Microsoft and Integreon Team Up for Legal Outsourcing

With law departments looking to increase efficiency (and save some cash), legal process outsourcing has become an appealing way to streamline commoditized legal work—54 percent of departments that responded to Corporate Counsel’s “2013 Legal Process Outsourcing Survey” said they’ve tried LPO, and most said they were either “satisfied” or “very satisfied” with the services rendered.

One Fortune 500 company with some prior LPO experience—Microsoft Corporation—decided to take outsourcing a step further in 2009, by partnering with Integreon Managed Solutions Inc., a legal solutions and LPO provider, to improve its contract review process. What resulted was a reduction in legal review time from three days to less than one, a 98.4 percent quality rate, and a 2013 “Outstanding Legal Service Provider” award, given to Integreon by the International Association for Contract and Commercial Management (IACCM) for the ongoing project.

Mark Ross, vice president of legal process outsourcing at Integreon, told CorpCounsel.com that the situation at the Microsoft legal department when they issued a request for proposals for an LPO provider was quite similar to that of many other departments at the time—the company was looking to keep costs in check, even as they saw their legal workload rise. “If you look at all of the changes taking place across the legal profession, you keep hearing the words: more for less,” Ross said.

He explained that this need for increased efficiency, combined with more globalized, cross-border legal work and new technologies, creates “a perfect storm for change” in the ways law departments are doing business—and Microsoft is no exception.

In 2009, the Microsoft legal department, which had used LPO for basic patent work but never before for legal review and assessment, was dealing with a growing volume of routine procurement contracts through its Global Contract Office (GCO), as well as a need to staff more complex transactions.

This high-volume, low-risk work leant itself to outsourcing. “It was really all about efficiencies,” Lucy Bassli, assistant general counsel, legal and corporate affairs at Microsoft told CorpCounsel.com. “It was the ability for me to have a more operational and process-oriented approach to the work that my team was doing.”

Microsoft found what Bassli called an “amazing, open and honest” partnership with Integreon when the law department chose the company to run its LPO—and Integreon seems to think quite highly of Microsoft as well.

Ross said that Microsoft approached LPO in exactly the right way, by both examining its existing legal processes to identify room for change, and exploring the opportunities that outsourcing could provide.

“If you enter into a legal process outsourcing relationship where you’ve undertaken a rigorous study of your own existing legal processes, then by working in tandem with an LPO like Integreon, we can then collaborate much more effectively with our clients to define service levels, performance metrics and a governance protocol,” noted Ross.

Ross credited the Microsoft legal department, which undertook a six-month study of its processes and an internal Six Sigma training, for its ability to analyze its own workings. “The worst thing a client can do is just throw something over the fence that is broken and expect the LPO provider to both fix it and improve the service,” he emphasized.

At its start in May 2009, the Microsoft LPO program consisted of a team of seven Integreon paralegals in Fargo, N.D., doing procurement contract review. By August 2013, the team had 21 members working on almost 20,000 contracts per year. The team, which dedicates all its resources to Microsoft, now has another office in Bristol, U.K., and provides support in 14 different languages. In August 2012, Integreon took over the company’s internal contracting help desk as well.

Besides simply assigning low-risk legal work elsewhere, Integreon and Microsoft also developed ways for the new outsourced legal team to work smarter. Using Lean Six Sigma techniques, the two companies developed a “playbook” to document the legal review process, created service-level agreements and worked up a set of performance indicators. The new team, after spending time with Microsoft, was able to suggest new ways to streamline the tech giant’s contracting processes as well.

According to Ross, the Microsoft case shows that while “LPO 1.0” a decade or so ago might have been mostly about labor arbitrage and cost savings, the focus has shifted. “Today it’s about process improvement, process reengineering, improving both the efficiency and the effectiveness of legal services,” he said.

So, will the partnership between the two companies continue? Bassli said that she’d love to continue building on the current foundation by adding new contract types. Given her experiences, she believes that outsourcing from a company like Integreon can help other businesses as well, even those smaller than Microsoft. “There’s no reason why it wouldn’t work,” she said. Perhaps the only difference, she noted, would be that smaller companies don’t have enough volume of legal work to justify using an exclusive team for LPO like her company did.

Bob Gogel, CEO of Integreon, advises companies interested in LPO to look carefully at costs, service-level improvement, and their own growth projections when determining if a service like Integreon’s is right for them. They should remember, he said, that they don’t have to go big with LPO immediately.

“I’d tell most organizations that are reluctant: Start small and try a piece of your operation that you can outsource, and make sure it’s right,” he said. “It’s not right for everybody, but it’s right for a lot of people.”