In Canadian Lawyer magazine’s fifth annual Innovatio Awards, the general counsel and the legal departments for Canadian companies Toronto-Dominion Bank and Points International Ltd. were recognized for revamping the way they work with outside counsel.
TD Bank: Contract Management Solutions Frees Lawyer Time
It’s a common challenge in-house lawyers find themselves in these days – too much work to do but a desire to do things differently instead of just sending more work out or hiring additional head count.
However, Charles McCarragher, vice president, Legal, and his team in global contracts at TD Bank decided before making a change in process to take a hard look at what the team was doing and how it could be done more strategically to better serve the internal client and at lower cost.
At the same time, McCarragher wanted to keep a sharp focus on risk management and make sure the lawyers working inside TD had the most interesting work to do. The TD global contracts legal department he oversees manages more than 1,000 medium-risk-rated contracts in the area of procurement annually. TD contract managers are negotiators who are not members of the TD legal department but are primarily accountable for the negotiation and drafting of medium-rated contracts and for working with TD internal stakeholders and external suppliers. TD lawyers support those contract managers as legal subject matter experts and serve as escalation points.
McCarragher found that about 75% of a lawyer’s time was spent on the highest-risk strategic matters. This category of work represented approximately 20% of the total workload, therefore creating a situation where a lawyer had only 25% of their time to manage approximately 80% of their workload. “Resource constraints negatively impacted quality of review, timeliness of support by lawyers [and] time to completion and the result was decreased servicing of high-risk work and a stressful work environment for lawyers,” TD stated in its Innovatio nomination.
“The easiest way to describe it is too much work, not enough time,” says McCarragher. “We wanted to prioritize our lawyers’ time on work that was highest priority relative to the bank but was also the most rewarding and fulfilling for the lawyers to perform.”
The challenge was to find a way to provide a “release valve” for the internal lawyers but at the same time make sure a certain quality and standard was met according to TD’s risk appetite.
McCarragher and his team worked on an alternate resourcing model to take a certain type of work and outsource it to their external firm, McCarthy Tétrault LLP, but put measures in place to ensure the work was done in a consistent way and ensure a clean integration with other stakeholders in the contracting process at the bank.
The contract management solution combines service delivery by TD contract management and legal resources and resources from McCarthy Tétrault and Exigent Group Ltd. Together, McCarthy’s national innovation leader Matt Peters and Rico Burnett, global head of Legal Services & Solutions with Exigent, lead a team that supports the TD content management system (CMS).
McCarragher admits the department had “relatively ambitious targets” but they have seen benefits across a number of areas. “We’re looking at roughly a 30% cost savings relative to what it would otherwise cost to retain this work in-house on a volume basis [for a full-time equivalent position]. Our own service delivery time has also improved. So where in the past we would have had on average a four- to 10-day turnaround time, that has been reduced to a one- to two-day turnaround time,” he says.
Points International Ltd: Identifying a Need for Flex Service When Business Is in Growth Mode
When you’re new to a position as the only legal officer in a company that is a high-growth organization, trying to find the best way forward in managing the work can be an overwhelming and distracting challenge from the day-to-day demands of providing sound legal advice to a company in a competitive space.
Points International Ltd., based in Toronto, provides loyalty e-commerce solutions to the loyalty industry. The company is growing in size and scale — about 20% a year — as well as increasing its product suite.
Points operates out of offices in Toronto, San Francisco and London. It operates three business segments: Loyalty Currency Retailing, Platform Partners and Points Travel.
The in-house legal department consists of Charles Whitburn, vice president, general counsel and corporate secretary, who arrived at the company at the end of 2015 right at the time when Points was ramping up two new business segments.
Points’ e-commerce solutions are directly integrated into approximately 60 of the world’s largest loyalty brands — from frequent flyer miles and hotel points to retailer and credit card rewards, with access to nearly 1 billion loyalty program members.
“Points was at an interesting inflection point where we still needed a fairly high degree of personal touch and subtle legal nuance in our outbound commercial contracts with our customers,” he says. “Right away I knew we were going to have a tripling of our legal department output just based on business segment changes alone, and I knew that we needed to gain some elastic scale, so we looked at some different solutions.”
About six months after Whitburn landed at Points, it quickly became clear to him that he was going to need more help. He looked at both traditional law firm providers and more technology-enabled platforms.
For legal support, Whitburn required counsel with experience in multiple practice areas — not just general commercial and technology law experience but substantive experience with complex cross-jurisdictional issues, in light of the firm’s international corporate partners, suppliers and customers.
“Ultimately, where we landed was working with a flex law firm on a burstable basis as opposed to hiring in-house or expanding the legal department through our traditional legal services providers,” says Whitburn. “It gave us a cost-effective solution and, most importantly, the subject matter expertise that was stronger for the type of work we needed help with.”
Whitburn retained Conduit Law in September 2016. Working with Conduit Law’s president, Peter Carayiannis, and senior counsel, Rajiv Arya, they found a path that worked for the demands of Points’ business.
Then Whitburn set out to reimagine the legal department by implementing a “distributed” approach, relying on in-house resources for core operational matters, traditional law firms for expertise on discrete projects and using alternative law firms, such as Conduit Law, for the firm’s high-value, and large-volume, commercial legal work that requires experienced senior counsel able to work at a high volume on an on-demand basis.
Work done with Points and Conduit Law has allowed Points to more than double the throughput capacity of the legal function.
“The nice thing about it and interesting thing about the great value of working with Peter and Rajiv is we managed to do this mostly through a repositioning of budget, so I didn’t have to do a ton of new spend,” says Whitburn.