Legal Practice Management Association conference to be held in Queensland this September. The sessions will focus on how traditional firms can adopt the innovative practices of New Law firms to improve their internal operations, such as legal project management and working with contract lawyers.

However, Mr Furlong said these “minor adjustments” will have limited gains; if firms are to truly adapt to the new legal landscape they must make substantial changes to their structure and culture, starting with how they price work and compensate employees. Specifically, time-based billing and remuneration models that reward lawyers for business acquisition and docketed hours need to go. While Mr Furlong admitted the traditional law firm model has historically been profitable and delivered quality services to clients, he stressed that clients are unsatisfied with the size and unpredictability of legal bills and the quality of customer care they generally receive from law firms.

“In a client-first market … the old law firm model is breaking down,” he said. The substitutes The rise of substitute goods in the legal market is posing the greatest threat to traditional law firms, according to Mr Furlong. Transactional, clerical, research and knowledge tasks that have powered millions of billable hours in the past will leave law firms and go to lower-cost but sufficiently competent substitutes, he said. “Clients have choices that they’ve never had before; they can use a paraprofessional or a software program or an out-of-jurisdiction lawyer or a New Law provider instead of, or as a complement to, traditional law firms. “Maybe they’ll only get 80 per cent or 65 per cent of the quality and impact of a law firm, but they’ll get it for 40 per cent or 25 per cent of the price, and that’s good enough.

“And over time, those gaps will close. We’re no longer the only game in town, and we never will be again.” If firms want to continue offering these services, they must adopt the methods and motivations of New Law rivals; alternatively, firms can relinquish those tasks and become smaller and higher-value entities, Mr Furlong said. “These are the choices that social, economic and technological forces beyond our control are offering us; all that’s really left for us to decide is how we’re going to respond.”

ACLA: Legal Project Management for in-house counsel workshop

Allygroup, 05 November 2014

Allygroup had the pleasure of delivering ACLA’s half-day program introducing participants to the concepts of our Legal Project Management and our informed purchasing framework for in-house counsel. The program sought to provide practical guidance on how to get the best out of your in-house team and work most effectively with internal stakeholders and external service providers.

Topics covered:

• the Rationale and Cost-benefits of effective LPM;
• identify and implement the essential steps in the LPM framework: scope & strategy, resources, budget, monitor, lessons learned;
• utilise Technology and tools to implement effective LPM principles;
• engage stakeholders to work within the LPM framework; and
• recognise opportunities to leverage lessons learned.

Feedback from Canberra:

• Useful practical ideas and tools.
• Useful framework for effective legal project management.
• Good solid content.
• Practical – met my objectives.
• Case studies were really good and effective.
• Materials were great.
• Great session!

Good news: Australia ahead of the legal innovation game

Australasian Lawyer, 22 July 2014

Joanne Rees, one of Australia’s most respected strategic legal advisers, recently attended a major legal project management conference in Chicago and was surprised by the lack of action legal leaders are taking in other parts of the world.

“They had a panel of presenters from different firms talking about what they were doing in the legal practice management space and I found it interesting that really not a lot was happening, even though firms were spending a lot of money,” she says.

“I came away feeling surprised that there wasn’t the attitude of ‘well, we have to do this’.”

Rees attended the conference expecting to learn about action that legal professionals in Australia have yet to take, but actually found that we are ahead of the trend.

“I spoke to other people over there that were doing consulting work and they were of the view that in fact Australia is advanced in terms of attitude and innovation,” she says.

Rees is the CEO of Allygroup, an alternative legal services provider that advises in-house counsel with the aim of cost-effectively improving the service, value and accountability of their professional legal services.

She’s had a legal career spanning almost 30 years, and was the founder and – for almost ten years – the public face of legal firm Phillips Fox Canberra, where she built the business into one of the largest government practices in the city.

Rees is also currently a non-executive director on a number of government boards and committees, and is the CEO and convenor of the Federal Corporations and Markets Advisory Committee.

She says that despite her findings that Australia is ahead of the innovative legal trend, there is much work to be done especially considering the trends that are starting to emerge in terms of the relationship between in-house counsel and external firms.

There needs to be a meeting of minds between the two groups Rees says, and too often she hears in-house counsel complaining that the law firms aren’t delivering what they want, while the law firms are saying the former aren’t being clear enough.

But one of the biggest barriers to success is the current cost models that are no longer of benefit anyone, she says.

“The only way firms are making profit is by using junior lawyers and paralegals, and these people are taking a hell of a lot longer to do the work, which is costing the clients money… It’s an unsatisfactory model all around…General counsel need to start trialling different models and seeing what is going to work. More and more, general counsel or firms have to come up with some initiatives.”

And the issue is close to her heart – Rees herself has specialist expertise in project-managing high profile litigation and has a track record of managing to reduce legal spend on major cases by 25%.

She says the key is learning from other professional service providers in Australia who haven’t been able to charge by the hour for a long time.

“I think the major challenge for law firms will be that the clients over time will say they won’t pay by the hour, and the challenge with this is their business models are established on charging by the hour.”

The growth and consolidation of in-house lawyers is another major issue within the legal space, she says.

It’s a trend that she doesn’t anticipate will slow down any time soon.

“[Corporations] see under the hourly rate model that they have to pay $500 plus an hour to get senior partner-level advice, but if they pay people to do that in-house, they can get that at a fraction of the cost…the advice is also then a lot more strategic,” Rees says.

The consequences of this are only just starting to emerge in Australia and have seen corporations systematically begin to reduce the number of external firms that they use, in preference for a select few.

These “deep relationships” are almost like secondments where the corporation and the firm know the other’s business intimately, she says.

“This provides a great opportunity for firms…but the real challenge for general counsel is that they could almost become beholden to a firm,” Rees says. “Whether over time general counsel will find it’s actually too big a risk for them because firms realise [they are beholden] and stop offering discounts, I’m not sure.”

Martin Wiseman, the chairman and partner of New Zealand’s DLA Phillips Fox, which has an alliance with DLA Piper, also mentioned this trend to Australasian Lawyer and says it’s starting to creep into the New Zealand market too.

“There are now everywhere large in-house teams of experienced partner level lawyers. They are trusted and strategic advisers to their businesses and astute buyers of external legal services who rightly demand demonstrable value for money,” he says. “As someone who has been very close to DLA Piper for over 10 years now, it won’t surprise you if I add that the law is globalising as general counsel look to a trusted external adviser in one location to look after them in another.”

Legal Project Management (Part 2): Resourcing models

Australian Corporate Lawyer, 01 June 2014

This is the second instalment in our ongoing series on Legal Project Management (LPM) based on our LPM framework.

This is the second instalment in our ongoing series on Legal Project Management (LPM) based on our LPM framework outlined in figure 1. In our previous article, we discussed the critical importance of scoping legal projects and how effectively applying this LPM tool delivers significant benefits to organisations. These benefits include clear project direction, greater cost control, reduced risk and increased stakeholder engagement.

The next step in the LPM model is to ensure that the right resourcing model is leveraged on a project to deliver the apposite mix of
skills and experience in the most cost effective manner. In this article, we discuss how to design such a model, and how the rise of legal process outsourcing (LPO) providers are fast becoming an indispensable component of disaggregated resourcing models.

Designing a resourcing model

When considering the resourcing model it is necessary to:

1. identify the roles and responsibilities required on the project
2. identify the skill sets required for these roles
3. identify where the experience lies, internally and externally
4. ascertain the most cost effective method for obtaining the requisite skills.

Internal or external resourcing?

For discrete projects with a spike workload, the best place to commence looking for resourcing is in-house. If your organisation holds the requisite experience internally and they have the capacity, this will likely be the most cost effective option, as your people best know your business. If, however, your organisation lacks the requisite internal experience or there are other projects competing for those resources, it will be necessary to look at external options.

If the resources to complete the work in-house are not available, it will be important to ask the following questions when considering how best to resource the work:

• what type, level and breadth of external resources are required from the external legal services provider (LPO, niche, mid tier, top tier)?
• what level of experience is necessary with this kind of project?
• would asking selected panel firms to submit proposals in response to a project scoping document be beneficial?
• could a team of panel firms be engaged to provide different services throughout the project?
• are there any parts of the project that would be most effectively conducted by briefing independent counsel?
• is an independent project manager needed?
• what is the likely cost for each option?

Disaggregated resourcing models

Lacking in-house expertise, organisations will often engage law firms to provide all of their resourcing on litigation or transactions. Engaging law firms as the sole resource on major projects may not be the most cost effective approach. Clients are increasingly finding that they are in fact paying for junior solicitors to be trained, with these resources taking longer to complete tasks albeit at a reduced hourly rate. This is inefficient, and does not reflect clients’ needs for more experienced lawyers. Even when firms do not charge directly for juniors, their cost must still be absorbed elsewhere in the firm’s pricing structure, often through higher mid-level and partner rates.

A disaggregated model is often the most cost effective solution when using and managing external resources. Disaggregated models
are approaches to resourcing that bring together a range of types of resources under a project manager who directs and manages the ongoing resourcing for a project. This approach allows flexibility as the project manager can adapt staff levels as the project
progresses, selecting the appropriate team for each phase. It acknowledges that all projects evolve and that resourcing must remain flexible. It also empowers clients by putting them in control of resourcing.

The resources available in disaggregated models include:
• dedicated project manager
• internal legal resources
• external law firms
• barristers (including junior barristers in place of law firm lawyers as a more cost effective option)
• contract/secondee lawyers to support the internal team (and who are about half the cost of equivalent expertise in major law firms)
• LPO providers.

In our experience, cost savings of between 20-25% are routinely achieved using a disaggregated model when compared to the traditional model of outsourcing a project solely to an external law firm.

Dedicated project manager

Your organisation most likely has the resources and knowledge to efficiently run smaller scale commercial transactions. When the transaction becomes larger or more complicated than your internal resources can manage, such as an acquisition or construction or procurement project, it will be appropriate to consider using the disaggregated model or blended team approach. This will ensure the project is run more efficiently and your internal team is utilised efficiently.

Dedicated legal project managers are becoming more common in the management of large commercial and litigation projects, especially those involving government and other industries where the use of project managers is already widely accepted. The legal project manager can ensure that, when using multiple service providers, those providers are working in a coherent fashion. We are even seeing some law firms appointing dedicated legal project managers, most often as a result of client demand. However, the potential conflicts inherent in managing the supply of an organisations’ own resources are almost impossible to avoid in any sector.

A dedicated project manager will need to have oversight and control over who is doing the work when a law firm is engaged. Some thought must also be given to the type of firm that is needed to conduct the particular part of the transaction. Importantly, it will be essential to ensure that over-skilled resources at high rates are not performing or overseeing routine or simple legal tasks.

Contract lawyers

Over the last few years a number of contract lawyer firms have become established in
the legal services market. These service providers have a wealth of talent available on flexible arrangements that can be used on commercial or litigation projects on a short term basis. Of course, law firms have a tradition of seconding their own lawyers to clients and we are increasingly seeing law firms being more flexible on how those lawyers are deployed – a function of the increasingly competitive market.

The role of LPO

Over recent years the LPO industry has matured and become a valuable asset in any general counsel’s arsenal. The most
advanced providers have moved away from the industry’s initial emphasis on “process” and “outsource” and, although both concepts still sit at their core, changing acronyms now suggest greater similarities to many of the traditional services provided by law firms. This new breed of “Legal Service Optimisation” (LSO) provider can deliver significant cost savings in commoditised areas of law typically delivered by junior lawyers, paralegals and administrative staff.

LSO providers excel in areas such as document review and contracts work, patent and IP services, and compliance and regulatory monitoring. Although the use of LSO providers is often driven by cost savings, the most experienced providers also drive up quality, reduce cycle times, and increase resource flexibility. Cost savings alone without these advantages should never provide sufficient reason to embrace alternate delivery structures, making the careful selection of  LSO provider essential. A typical document review, for example, can be delivered at 30-40% the cost of a traditional law firm by an experienced LSO provider. With multiple shifts on a 24 hour rolling basis that review can also be turned around much quicker, with the dramatically lower delivery cost allowing for far more comprehensive quality checking (up to 100% if desired) than is economically possible in the traditional model. Furthermore, in this example, the qualified LSO lawyers (albeit sitting in Mumbai, Manila, or elsewhere) are often “career document reviewers”, enabling LSO providers to build up significant centres of excellence in areas which are traditionally left to junior lawyers desperate to move onwards and upwards to more interesting tasks.

Technology enabling data centres to remain onshore in the cloud, or even on a company’s own servers, whilst optimally located LSO staff do work on that data remotely, has removed many data security concerns. The best LSO providers understand that data security is their lifeblood, and have built mechanisms for its protection that often exceeds that provided by many traditional law firms.

The best providers start with optimisation of legal service delivery, rather than outsourcing per se, as the end goal. That optimisation is achieved through a combination of approaches, including better use of technology and process improvements, not just outsourcing to lawyers and administrative staff that may be based in your building (traditional contract lawyers), onshore (but outside the office), or offshore. The best LSO firms bring this full range of options to an in-house team to meet individual needs, rather than simply “selling what we have”.

LSO providers work directly with in-house teams or are engaged alongside traditional law firms to handle high volume, repeatable elements of broader projects. In doing so companies benefit from the efficiencies an LSO provider brings either as a pass-through disbursement from their law firm, or as a direct expense. The most advanced law firms have already accepted the need to drive greater efficiencies through structural change in their delivery, harnessing LSO providers and fixed pricing to protect (or indeed grow) their margins. So whether general counsel embrace LSOs directly or not, the value LSO providers create is rapidly being introduced into the market. The question is, where will that value be captured?

Next Steps

Scoping and resourcing are two critical elements of LPM. But stopping here does not realise the full potential of LPM. In the next journal we will continue the series looking at budgets. To revisit the scoping article, please refer to the March edition
of The Australian Corporate Lawyer.

Legal Project Management scoping: Why is this so vital?

Australian Corporate Lawyer, 01 March 2014

Allygroup’s CEO Joanne Rees explains why scoping is so important in this first in a series of articles on Legal Project Management.

Scoping of a legal project is possibly the most critical and influential element in determining the project’s success in terms of volume of work, costs incurred and stakeholder engagement.

Scoping is closely aligned with budgeting for the execution of large commercial transactions or complex litigation, but goes beyond budgeting into the realm of legal expertise.

Vitally, scoping enables a legal project manager to retain control of a project as it develops – and to satisfy their business or organisation that they have control over the project direction, the amount of work being done and the costs incurred.

Scoping is fundamental both to the successful implementation of a project and to the control of external legal costs. Without effective scoping, there is little deterrent to prevent external firms from engaging in large bodies of unnecessary work and from thereby incurring potentially very large and unnecessary costs.

What is Legal Project Management Scoping?

Scoping is the first stage in the project management process. It is “primarily concerned with defining and controlling what is and what is not included in the project.”

Scoping is an establishment phase with several main points of focus. In this phase of a project, risks to the project are identified: generally legal, financial, reputational and political risks. Desired project outcomes are determined, with attention to objectives, case theory and negotiation options.

Scoping also involves the development of a project plan, including necessary, likely and possible streams of work; and the establishment of a project team or steering committee.

What are the benefits of Legal Project Management Scoping?

Focus on the client’s desired outcomes

From the initiation of a legal project, scoping enables the project manager to identify the key stakeholders, their interests and objectives. This brings the major benefit of enabling concrete goals to be set by the people with the most interest in them. It also brings clarity to the determination of what success is measured against. When advising clients, external legal service providers can become immersed in legal process, and lose sight of the end goal or the core issues in the dispute or transaction. Lawyers are trained to be the ultimate risk managers, which of necessity leads to a narrow, process focussed approach. Scoping provides stakeholders with a global view of a matter and a strategy that is based on engagement with both the core issues and the client’s desired outcomes.

Clear project direction through early scoping

Scoping ensures that a strategy is determined at the outset rather than after a great deal of unnecessary research and work has been conducted. Without scoping, strategy formation is often completed a long time into the project, at which point costs are already high and the opportunity to drive savings has been lost. Scoping early removes the uncertainty around what the core issues are, provides a clear project direction, and a plan with regard to how many resources will be required.

Controlling costs

Defining project objectives and key issues at the scoping stage of a project provides a framework in which to develop a resourcing plan and budget. This provides an ongoing basis for management, monitoring and reporting, which, in turn, is a rigorous control on external spend.

Effective project scoping helps to control costs by clearly delineating the strategic direction for the project that legal service providers can pursue, as well as necessary, likely and possible costs that will be incurred. Lack of scoping combined with a billable hour costing model fails to provide an incentive for an efficient, bare bones approach to running a project. Firms are able to reactively pursue every angle of a matter or transaction, recording significant fees along the way.

Scoping at the outset will save costs and minimise stress. It will even allow parties to plan for the possibility of unforeseen issues arising, and to put flexible strategies in place to address them. Most importantly, it gives the client control of the strategic direction and project risks. The diagram below outlines how scoping can reduce cost.

Effectively managing risk

Early scoping of a project allows for the identification of risks including legal, financial, reputational and political. Each are crucial considerations as a project develops. More generally, but very importantly, scoping of a project leads directly into an increased ability to control stakeholder engagement and confidence.

Effective scoping not only saves money by controlling what firms can charge, it empowers clients by allowing them to determine how they wish to address the various risks inherent in major litigation and commercial transactions.

The scoping exercise ensures that the client remains in control of the work to be undertaken, and that the work to be completed is targeted and appropriate.

The main considerations when scoping a project

Identify the organisation’s strategic objectives

The overriding imperative to keep in mind in legal project management scoping is the objective of the project. Related to this is the consideration of how the project furthers the business or organisation’s strategic objectives.

Identify the project structure

These two fundamental considerations lead in turn to more specific considerations of structuring the project. At the initial stage of a project it is possible to decide how the project should be structured and how each stage of the project could be broken down further.

Identify the relevant internal and external stakeholders

It is an imperative to identify early in the project the internal and external stakeholders who will need to be consulted throughout the course of the project. Failure to do so could lead to a detrimental impact on the progression of the project.

Identify the internal and external resource requirements

Without effective project management, it is impossible to know what level of internal and external resourcing is required to ensure the effective delivery of project outcomes.

Who should be involved in the project scoping?

Generic project managers bring expertise to a project in terms of strategic alignment and resource allocation. However, large commercial transactions and complex litigation specifically require legal project management expertise. Knowing what to ask for from legal service providers is vital to the extraction of maximum value.

One of the biggest strengths a legal project manager can bring to a large commercial transaction, or complex litigation, is the combination of legal and project management expertise.

Often in-house legal teams have the legal experience but not necessarily the project management expertise to effectively manage a legal project. Another common problem is that in-house counsel often have a commercial or corporate background and don’t have the expertise to manage large litigation projects. Finally, and very commonly, in-house legal teams are very busy and don’t have the necessary time to devote to legal project management. We all know that inadequate project management generally means that the external legal firms’ scope of work is determined by the firm, rather than the client.

It is possible to outsource the legal project management function to an experienced legal project management organisation, if the requisite expertise or resources do not exist in an organisation.

Allygroup managing NSW Self Insurance Corporation's TMF legal panel

Allygroup, 21 August 2013

Allygroup is managing NSW Self Insurance Corporation’s TMF legal panel utilising software tailored by Yarris Legal.

Should any of panel firm LPG system users have technical questions in relation to accessing or using the Legal Panel Gateway that cannot be answered by your internal LPG System Administrator, they should contact the Yarris support line via the ‘Contact Us’ button on the top right corner of the LPG home page.

YARRIS CONTACT DETAILS

Email: help@yarris.com or Phone: 1300 927 747
(Helpline available between 8-6pm AEST, business days)In addition, Peter Galeotti of Yarris is in Sydney this week visiting panel firms to assist with set-up and other queries in relation to the LPG. Peter can be contacted on 0423 228 347.

Any general questions in relation to matters on the system or general procedural requirements should be referred to the Panel Managers at Allygroup.

ALLYGROUP CONTACT DETAILS  

You may submit your LPG-related enquiry to Allygroup via the link on our website – http://allygroup.com.au/panel-enquiries/

Alternatively, you can reach us on:
Email: sicorplpg@allygroup.com.au or Phone: +61 2 9216 9800

Please do not contact SICorp in relation to LPG-related matters.

Allygroup helps keep legal firms in line

The Australian, 21 June 2013

Click here to visit the full article on The Australian.

The growing competition in the market for legal services has given Joanne Rees’s consultancy a growth area: helping companies keep their law firms in line.

Ms Rees, who is chief executive of Allygroup, is increasingly called in to review not just what companies are spending on legal services but who is doing the work.

By acting as a project manager for corporate clients, she claims to have shaved millions of dollars from corporate legal bills.

“I am frequently asked if the law firms hate me,” she said.

But as the general counsel of companies become aware of their new-found market power, Ms Rees is helping them assert that power.

Her position means she hears all the complaints that corporate clients have about their law firms.

Companies are demanding certainty about the cost and scope of work being handled by their outside lawyers.

They are also demanding that law firms stop giving their work to juniors and start allocating it to more senior lawyers who do not need to learn on the job.

“The sorts of complaints that most of our clients are making about what the firms are doing are around the failure to properly understand the scope of works and doing a lot of unnecessary work,” she said.

“The second major complaint is about inappropriate levels of people doing work. More and more clients are complaining about junior lawyers being engaged on projects.

“They are wanting to use senior associates or preferably partners.”

She said companies were prepared to pay for senior lawyers but “they do not want to be paying for them to be trained”.

She said corporate clients were increasingly interested in using contract lawyers for postings to in-house legal departments instead of spending much more for equivalent lawyers at law firms.

“It is about half the cost of what it might be if they were paying those hourly rates to law firms.”

There is also plenty of interest among corporate clients in legal process outsourcing – where Ms Rees’s consultancy acts as an intermediary to ensure that work being undertaken by providers is of acceptable quality.

Ms Rees said that government agencies seeking better deals from law firms were once Allygroup’s major source of business. But banks and insurers are now becoming an increasingly important source of work – particularly when it comes to managing large-scale litigation.

“They are realising that legal procurement and management expertise is very different to black-letter law expertise.”

Companies were finding that their in-house lawyers might not have the necessary skills to ensure outside law firms remained accountable, she said.

Government kicks off cost-saving drive

The Australian Financial Review, 01 June 2012

The federal government’s new system for major agencies and departments to hire external law firms will begin today in an effort to curb a growing legal bill worth hundreds of millions of dollars a year.

Sixty-eight firms have been told they have won a place on a new whole-of-government, multi-use list that will replace inefficient and costly individual agency legal services panel arrangements.

Those firms include the large national firms that have traditionally taken the lion’s share of government spend on external lawyers, which in the 2010-11 financial year was $281.6 million for major agencies and departments. Just 10 firms received 89 per cent, or $250.6 million, of that money.

Federal Attorney-General Nicola Roxon said the list would allow agencies to access a “single streamlined list” that would help reduce costs.

“Streamlining how the Australian government as a whole purchases legal services means we will get more bang for our buck,” she said.

“These changes will mean the Australian government can make more co-ordinated, cost-efficient and strategic decisions when purchasing external legal services.”

The new list has been split into four categories. Government and administrative law has 38 firms, corporate and commercial law has 56, dispute resolution and litigation has 60 and all other legal services are covered by 10 firms. Many firms are listed across a number of categories and some sit in sub-categories such as employment and industrial relations, property and environment law.

Six of the top 10 government-revenue earning firms for 2010-11 have a place in all four categories. They are Ashurst, Australian Government Solicitor, Clayton Utz, DLA Piper, Minter Ellison and Sparke Helmore.

But these firms will now be exposed to increased competition from cheaper mid-tier and boutique rivals. Legal services businesses that specialise in offering lawyers to clients on a casual basis, such as Allygroup, will also vie for government work under the new list.

There is a concern that large agencies with existing relationships with national firms may continue to brief them rather than experiment with new firms. Agencies are allowed to use existing panel arrangements until June next year. Alan Bradbury, partner of small Canberra firm and new entrant to the list, Williams Love & Nicol, said he was optimistic the new system would give his firm access to more government work.

“They have gone to all the trouble that they have gone through to set up the list,” he said. “I am hopeful that agencies will live up to what was intended.”

A second round of applications to join the new list will be held later in the year, with a deadline of September 4.

NSW revamps its procurement process, CEO quoted

Allygroup’s CEO, Joanne Rees, was quoted in the Australian Financial Review on Tuesday 6 March 2012 in regards to government procurement.

The Australian Financial Review, 06 March 2012

Emily Parkinson

The NSW government will scrap fees to businesses to deliver its contracts and give certain of its agencies new powers to buy goods and services direct.

The overhaul will decentralise procurement and give larger government agencies new purchasing powers, a move designed to cut “red tape and thicket”, NSW ministers told industry yesterday.

A centralised body, the NSW Government Procurement Board, will replace the State Contracts Control Board, and comprise directors-general.

Michael Coutts-Trotter, director-general of the Department of Finance and Services, said he hoped the new structure would simplify doing business with the NSW government, which spends an estimated 12.7 billion on goods and services annually and has the largest expenditure under whole-of-government contracts, according to statistics in its discussion paper.

Mr Coutts-Trotter said past procurement often produced poor outcomes for tax payers and provided limited opportunities for small to medium-sized enterprises.

“We’ve made it … too easy for people bamboozled by this rule book to suspect the decisions that those rules produce,” he told about 100 industry executives, including information technology, energy and pharmaceutical company heads.

While some welcomed the plans, others doubted how they would cut red tape. Joanne Rees, chief executive of legal management consulting firm Allygroup, said more skilled public servants were needed. “Often departments and agencies don’t have procurement expertise and are not out there to be bold and innovative,” she said.

Andrew Stevens, managing director of IBM Australia, told ministers he wanted the framework to address probity issues. “In the past that has got in the way of innovation being offered because people were concerned their intellectual property would be shopped around as part of the tender process,” he said.

Mr Coutts-Trotter said procurement would be more efficient if it was devolved to agencies with a direct interest in the goods and services they bought.

The supply management fee of up to 2.5 per cent will be removed on July 1, as existing contracts expire.

Allygroup’s Legal Services Procurement Checklist published on ACLA

Allygroup, 26 October 2011

Allygroup’s leading practice legal services procurement checklist has been published on the ACLA website. If you are an ACLA member, you can access the checklist at: http://www.acla.com.au/resources/legal-services-procurement-checklist.