An industry-leading company with dozens of facilities around the U.S. needed to review 17,000 contracts on a compressed timeline and limited budget as part of an acquisition of a peer corporation in a tightly regulated industry. Important metrics to be tracked for each contract were length and value of contracts; in addition, 30 other data points per contract needed to be tracked and flagged, including specific regulatory issues. Approximately half of these contracts required high-level understanding of the industry and the types of legal issues that could be prevalent. The deal hinged upon the review and diligence conducted. The client already utilized a contract management platform, but there was no consistency regarding how documents were summarized and the review was expected to take considerable time.
Legility’s project manager designed a process that utilized Legility attorneys (including those with industry-specific regulatory experience), used industry leading technology, applied a tailored quality control (QC) process, and real-time standardized reporting of metrics that helped the client meet quality, time and budgetary demands. Process successes, including many cost-savings, included:
- Review Technology
Applying industry leading database technology (instead of a traditional spreadsheet) during the review process, Legility standardized the review language in the document summary section and avoided inconsistent notes by multiple users. Legility also created drop-down options, which meant no typing by reviewers. The traditional summary method would have required an individual to read/scan the spreadsheet’s “comments” section in order to review and identify issues.
- Designed Process Efficiencies
The client tracked complex contracts on a separate spreadsheet outside of its contracts management system. Legility tailored its process to work within the existing contracts management system so the client did not need two systems for tracking complex contracts.
- Quality Control Process
There was a clear need to simplify the existing software interfaces, not only for the attorneys to review the documents more efficiently and with better results, but for the clients’ employees to input data post-acquisition. Utilizing technical expertise to build these features, as well as experienced attorneys who understood the legal issues, the Legility team designed data fields and managed the review and escalation process as follows:
Certain fields (review data) were handled entirely by industry-specific regulatory attorneys – narrowly and efficiently flagging contracts for further review and escalating them to outside counsel to assess potential issues.
Legility utilized various quality control methods including “Export QC” in which certain fields from the database were exported and the data was sorted and double-checked for inconsistencies.
Just these two steps made a significant difference in the quality of the work product, the efficiency with which documents were QC’d and ultimately the volume of documents that had to be re-reviewed (10% more efficient).
The Legility Team
Legility’s team of 58 review attorneys averaged 12 years of related experience, including:
Legility’s team leadership for this project included a project manager, a technical project manager, a team leader, and two assistant team leaders. The blended rate for entire team (including consulting, project management, workflow development and quality control, in addition to the actual review of the contracts) was significantly lower than the cost of the company’s traditional diligence/attorney rates;
The client’s General Counsel and Assistant General Counsel (AGC) were heavily involved in the planning stages working with the project manager to define success and communicating their needs and involved the IT department early in the process;
There was no outside counsel for the project and the AGC functioned as the day-to-day contact for the Legility team lead, who was formerly in-house counsel for a major company within the industry.
In total, Legility’s managed services model saved the client more than $2.4 million in approximately eight weeks.
In addition to the hourly rate savings compared to previously utilized traditional review and diligence methods, the Legility team improved efficiency within the client’s existing contracts system by 25%.
Additionally, from the beginning of the project to the end, our attorney team increased its own review efficiency by 37% by improved technology deployment and use, following best practices set in the review protocol, and real-time quality control.
Database and standardization of language saved at least 5% of review time = $267,000 in savings.
Designed process efficiencies saved no less than 10 minutes per contract (5%) by not having to navigate multiple systems = 8,000 complex contracts = $126,000 in savings.