When Kim Rucker arrived as general counsel for Tesoro Corp. in early 2015, the legal department was organized like a law firm with legal specialties, such as human resources; labor and employment; corporate governance, securities and finance; and real estate and marketing. She wanted to transform the legal organization into a unified team. She wanted to run the organization like a business, not a cost center; treat every corporate dollar as its own; and demonstrate value as a strategic business partner.
When San Antonio-based Tesoro Corp. became Andeavor, the company restructured its legal department, creating “centers of excellence,” including a new legal operations group, resulting in a 28% reduction in legal spending.
"The new structure was designed to operate the legal team like a business by increasing accountability, effectively managing legal function spend, improving processes, team building, training and development of personnel, tracking [key performance indicators] and benchmarking against other legal functions—all to drive significant value add and trusted advisorship in the support of the strategic direction of the company," Rucker said.
For outside counsel, Andeavor partnered with Counsel Management Group (CMG) to launch and implement a request for proposal (RFP) process. More than 70 law firms submitted proposals. CMG provided data analytics to help measure law firm value based on responsiveness, rates, discounts, complimentary service offerings such as trainings and briefings, and more. By structuring the analysis this way, the team was able to see beyond the hourly rate and identify those firms that could complete the work at an effective cost.
"We learned that efficiency is just as important as price and started to see that there were multiple ways to slice the apple," Associate General Counsel Cliff Barr, head of the new legal operations group, said. "We were amazed at the efficiency and savings that could be realized."
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