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.
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:
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.
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:
A detailed time-motion study was undertaken to understand in detail:
Next, the following measures were put in place for 2012:
Changes were made to achieve a right-size legal team focused on core legal requirements:
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.
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).
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