By Michele Gorman

Law360 (November 10, 2020, 4:16 PM EST) -- It will be crucial for legal departments to strengthen relationships with law firms, experiment with alternative fee arrangements, and tap into both existing and new technologies as the pandemic continues into 2021, two in-house lawyers said Tuesday.

As corporate teams start to wrap up the year and think about 2021, panelists Jenita Gillespie, director of legal operations at Bon Secours Mercy Health, and Kiran Mallavarapu, executive vice president and senior manager of legal strategic services at Liberty Mutual Insurance, shared best practices on reducing costs and working efficiently during the pandemic.

One common theme throughout the session — which was part of the virtual Corporate Legal Operations Consortium Global Institute — was the importance of communication in strengthening relationships with outside counsel. Gillespie shared how Bon Secours Mercy Health previously requested that its law firms designate a relationship attorney to work on matters directly with her — a system that has been successful during the pandemic, she said.

The strong relationships between Gillespie's team and the firms helped make changes in response to the pandemic go smoothly, she said.

Like many companies, the health care organization had to enact cost-cutting measures this year to help shoulder the economic downturn of the pandemic, including a percentage of rate cuts across the board. The plan includes a prompt pay discount that gives the company a certain percentage if the in-house team receives, reviews, approves and pays invoices within 10 days, Gillespie said.

"At first, some law firms [were] thinking, This is a huge cut. I said, 'Well, no. We only get that if we pay your bills within 10 days,'" she said during the videoconference. "That also put a burden on my in-house attorneys that you need to make sure you are reviewing and approving these invoices in an expeditious manner."

Gillespie said the team also put into place a rate freeze until 2022. Out of about 40 outside counsel shops, Gillespie said she received pushback from only four firms, an outcome that she said shows the strength of her team's relationship with the firms and a mutual understanding of each other's businesses.

"Most of the firms that we have, they know our business, they know our industry, they know what's needed, they understand how COVID impacted us," she said. "They were more than willing to make these concessions for us, and they understood that we had to make some of the same concessions in-house."

While Gillespie went to outside counsel with the concessions, other in-house teams might take the approach of asking certain firms to come to the table with what they can do to improve costs, said Kris Satkunas, who moderated the panel.

"I want to make that point that no matter how you approach it, there are stylistic differences, but that communication has to happen," said Satkunas, director of strategic consulting with LexisNexis CounselLink. "It's in the relationship as part of what fosters that."

Gillespie encouraged communicating with relationship partners on the phone rather than over email.

"An email can come across any type of way, and then the information can be misconstrued," she said. "I'm always that person [to say], 'Let's pick up the phone, let's talk this out.'"

These strategies could help in-house teams, as a recent report from BTI Consulting Group showed that corporate clients overall plan to increase outside counsel spending in 2021 by more than 5%.

Mallavarapu also spoke about the importance of picking up the phone to initiate a conversation and speaking directly with firms. For his team, this year resulted in some outside counsel willingly moving forward with flat fees and other alternative fee arrangements.

The panelists also discussed the significance of continuing to embrace technology, following a year that brought disruptive changes to the legal industry.

Looking ahead to 2021, Mallavarapu said he wants more in-house and outside counsel to use existing technology such as Microsoft Teams and Skype.

"We already have the technology, but people should be using it, whether it be a knowledge management system [or] a matter management system," he said.

Another area he hopes to focus on next year is adopting new tools and automating certain pieces of documents, such as nondisclosure agreements.

"I don't think any attorney went through three years of law school to keep looking at the same NDA over and over, so how can we automate those pieces?" Mallavarapu said.

--Additional reporting by Emma Cueto. Editing by Alanna Weissman.

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