Imagine you are the recently hired chief legal officer (CLO) or general counsel (GC) of a corporation. Previously a practicing attorney, your new role is to oversee a crucial corporate function: legal operations. How do you identify, collect and manage information to prepare for your ultimate task: analyzing the data to help effectively communicate to your legal department on topics like value and performance?

The delivery of key information in an efficient manner is a subject near and dear to our hearts. As members of a law firm that serves as national coordinating counsel and resolution counsel, we leverage many technological tools, among other things, to assist global clients and their outside counsel. We deliver many of these innovative tools through a technology subsidiary that develops systems that quantify data and assist corporate legal leaders navigate the paradigm shift from a practicing legal expert to a corporate manager.

With this in mind, we share some day-to-day operational challenges faced by clients, coupled with our technology-supported legal strategies, designed to serve the needs of CLOs, GCs and their direct reports.

Need: Track Matter Metrics

• Day-to-day challenge: Design collaborative tracking mechanism.

Just as buildings need strong foundations, legal departments require solid data upon which to base their decision-making and analyses. Indeed, it is difficult to imagine a senior legal department member who does not need to quantify the overall number of legal matters being prosecuted or defended by the company, determine their status (e.g., open, pending, closed), delineate the outside counsel handling them, classify matters by category (i.e., matter type, geography, venue, business unit) and capture in-house attorney assignments. Having collaborative, web-based matter management systems to track a department's caseload is essential, particularly when data volumes of large nationwide litigations create voluminous datasets.

In our experience, enterprise-grade matter management systems, easily customizable to an organization's unique needs (e.g., its products, business units, facilities), are a valuable and necessary building block. With tools like this, we're able to track data elements important to our clients. Data can easily be summoned for analysis to determine current trends in litigation filings, likely trial cases, approaches to litigation strategy, and even the value of current and future claims. No matter the volume of data, quick and accurate reports tailored to the client's needs are always available. At one time, data tracking and analysis was attempted through the use of localized tools such as spreadsheets. By comparison, metric-tracking technology is akin to the advancement in space technology achieved between the Apollo and SpaceX programs.

Need: Quantify/Report on Legal Spend

• Day-to-day challenge: Identify all legal expenses spanning the entire organization.

Legal departments need to understand their spend before they can optimize it. Therefore, collection of cost data is the cornerstone. This, however, is easier said than done. Within most multinational corporations, legal costs are incurred in diverse ways. Of course, a legal department directly incurs most expenses. But what a company deems legal spend may also include costs that originate elsewhere including in each of its business units. For example, Human resources may need to retain immigration counsel to secure employee visas. Sales groups may directly retain law firms to work on contracts. International operations can further obscure legal cost determination. The absence of in-house attorneys in certain countries may necessitate direct retention of outside legal assistance within a given country by business leaders in that country.

What is the solution? For some clients we've constructed systems to help with the collection and tracking of worldwide legal expenses. These systems span multiple accounting systems. This allows those charged with tracking legal spend a mechanism to enter applicable invoices regardless of the project, legal function or country from which it originates. The consolidation of data coupled with the ability to state expenses in a common currency facilitates analysis via the creation of customized reports for legal and financial leadership.

Need: Process Improvement—Litigation Discovery Requests

• Day-to-day challenge: Coordinating efforts among disparate business partners.

Let us now shift our focus from collecting and reporting data to the implementation of process improvements. In this example, consider a nationwide mass-tort litigation in which a company is inundated with similar, but not identical, discovery requests from a nationwide portfolio of lawsuits.

The issues abound: collecting requests and prioritizing them, developing clear communication flows between various stakeholders (local counsel, national coordinating counsel, discovery counsel, the client) and meeting court-imposed deadlines for each matter. Major objectives include minimizing request delays, effective use of prior learning and research and consistency in discovery responses.

It can be a daunting challenge to unravel the morass of discovery requests arising from multiple jurisdictions and concerning many thousands of cases. To bring order to the chaos, the solution lies in designing systems to track requests and integrate process workflows (e.g. tracking requests from submission through workflow steps to completion). It is also useful to incorporate timely notifications to all key stakeholders, and generate tickler and exception reports for in-house counsel and national coordinating counsel. In this way, discovery deadlines may be prioritized and met through efficient, streamlined systems.

Furthermore, opportunities exist to use artificial intelligence (AI), net neural and machine learning technologies to automate and streamline the process of responding to discovery requests. Simply put, such technology operates by first ingesting a representative sample of historical documents, such as interrogatories, into an AI engine that examines empirical responses and identifies trends. Then, linguistic algorithms and predictive analytics are applied to discovery demands to assist in the automated generation of the completed or near-completed work product in a more efficient manner.

Need: Decision Support—Regulatory and Operations

• Day-to-day challenge: Refactoring and molding data for financial and insurance purposes.

Many items in the line of sight of the CLO are highly recommended, but admittedly optional. Others are compulsory. For example, due to legislation like the Sarbanes-Oxley Act, comments on financial statements relating to litigation must be appropriately supported with data. Matter management systems are essential components supporting regulatory compliance.

Notifications to insurance companies about claims, demands and payments for legal spend are yet other areas over which the CLO may have an oversight role. Even when companies are insured against litigation loss, it is critical that timely and accurate supporting documentation be available to support demands for payment. Before making payments under a policy, insurers often require extensive information to support a claim that may include reports listing claimants, including personal medical information, date of loss, injuries alleged, the products at issue, and the defense costs and settlement amounts for claims. Also, not uncommonly, leading insurers often request read-only access to data from case management portfolios within a matter management system in order to evaluate claims.

The adoption of sophisticated, customizable matter management systems is an essential element of the overall strategy to provide departmental leadership to the in-house legal function.

Need: Effective Management of Spend

• Day-to-day challenge: Firewalling inappropriate costs before they arrive.

Any analysis of the key elements important to the management of an in-house legal department would be incomplete without discussion of cost control. Now more than ever, due to business conditions created by the pandemic, technological tools that help identify inefficient legal spend are vital. Not surprisingly, all of the analytical concepts in this discussion contribute toward that important objective. But the "firewall" is yet another tool to address the problem of avoidable costs.

To attempt to compare the technology function to legal spend, consider the world of data security. Securing a law firm's network is a complex topic, but we all probably can agree that a firewall is an essential element of the process. And one does not need to be a super techie to understand what a firewall does—it is designed to protect the enterprise from undesired intrusions.

Applying that concept to the legal function, we have created technological tools to identify less-than-optimal spend for our clients. To do this, one needs to first collect task-based invoices. (We use the ABA LEDES format.) Next, clients need to develop appropriate billing "rules" for the legal professionals assigned to a matter. The rules generally define approved timekeepers, develop a valid rate structure, prohibit certain types or volumes of expenses, assure that timekeeper types are matched to appropriate work and mandate legal spend is not charged to an inappropriate or closed matter, i.e., no general matter billing.

The specific rules and processes are not as important as the overriding concept that costs can be evaluated and controlled prior to, not after, they are submitted for payment to the company.

Summing Up

Opportunities exist to turn CLOs and GCs into "superstars" by assisting them make informed decisions through strong legal "ops." We hope our summary of some tactical, technology-based approaches, supported by our experience partnering with legal operations personnel at many companies, helps create a roadmap for improvement within other corporate legal operations teams considering technology and data-based approaches to help achieve their goals.

Kenneth Jones is chief technologist of Tanenbaum Keale, a boutique litigation law firm, and chief operating officer of the Xerdict Group, an SaaS legal collaboration software company. Xerdict is a wholly owned subsidiary of Tanenbaum Keale.

Robert M. Gilmartin Jr. is a partner at Tanenbaum Keale. An experienced litigator, Gilmartin spends much of his time analyzing and strategically coordinating the handling of mass tort cases, focusing on the construction and mining equipment industries.