Chris Fowler, General Counsel UK Commercial of BT Legal, speaks about transforming BT Legal’s approach to delivering legal services.
At BT our business has had to address the same challenges and exploit the opportunities that the legal industry as a whole is grappling with today, such as:
- The commoditisation of traditional revenue streams.
- The movement away from variable usage-based pricing to fixed output-based pricing.
- New technology and the ability to exploit data.
- Lower barriers to entry, leading to new entrants that don’t have the cost base of established providers.
BT business has had to take a fundamental look at itself and challenge established norms. In the same way, BT Legal has also had to do likewise.
The transformation journey
In undergoing this transformation process, we had to be clear about our purpose from the very beginning, which is “to enable and protect value for BT”. To achieve this, we needed to give ourselves space to design some core principles to help us stay on the right path. We took a good look at our core and non-core competencies, skills, priorities, career development opportunities, use of third parties and technology utilisation, and made some interesting discoveries.
As BT’s broader business was downsizing, we realised that our team was, in many instances, doing tasks that had previously been done by others in the BT business, executing lower level repeatable tasks or were spending a disproportionate time on drafting bespoke documents and were paying external advisers on a traditional hourly basis to manage overflows.
What did we do differently?
When presented with these facts, we addressed the need for a transformation through structural change; our approach to external resources; and management of change.
With the support and agreement of our internal clients, we prioritised customer-facing activities at the expense of high-volume document churn. We adopted a shared services model in many of our core delivery functions and encouraged our lawyers to think more about “what” they did as opposed to “who” they did it for.
We brought our transactional lawyers together under central management and created playbooks to drive a consistent way of working, and facilitated greater collaboration and knowledge sharing.
We established a front-door system to ensure that all requests from the BT business for legal support could be independently triaged so that we could prioritise complex work and route this to BT Legal and route low complexity/high volume drafting tasks to our LPOs (legal process outsourcers) to manage. We also moved some of the resource from our headquarters in London and located key individuals in high growth markets, such as the US and Asia, to be closer to BT’s customers.
We also triaged the work we sent out to our external advisors, expanding the range of service providers we used, from LPOs, to new providers (such as Axiom, Halebury, Obelisk and NewGalexy), in addition to traditional law firms. I wouldn’t underestimate the time and mind-set shift required to implement this approach. We have had to invest significant time in playbooks, audit processes, complexity definitions and service levels that we could never have anticipated at the outset. But this investment pays back in the end as service providers are then able to be more productive; they spend less time referring matters back to BT Legal for guidance and BT Legal isn’t bogged down with repeat queries.
From an operational perspective, technology has been key to the successful implementation of these initiatives. For example, we are currently using our sharepoint technology to automate governance approvals on transactions (through pre-defined workflows) whereas previously it was done through exchange of emails and manual production of word templates.
This now enables us to obtain approvals within minutes instead of days, and makes us more agile to do business with. This has only been possible because we invested time in collecting transaction data which ensured that governance was only introduced into the system where it added value. We did this by analysing the historical data on previous approvals, rather than taking a subjective approach based on assumptions.
Another key factor is reporting. We have had to move away from narrative based reports to KPIs (key performance indicators), such as the percentage of work requests being taken out by the front-door, the hours our internal team is recording on those things that matter to us (spending time on customer activities) and the number and complexity of matters they are working on.
We have had to become leaner with a sharper operational focus; moving away from a hero culture to building a sustainable business. We focussed on making sure that we can quickly identify and resource those areas that are running hot.
We are spending more time on performance management to ensure that BT Legal has the necessary skills to successfully deal with and influence external parties. As management structures become flatter, we look for ways to retain and grow key staff by introducing a culture of continuous improvement, and giving our people meaningful jobs with a degree of autonomy.
And the journey continues…
In a world where the telecoms industry is undergoing constant change, cost transformation remains a key priority. These changes have enabled BT Legal to deliver more with fewer people; and the legal team is staffed with people who are more highly skilled and tightly focused on the top priorities for BT.
If we hadn’t transformed ourselves, it is likely that change could have been imposed on us, so we have managed to control our own destiny and make a virtue out of a necessity. Our annual commercial spend in the UK is 75% lower than it was in 2010 because we no longer use traditional law firms for overflow work. The front-door approach, which we use to manage demand, has become more automated and now refers 68% of all work requests (as opposed to 30% at launch) to our third party suppliers, allowing us to focus BT Legal on matters that are really important to BT and its customers.
The savings we have made on the commercial side have enabled us to invest in growth areas such as data protection, Asia, compliance, anti-corruption and bribery, and human rights, all of which are higher on the risk landscape than previously.
The transformation process is a continuous improvement journey; we are still actively looking at the data we are collecting to identify the bottlenecks in our business and cycle times, and are proactively suggesting improvements to drive business benefit, such as tackling our customer terms’ negotiating process. But that’s another story.
The full version of this article will be published on practicallaw.com in November 2015 as part of The Inside View series.