From left to right: Alan Bryan, Nathan Brown and David Nichols at the 15th annual Federation of Defense and Corporate Counsel Symposium in Philadelphia. Photo by Dan Clark/ALM

Walmart Inc. sells billions of pounds of bananas every year. In one month, however, the legal department will spend more than what the company sells in bananas, Alan Bryan, senior associate general counsel, told a crowd of attorneys on Tuesday at the 15th annual Federation of Defense and Corporate Counsel Symposium in Philadelphia. That major cost, he said, prompted the need for the legal department to develop a legal operations function and control spending.

“In a month of legal spend we will more than eclipse our year of banana sales,” Bryan quipped. “That gives you an idea of why you have to become more efficient and why legal departments have been.”

He explained that until the turn of this century, the large retailer was heavily leveraging outside counsel and realized that, along with the policy of taking all cases to trial, needed to change. The first issue that Walmart needed to fix was a lack of centralization in the legal department.

Walmart's legal department first put all of their outside counsel on the same engagement letter—they decided to have the same terms for all outside counsel.

“What we had found is that sometimes with the same firm, we would have different engagement letters,” Bryan explained.

Walmart's legal department then took all of the data it collected over the years and organized it to be easily searchable.

“We wanted to be able to accomplish an accurate way of reporting out on things like spend and the performance of outside counsel,” Bryan said.

There was also a turn toward time-saving technology that would allow lawyers to take more time to focus on more difficult tasks.

“We announced a partnership with a company called LegalMation and we're using software to take a complaint filed against the company—generally speaking in tort and in general litigation matters—feeding that complaint into the system and the system, within two minutes, kicks out an answer, a first set of interrogatories and a first set of requests for production. That is reviewed by an attorney but what we've found is that it is saving 60 to 70 percent of the time that would normally take to review that complaint,” Bryan explained.

For Nathan Brown, corporate counsel at The Kroger Co., its technology is not on par with Walmart. However, the values and ideas for creating the most efficient legal department are the same.

“They [Walmart officials] are really the thought leaders in this space,” said Brown, who used to work in-house at Walmart.

At Kroger, Brown explained, the principles are the same and communication with outside counsel is key for keeping costs down. He explained that every couple of years Kroger will bring in its outside counsel to make sure their goals are the same.

“It's surprising sometimes how many of them get and become our rock-star outside counsel and some that just don't get it and sit in the back and work on their phones,” Brown said.

At Kroger, Brown said he is against a process-based approach to litigation. He explained that every case is different and it's important for both outside and inside counsel to understand that.

“I really want people who are proactive and know what our appetite for risk is before they just say 'well this is my plan and here is my budget' and it looks like every other plan that I see on every other case,” Brown said.