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By Lisa Girmscheid*
In 2005, a year after becoming Rockwell Automation’s new General Counsel, Doug Hagerman set a goal: to become an “information-enabled department.” At the time, Rockwell Automation — one of the world s largest industrial automation companies, serving automotive, food and beverage (including dairy), personal care, life sciences, oil and gas, mining, and paper and pulp markets — had no tools available to monitor and report outside counsel spend.
Rockwell Automation, like many other companies, wanted to become more cost efficient, have the capability to perform benchmarking, make the best staffing decisions and serve the business proactively by providing legal advice that helps lower and manage the company’s risks. With the help of an outside consultant, Rockwell was advised to implement a solution that combines e-billing, matter management, and reporting — a fairly new concept back in2005.
Doug Hagerman enlisted Lisa Girmscheid as his Law Department Administrator and Project Manager to successfully lead the team in implementing a legal enterprise management system from Bridgeway. “Selecting, designing and implementing an e-billing/matter management solution can be tricky business,” said Girmscheid. “We know this firsthand, because we implemented two different solutions in the span of three years.”
Four Keys To Success
Success Key #1: “Tone from the top” is the key to a successful implementation. If the General Counsel and other law department leaders don’t buy in to the idea; neither will the users or outside law firms. Recognizing this, Doug Hagerman, Rockwell’s General Counsel set the tone early and challenged his team with the goal to be an “information-enabled department.” Girmscheid stated, “Doug set the tone and the expectation early on. His vision and supportive direction has been instrumental in guiding my team in every key decision and communication internally and to outside counsel.”
Internally the Rockwell team responded to the call. Girmscheid stressed the importance of getting to know the system and alerted management that key staff will bespending a considerable amount of time supporting the new implementation. She said, “This is a temporary situation, but it is critical that you allow this level of attention to the project.”
Externally, Rockwell held firm on the decision that if a law firm wants to do business with them; they will comply with their billing requirements. “Well prepared and organized communications endorsed by the General Counsel are essential when you contact your law firms about your project,” said Girmscheid. You must decide what your requirements are and really mean what you say. Out of almost 150 firms instructed to submit e-bills, only one firm refused. Girmscheid stated, “We no longer use that firm, and we’ve never had another firm refuse.”
Success Key #2: Don’t rush your custom business and invoice rules. Many clients attempt to make the system perfect on day one with every requirement in place. Girmscheid took a more pragmatic approach.
Rockwell went live with the matter management and e-billing solution by using the pre-defined rules, with the plan to add custom rules in the following months. Girmscheidsaid, “Take the time to decide what you can use out-of-the-box, and later fill in any remaining requirements with custom rules. The standard rule set will meet most of a client’s needs.” Girmscheid noted, “The more diverse your practice groups are, the tougher it is to build custom rules that will work in all areas. What works for your patent prosecution matters may not work for your litigation matters.”
Now a couple years post implementation, Rockwell has implemented 16 custom rules and integrations to further automate and enhance their solution, maximizing the value of their solution.
Success Key #3: Establish a “big bang” go live for law firms. Every client starts out with the objective to require 100% of their law firms to submit electronic bills, but few take the plunge. Rockwell took it. They required all of their firms to e-bill on day one, the first day of their fiscal year. Starting at the beginning of a fiscal year made sense because it allowed us to capture a full year of data in our year-end spending reports. It was s also the logical time for us to send out annual communications to law firms regarding billing guidelines, matter budgets, timekeeper rates, etc.
Rockwell is also fixed on the invoice format they require from their firms. Detailed electronic bills must include task and expense codes, timekeeper rates and line item descriptions. Girmscheid stressed, “If you allow a firm to enter only basic information about fees and expense, you give up your ability to audit invoices against your billing guidelines. If you allow a law firm to mail invoices, you are essentially giving up all benefits of having an electronic billing system.”
Success Key #4: Build solid relationships with your law firms to achieve full adoption. We prepared our firms by adopting these 5 principles:
1. Provide clearly written technical instructions about submitting e-bills.
2. Take the time to validate timekeeper information well before “Go Live.” Do this you will need a list from each firm that includes timekeeper name, ID, rate, and other items required in your design. Run these lists past the law department staff to ensure accuracy.
3. Opt for basic fee arrangements for at least the first 6 months. Creative alternative fee arrangements will be easier to manage after you’ve had a chance to figure out how your system works.
4. Provide training on your billing guidelines. Your billing guidelines are probably the most important piece of communication you’ll send to your firms. It is important to highlight your requirements about UTBMS task, activity and expense codes. UTBMS codes are not as familiar to firms who practice internationally, so pay special attention to those firms. Remain committed to the standard UTBMS code set because customized codes will only complicate things for your law firms. Explain how and why invoices may be rejected or adjusted, and how the firm can rectify the situation. Provide contact information for both technical as well as matter-specific resources(law department contact, etc.). It also helps to provide a direct contact in your accounts payable department if the firm has a payment question.
5. Consider not passing on e-billing costs to your firms. “This strategy gives us more leverage,” said Girmscheid. “This helps us enforce billing guidelines, and also gives the firm no excuse for failing to meet our guidelines.”
Now that Rockwell’s solution has been in place for two years, Girmscheid reflected on their implementation. “Our matter management solution offers a high level of configurability, so it is important that your administrator(s) receive advanced training in using the application.”
The time that her team focused on the implementation allowed them to reach steady-state much faster. To do so, the team scheduled regular weekly conference calls to help identify and resolve issues quickly. Rockwell also reviewed their billing guidelines yearly and delivers revisions to their firms along with a “Message from the General Counsel.” The message is in a “State of the Union” format and includes information about economic conditions for manufacturing companies and how important it is for the law department to not only manage risk, but also keep legal costs to a minimum.
“This is not technology that you can just set and forget,” said Girmscheid. There is still a need to make sure things are running smoothly. Girmscheid recommended, “Establish a process to ensure data quality in the system. Run maintenance reports regularly to make sure invoices are being submitted in accordance with your billing guidelines, and to also make sure internal users are approving invoices and maintaining data integrity on their matters.”
Rockwell has accumulated five fiscal years’ worth of data in the system, so now the main focus is on harvesting that information in a way that helps them assess, in hindsight, how the department is doing. Girmscheid stated, “We have been successful in reviewing our performance and the performance of our top 10 law firms. We are now providing more focus and effort in developing reports and dashboards that are more forward looking.”
Law Firm Reviews – Putting Data to Good Use
In the fall of 2010, Girmscheid led the team to produce a set of management reports. Rockwell selected their “top 10” U.S. firms and using the data from the matter management solution, she created a portfolio for each firm. The portfolio provided reports such as:
• a historical view of the firm’s total spend for the past five years
• spend per matter
• hours billed by timekeeper and role in the firm
• hours billed to each task code
• amounts billed to each expense code
• hours billed per diverse timekeeper
Each law firm was provided with a copy of their portfolio, and meetings were held between the firms’ managing partner and the Rockwell legal team. Girmscheid said, “The response by the firms and from the legal team was very positive. Sharing the portfolio with each firm has really enhanced our level of communication with our top firms and highlights the importance of our relationship with them.”
Rockwell Automation – Reaching For Higher Objectives
Rockwell’s General Counsel, Doug Hagerman’s began with a goal in mind. His goal: “To become an information enabled department.” Rockwell’s matter management and e-billing solution is not just about electronic billing. We clearly met the objective of getting invoices paid electronically. They are also beginning to realize the true benefit of their e-billing solution in that they are a legal team that is more cost efficient, can make better decisions and are better positioned to proactively provide legal advice to the business units which in turn lowers the company’s risks. Rockwell Automation is focused on the continuous improvement of the solution and reporting their results. As such, they are setting their sights on new and higher objectives into next year to provide dashboard type reporting that will allow the legal team to make better decisions with more forward-looking metrics and dashboards.
*About the Author
Lisa Girmscheid is Law Department Administrator and Project Manager at Rockwell Automation, one of the world s largest industrial automation companies, serving automotive, food and beverage (including dairy), personal care, life sciences, oil and gas, mining, and paper and pulp markets. Contact her at lcgirmscheid@ra.rockwell.com or learn more at www.rockwellautomation.com
