Curt McDaniel will soon learn if the investment in operations and technology he initiated about half a dozen years ago for his 70-person legal team is paying off.

Preliminary data from the technology his legal operations team put in place for contract management, outside counsel billing and IP management, among others, has been promising. It shows costs aren’t rising as quickly as they were before. He’ll soon have more complete data.  

“I want better data to prove it,” McDaniel, chief legal officer at global pharmaceutical company Ferring, based in Switzerland, told LinkSquares CLO Tim Parilla in a webcast in June.  

His hypothesis — and the argument he made years ago to justify the investment — is that the right mix of legal operations expertise and technology will free up his attorneys to be more productive on high-value legal work by empowering business units to manage low-value tasks themselves through the use of automated tools. Using outside counsel less is also part of the mix.

He got a quick win when his operations team automated confidential disclosure agreements, enabling sales and other units to take care of those without having to involve attorneys. 

“We’ve all spent a lot of time on CDAs and the attorneys realized we probably added very little value to that process,” said McDaniel. 

That was a relatively easy implementation, he said, but implementations have gotten progressively harder. Getting e-billing in place was more involved and contract management has been harder still because of the preliminary work that has gone into it, and it’s been a heavier lift getting people to use it the way it’s supposed to be used. As the system is designed, people in the company’s business units can initiate and track contracts; attorneys get involved only when there’s an issue.

“Our legal team was used to a more personal relationship with the business partners,” McDaniel said. “They talk, come by their desk, solve issues, and now your business partner starts the agreement, in our contract management tool, and then if you need to be involved, we’ll come to you. That is a challenge. We’ve had to push them.”

It’s mainly the contract management data that McDaniel indicated he’s waiting for to get a sense of the tech investment making a difference. 

“We’re very focused on getting data because my hypothesis is that, by implementing legal tech, by outsourcing, by simplifying, we won’t have to increase headcount as fast, won’t have to use outside counsel as much,” he said. “I don’t think costs will go down; they should not grow as fast. That’s a hypothesis. Now I want the data to prove it.”

McDaniel saw technology as a possible solution years ago after reading about the promise of artificial intelligence, he said. He persuaded the company’s then-CLO to send him to a big AI conference in Phoenix and while there, he met consultants who he asked to help him create a technology roadmap, which has led to where his team is now. Key to putting the roadmap into practice was creating a legal operations team. 

“I had no time to implement these things,” he said. “They take a lot of preparation. So, when we built that roadmap, we started building the legal operations team along with it.”

It’s largely fallen on the operations team to get the technology built out and also get people to use it, which has been challenging for the contract management system. One solution McDaniel and the team are trying is having one of the legal department’s tech-comfortable attorneys act as an ambassador. That person’s role is to represent users by making sure the technology is implemented in a way that takes into account people’s comfort level using it. That person also helps people understand that the changes will benefit them over time.     

“In addition to her day job, we’ve given her ‘legal innovation’ in her title so she’s working hand in hand with the legal operations team to move things forward,” he said. “This way, the lawyers feel like they’re represented. They’re part of the process.”

To better manage outside counsel costs, in addition to implementing the e-billing system and using more alternative legal services providers — outsourcing lower-value work to lawyers not working in a traditional law firm — McDaniel has been encouraging his in-house lawyers to do more of the substantive legal work themselves rather than reflexively hand it off to the law firm partners they work with. 

“There’s a habit,” he said. “An issue comes up. They pick up the phone and call outside counsel. Sometimes I say, ‘But you know the answer. You’re an expert in this area. You don’t need to call them. There may be a twist and you want to bounce it off them. That’s fine. But most of the time you need to have the confidence you can answer this yourself.’”  

If the data he’s waiting for comes in positive, he’ll be able to make the case that the addition of legal operations and technology is slowing the rise of costs in his department. That’s the best-case scenario. But even if this is what the data shows, he still needs to make sure his C-suite colleagues understand that this is a win, even if he can’t show costs declining. 

“My chairman wants the data to prove … costs will go down,” he said. “I’m like, ‘No. Maybe they just won’t go up as fast.’ We have preliminary data that looks pretty good for that narrative.”