Turning Outside Counsel Guidelines into a Data Analytics, Diversity & AI-Enabled Cost Savings Platform

Originally shared on digitorylegal.com. Digitory Legal is now BigHand Impact Analytics. Learn more here.

As COVID-19 took hold of the healthcare industry in the past few years, health plans faced multiple challenges that went well beyond caring for patients. One of these was how to manage major and unforeseen downward pressures on budgets. Mark Zemelman, general counsel of Kaiser Foundation Health Plan (KFHP), and Greg Kaple, senior director of KFHP Legal Business Services, seized the opportunity to find efficiencies by building on their past efforts to promote affordability, diversity, and quality of legal services through a data-focused approach to updating outside counsel guidelines.

The KFHP Legal Business Services team had asked industry experts to evaluate their current guidelines and operational performance using a standard data set of matters, invoices, and timekeeper information. The results showed opportunities to generate additional savings by utilizing focused project management and analytics of legal matters.

KFHP Legal selected Digitory Legal to help them upgrade their Outside Counsel Engagement Guidelines to Version 3.0, taking them from operational to analytical. "The experts at Digitory Legal were advanced in their insights into our guidelines and data," Kaple said. "They quickly showed how using clean time-entry data leads to more than just adjustment savings. It becomes a foundation for managing all aspects of a case: cost, quality, and diversity."

KFHP legal has seen immediate savings of 10% and has positioned itself to leverage data for greater spend reductions in 2021 and beyond. Most importantly, the KFHP team uses its data to move the needle on diversity and inclusion by examining outside counsel's allocation of career-advancing work.

Generating Insights & Facilitating Adoption

“To achieve the desired results in the next update, KFHP Legal's team needed to simplify adoption and enforcement, align the guidelines with proven practices for cost management, and focus on collecting high-quality billing data to provide actionable insight to KFHP's Legal Department," explained Catherine Krow, founder and CEO of Digitory Legal.

KFHP Legal cut the previously encyclopedic, 70-page guidelines into a crisp,16-page document with digestible sections targeted to specific audiences and a "What's New" summary of changes. This made Guidelines 3.0 easier for everyone to learn and adopt.

The KFHP team also released a modern online portal through which outside counsel could find Guidelines 3.0 sections, view training videos, access FAQs, and open tickets to request help. "Making the guidelines easier to adopt and enforce is a key strategy for reducing internal and external administrative workload," Kaple explained.

Improving the quality of data was another key focus of the guidelines update.

"Our team collaborated with Kaiser to clearly explain the data-quality expectations within the new guidelines, including very precise 'Do's and Don'ts' for timekeeper narratives, block billing, and coding," said Krow. "By improving overall data hygiene, both Kaiser and its outside counsel will be in a far better position to leverage data for business decisions and diversity initiatives in the future."

Laying the Groundwork

The Zemelman-Kaple duo was well-positioned for this latest innovation after having centralized the legal fees budget for all KFHP regions and operations in 2017 and releasing the second version of their Billing and Staffing Guidelines for outside counsel. In doing so, they successfully held fees flat while maintaining the highest standards of excellence. They then rolled out a new e-billing system in 2019, positioning the legal department to support the enterprise in 2020 by releasing Guidelines version 3.0.

Making Guidelines 3.0 work meant engaging internal stakeholders—leadership, attorneys, and assistants—in a process that included education, input, and adoption. The Legal Business Services team and Digitory Legal successfully used a visual infographics communication strategy to engage each audience.

The team then delivered a rollout with engaging, game-themed training sessions tailored for its in-house and outside counsel with subject-specific video vignettes and a feedback period before strict enforcement began in October.

Rollout and Results

The legal department has recognized immediate savings from enforcement of the new guidelines and is seeing new value by leveraging data to track task/activity-level costs, such as summary judgment motions and individual depositions.

"These guidelines reflect the importance of data for legal project management," Kaple said. "Accurate, timely, and detailed data allows us to direct our firms to align the right talent with the task for the optimal quality, cost, and diversity."

KFPH legal has had a long-term commitment to assigning matters to minority and women-owned firms. Guidelines 3.0 advances this commitment to diversity and inclusion by supporting diversity at the timekeeper and assignment level of work.

"With high-quality data, we can take action to fix implicit bias at the source, which is at the firm staffing and work allocation level," Kaple said.

The KFHP guidelines initiative has transformed a cumbersome rulebook into actionable data analytics to drive budgetary efficiencies and social change – positioning KFHP as an industry leader long into the future.

About BigHand Impact Analytics

BigHand Impact Analytics combines strategic advice and change management expertise with AI-enabled data analytics to transform legal billing data into DEI success. The solution allows firms to identify opportunities for career advancing work, supports DEI initiatives, and focuses on areas where time recording needs to be improved - ultimately creating a smoother billing and collection process, with better data insights. 

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