Pharma Company’s Law Dept. Metrics Help Contain Law Firm Spending

Article by Yin Wilczek, Bloomberg BNA; Video by RJ Jewell, Bloomberg BNA

AbbVie Inc.’s in-house legal department is using metrics to help it become faster and more efficient, an effort that is already paying off in the area of e-discovery, said Sam Ranganathan, the firm’s senior director of legal operations.

“E-discovery is an area where we identified a huge opportunity,” Ranganathan told Bloomberg BNA. E-discovery is the process of searching for and securing electronic data to use as evidence in litigation.

The legal department of AbbVie, a Chicago-based biopharmaceutical company, assembled the data on how much the company spent on e-discovery. After analyzing the metrics, it decided to bring the work in-house instead of having it performed outside the company. That move has generated significant cost savings for the company, Ranganathan said.

Ranganathan, who also is co-chair of the Association of Corporate Counsel’s Legal Operations section, spoke to Bloomberg BNA June 5 on the sidelines of the group’s Legal Operations Conference in Chicago.

Measuring Success

AbbVie and other companies are at various stages of building metrics, or sets of benchmarks, to track how well their in-house attorneys are performing. Some companies have been using the measurements for years.

“Established law departments have figured out why metrics are important,” Ranganathan said. The performance benchmarks can be used to establish accountability, provide facts to justify what in-house attorneys do and how well they do it, and make their work more transparent to the company, he said.

For companies that are just starting to build a metrics program, Ranganathan suggested five areas to track with respect to outside-counsel spending:

  •  what is budgeted and what is actually spent,
  •  internal versus external spending,
  •  spending on each practice area,
  •  spending on each law firm, and
  •  how the spending changes over time.

These metrics can help in-house departments determine whether their spending is in line with expectations, Ranganathan said. Companies can build a strong metrics program “using these five basic tools.”

To contact the reporter on this story: Yin Wilczek in Washington at ywilczek@bna.com

To contact the editor responsible for this story: Susan Jenkins at sjenkins@bna.com

Which law firms does AbbVie use for their litigation? Check out AbbVie’s Litigation Analytics profile on Bloomberg Law. 

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