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Q&A with ACC Value Champion 2013: British Telecommunications

Thursday, September 12, 2013

British Telecommunications (BT) has been named one of this year's Association of Corporate Counsel (ACC) Value Champions. Value Champions are legal departments and law firms recognized for implementing client service models that deliver results while keeping efficiency high and costs low.

BT’s winning innovation came about largely through the efforts of Chris Fowler, General Counsel for UK Commercial Legal Services at British Telecommunications, and David Eveleigh, General Counsel of BT Global Services. Chris and David describe here how this process innovation came to be, and the benefits and challenges in it implementation.

Q. Briefly describe the client service innovation that recently won an ACC Value Challenge award.

A. BT’s initiative aimed to optimise legal value within a corporate in-house contracting environment by implementing ‘best-sourcing’ initiatives to track demand, complexity and consequently deliver the right-size blend and cost of, in-house, off shore and external resources to the appropriate task. By ‘legal value’ BT means, that the complexity/value of work determines the appropriate resource to be used and cost to be incurred.

BT pursued several initiatives to improve legal value and reduce its total cost base, by focusing on the consistent definition of tasks and use of its Legal Process Outsourcer (LPO) to:


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  • Implement a ‘legal front door’ to ensure all legal work requests are logged and independently triaged and subsequently sent on to the right resource at the optimal cost. This also enabled the legal department to better forecast demand for its services;

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  • Provide on-going cost/value analysis of the work undertaken by all levels of internal and external legal counsel;

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  • Set personal objectives for internal staff to financially incentivise increased LPO usage themselves for discrete sub-tasks which allowed the in-house team to move up the value chain by spending more face-to-face time with external BT customers and less on higher cost external counsel;

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  • Increase legal training and use of contract template generation software to facilitate self-service by BT’s business communities;

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  • Move the in-house BT legal team up the value chain by focusing them on complex / higher value customer facing activities

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Q. Describe the forces in your company and/or your environment that resulted in the innovation(s).

A. BT’s business was evolving from a UK-centric telecommunications provider to a broader global IT infrastructure service provider but in a scalable way in which costs were transformed and service improved. As an integral part of BT, it was incumbent on BT Legal to demonstrate how it was contributing to optimising its costs and improving service quality. This required us to put greater operational focus on “what” we were doing rather than “who” we were doing it for, identifying and optimising internal and external costs and operational focus (by conciously mapping task complexity with cost), broadening our LPO usage and reducing our external spend. The savings generated allowed us to invest in moving high skilled resource to growth markets such as Asia Pacific.

Q. You have taken an innovative approach to sourcing legal services. Please explain what legal service provider options you considered before arriving at your solution.

A. We considered a variety of insourcing and outsourcing options but quickly concluded that regardless of who did it and how it was to be undertaken in the future we needed to build a consistent baseline to the collection and reporting of what our internal and external resources where doing and how much it was costing. The project was split into stages:

Stage 1 – Evaluation

A detailed time-motion study was undertaken to understand in detail:


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  2. What tasks team were being undertaken (e.g. drafting, negotiating, administration, project management, research)?
  3. Were they being done efficiently, consistently and were there productivity opportunities?
  4. Was the team structured appropriately?

Stage 2 – Best Sourcing and Tracking

Next, the following measures were put in place for 2012:


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  • A ‘legal front door’, managed by the LPO, requests for all legal work are routed to the LPO initially to better help us manage the demand for our services. Using a process matrix, the LPO triages the request (which is provided in a web-based form) based on its complexity, then either does the work itself, or passes it to the BT in-house team. This ensures low value/repeatable/high volume tasks are undertaken by the LPO on a consistent basis and high value / complex / external customer intensive work is directed to higher cost UK resource. By the end of 2012, approx. 30% of all work requests were handled exclusively by the LPO.

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  • Expansion of LPO Work. BT increased the number of tasks performed and people engaged by the LPO. At contract commencement the LPO handled approximately 38 legal and non-legal work request types. Currently, 76 different work request types are undertaken by the LPO. In addition the LPO team has grown from 12 to 20 (see graph below).

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  • Targets. The team was set objectives to increase use of the LPO and to consider cost/benefits of using external counsel. Our target was to increase Legal Value overall by a minimum 10%.

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LPO Work Request—Volume Distribution

 


 LPO WORK REQUEST—VOLUME DISTRIBUTION

Stage 3 – Focus and alignment

Changes were made to achieve a right-size legal team focused on core legal requirements:


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  • Senior UK-based lawyers were moved to posts in Asia and the US. This put experienced lawyers closer to customers in BT’s growth markets rather than supporting from a UK headquarters. Significant consequential expense reduction took place;

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  • Common ways of working were adopted and a standardised deal manual was introduced. This meant that on-shore resources could be supplemented by short-term contractors and not law firm associates;

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  • Playbooks were developed for the LPO to standarise their approach to volume / low risk tasks;

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  • Investment in core legal services capability to address growth areas such as compliance, data protection and environment.

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As a result of these measures, the internal team was able to manage a broadly comparable workload with 40% less people than in October 2010.

Stage 4 – Results

Ongoing monitoring showed that the BT Legal team increased utilization of the LPO, allowing in-house resource to undertake higher value work, resulting in decreased use of external firms for overflow work. The table below shows how in-house work has changed by deal value (typically higher deal value equates to greater complexity).

Deal Type:<

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