Walmart’s Alan Bryan, recipient of the ACC Legal Ops Professional of the Year Award, discusses the evolution of his company’s legal operations and procurement functions.
CCBJ: How has your role at Walmart evolved, and how did you get into legal operations and managing outside counsel?
Alan Bryan: When I started with the company, I managed litigation for a number of Walmart stores and Sam’s Clubs across the country. After about 18 months, I moved into a job managing the company’s relationships with all of its outside law firms.
Over time, that position evolved to focus on legal operations. In 2015, we set up a formal legal operations section of the legal department. At that point, the oversight and management duties remained part of my job, but I also started looking at internal processes and how we handle our relationships with outside firms. So the evolution of the role involved becoming more operational in both duties and tone.
The procurement aspect of the role remained throughout, but we are not a pure procurement function. There are not many opportunities to add more outside firms to the panel. It’s more of a matter-by-matter procurement approach, and we do that in partnership with our practice areas that are seeking the outside support.
How is the Walmart legal department organized, and how does the legal operations function fit into that organization?
Karen Roberts is general counsel for Walmart Inc. The legal department is responsible for handling all legal matters affecting the company in its domestic and international markets. The department structure, which aligns with business units, supports Walmart US, Sam’s, International, Litigation and E-Commerce. Our Legal Operations group really fits in the middle of all this, because we support all those areas.
In your outside counsel management role, how are you helping the legal department track how outside counsel is doing?
We measure outside counsel on many measures, but primarily on three big factors: cost, diversity and performance. With cost and diversity, much of the information comes out of our matter-management system, so we’re looking at the cost going in and how it’s attached to each firm. We’re measuring matter against matter and firm against firm.
We’ve created dashboards that translate those three factors and more into the KPIs that our general counsel and deputy general counsel care most about. What are the top matters? How does spend compare this year over last? Who are our top firms? How do they compare in spend this year over last? How is spend distributed among case managers? Do we have any outliers that are going to be problematic for our budgets? Those are just a few examples.
We aim to use cost, diversity and performance data to give feedback to firms about improvements that we’d like to see. We’re also working on the development of a more formal evaluation process for some of our strategic partner firms, which will improve our ability to give them feedback. Hopefully, firms will take that feedback and adjust where necessary, but the goal is to have a conversation with the firms to help them perform more optimally and better partner with us.
Can you talk about Walmart’s approach to setting guidelines for outside counsel?
Our outside counsel guidelines are incorporated into our engagement letter and performance expectations. We’ve basically established two different sets of guidelines. One set contains the principles by which we do business and how we expect our law firms to do business. That includes our expectations on diversity, on conflicts, and our global ethics policy, among others. Second, we have our outside counsel billing guidelines. We will negotiate some of those guidelines at the outset of an engagement, but we try to apply those guidelines uniformly across the board, just as we do the principles for doing business.
Related to invoicing, we’ve recently stepped up the use of RFPs on a matter-by-matter basis. We hope to incorporate alternative fee arrangements, including a creative auction bidding process, as we go forward. We hope stage or project-based billing can replace the need for certain guidelines tied to the billable hour. Of course, getting away from the billable hour is something the industry has been striving to do for some time. Personally speaking, I am among those who think ending the billable hour in favor of finding and instituting value-based cost structures will be better for the purchasers and providers of legal services and, importantly, for the attorneys who bill by the hour now.
You recently announced that Walmart is partnering with LegalMation to use artificial intelligence to handle responses to lawsuits. What does that entail?
LegalMation came to us with the proposition that its proprietary use of IBM’s Watson AI technology could create high-quality drafts of pleadings and initial discovery requests just by uploading a PDF copy of a complaint. That was intriguing enough to me to continue the conversation, and ultimately we decided to try out a pilot to run the LegalMation software with a few law firms.
After some tweaking, which was really just making stylistic and jurisdictional changes to the documents that were created, we were able to find some success. We determined that the use of LegalMation could reduce the time needed to create those initial documents by 60 percent to 80 percent, depending on the matter in question. Based on that success, we decided to create a partnership with LegalMation. We are now in the early stages of rolling that out more broadly.
Many legal departments don’t have a formal legal operations group. Based on your experience, what advice would you offer to a law department that was looking to create such a function?
First, look strategically at where you want to be in three to five years. Do a great deal of self-reflection and look at your spend, your outside firms, your internal processes and your personnel. From there, make a determination of where you see the fastest and easiest opportunities.
As a starting point, you would want to ask, “Are our relationships with our outside firms all uniform, and are we leveraging all that we can with them in an appropriate manner?” And then ask, “Are we collecting data in such a way that we can utilize it?”
Those were two of the first things we did. We made sure that all our law firms were on an equal footing, creating a uniform engagement letter and rate process.
At the same time, we took a look at all of the data we had collected over several years of functioning as a corporate legal department – some of which we had utilized, some of which we had not. We went about ensuring that our data was new and relevant and that it would remain so by really putting a tight wrapper around our matter-management system.
The reason to do those things early on is to set the stage for the different initiatives that you’ll roll out later. You want to have clean and usable data so that you can measure results to make sure that your operations function is performing the way it should – and that it is performing better than the approach you had before in terms of things like cost savings, your panel of outside counsel and your internal talent.
It sounds like these kinds of efforts can bring real value to a legal department.
Yes. It’s important to understand that a legal operations function can open up a new way of purchasing and even delivering legal services that has not been available to the profession until recently. That, coupled with the need for legal departments to become true business units of the company and not just “law firms attached to companies,” will drive more change in the future. The operations function can help change the way the legal profession operates in a very good way, which will not only save money, but also change the way law is practiced – all of which will be for the better.
Also, it’s important to understand that you don’t necessarily have to have excessive legal spend or hundreds of outside law firms in order to create value. There are many things that a legal operations function can do to better a legal department, and it can increase your efficiency and the cost
savings that you’re giving back to the company.