The Little Legal Department that could
When you start a new in-house legal department, you can construct it the way you want, taking advantage of best practices and current thinking, informed by history and data. That's the approach James Gilmartin took when he became General Counsel and the first member of the in-house legal department at Bankrate in 2012. Founded in 1976, the company had passed through several phases of public and private ownership, but had always relied on external legal resources.
When Gilmartin came on board, he collected data on what was being spent on those resources, and discovered that commercial contracting was the largest area. "I lacked the time to focus on efficiencies, but thought that we could bring some or all of that work in-house with a marginal increase in headcount," he says. "As a cost center, we wanted to try to save some money."
Aided by Vice President and Senior Counsel Jessica Rivera, who joined the company in 2014 from one of Bankrate's panel firms, Gilmartin analyzed agreements with outside counsel. Rivera studied the ACC Value Challenge website carefully, gaining inspiration and identifying models of success. "In commercial contracting, we were in survival mode due to the volume, and it became clear that it didn't make sense for Bankrate to be charged hourly," Rivera says.
They shifted their hourly fee arrangement with their primary law firm to a flat-fee arrangement, meeting quarterly to adjust it based on volume. They implemented outside counsel billing guidelines to curb the pass-through of firm overhead charges; and worked with a third-party legal fee advisor to refine those guidelines and to further negotiate fees down. New technology, including a matter management system, helped to ensure consistency, useful reporting, and budget predictability: In 2015 and 2016, actual invoices were within 93 percent of estimated fees.
There was an opportunity to bring compliance matters in-house as well. Joined by Senior Counsel for Compliance, Privacy and Litigation Dean Rodrigues in 2015, the team sought value by making their outside counsel compliance firms fight for their business. The addition of a legal operations coordinator in 2016 freed up the three attorneys to take on more substantive legal work.
The effects of this growth in-house weren't felt only by outside counsel. In serving Bankrate's internal and external commercial contracting customers, the legal department team leveraged a full complement of new tools and techniques, designed to reduce conflicts before they happen. Some of the key deliverables included:
- Key agreements, reworked into a standard form, which reduced friction in negotiation
- Non-disclosure agreement playbooks and master contract playbooks that empowered business teams to negotiate certain contract terms with pre-approved legal language
- A new policy that standardized the contracting, approval and signatory processes across all business units
- A legal intake form that eliminated follow-up questions on a contract's business terms
- Pipeline reports that tracked key metrics on number of matters and spend by business unit and in-house vs. outside counsel managed.
The department's change management skills were on full display as they illustrated the new commercial contracting process as a playbook, using football metaphors and analogies throughout. The team took it on the road to meet customers where they are, training sales teams and senior management on the changes.
"We empowered the business teams by teaching them how to understand the contracting that supports the product they are selling," says Rivera. "We touted the value proposition that leveraging these new processes will make their lives easier."
The results garnered by "The Little Legal Department that Could," as they call themselves, have been impressive. Since the initiation of the project—and even excluding the savings achieved by the sale of one of its business segments in 2015—Bankrate has enjoyed a reduction of 37 percent in outside legal fees for commercial contracting, and of 30 percent in outside legal fees for compliance-related legal matters.