Taking Managed Services to a New Level
When venerable IT companies Computer Sciences Corporation and Hewlett Packard Enterprise Services combined to form DXC Technology last year, the result was one of the world's leading independent IT services company, with annual revenues topping $25 billion. It also left General Counsel Bill Deckelman with an aggressive cost takeout target of 35 percent while supporting an evolving business in a fast-paced industry.
"Our expectation was that there would be synergies between our two legal departments, which we identified quickly," Deckelman says. "We looked at all the traditional things you do to save money, and it was clear that cost-cutting alone would not get us there. It was a significant dilemma. The only way to address it was to change the way we performed the legal work."
"We did not have the necessary elements in-house to do the work differently," he continues, "and we knew we couldn't let quality decline or have gaps in the support we offer to the business."
Deckelman partnered with UnitedLex CEO Dan Reed to create a new operating model for DXC's legal department -- a more modern and efficient model that Deckelman calls Legal 2.0. Planning began before the merger was finalized. UnitedLex reviewed every resource, process, and technology used by the legacy law departments to design the new enterprise legal services model. The result was a unique managed services solution that has UnitedLex providing legal support in more than 26 global jurisdictions. More than 150 DXC attorneys became UnitedLex employees, a move that allows DXC to save money while retaining institutional knowledge and a "One Department" mindset. Now, more than 250 UnitedLex senior attorneys, contract and commercial professionals, engineers, and subject matter experts support DXC globally in sales transactions (majority of team), legal operations, litigation, immigration, and other corporate legal activities. The five-year agreement is the largest managed legal services transaction ever.
A core component of this model's success is providing seamless legal services to the business client, regardless of whether the team member is from DXC or UnitedLex. To enable this, the legal department leadership team includes members from both organizations who discuss the strategy and operations of the team. Additionally, consistent training has been provided to all team members on topics ranging from positions on contract clauses to legal project management to litigation management. And, the leaderships team's management of the department has been enhanced by quantifiable metrics, reporting, and the use of service level agreements (SLAs) to measure success.
The model allows DXC to take advantage of UnitedLex's contract management platform, ContractRoom, which integrates with Salesforce and supports more than $26 billion worth of DXC contracts and provides automated end-to-end contract support. "UnitedLex makes incredible investments in technology, whereas corporate legal departments fight for investment but rarely get it," Deckelman says.
Naturally, change management around the transition was crucial. Deckelman worked early in the process to garner support from the CEO and the executive team. To help drive support for the project throughout the company, communication channels were opened with the business teams that rely daily on the legal team. For the members of the legal team who were being transferred, Deckelman emphasized that they were being offered a unique career trajectory with a company that both understands digital and has varied clients.
"What makes the initiative unique," says Reed, "is its comprehensive nature. I've been following the ACC Value Challenge for a long time. I am not aware of any law department solution of this scale and complexity."
UnitedLex began this engagement with DXC as consultants, partnering with McKinsey & Company. "We focused more on value capture as opposed to pure cost containment, meaning a focus on performance and risk management in addition to cost," Reed says. "UnitedLex was formed to combine consulting, technology, and resources to deliver a complete solution versus addressing a narrow transactional need."
Deckelman says that not only has the arrangement made the legal department's work much more structured and focused, but the UnitedLex "Fast Track" contracting solution has also given DXC a competitive advantage in wooing new customers. In a sales environment in which customers almost always issue RFPs, and there are usually at least four companies submitting, "winning is often about how quickly and fairly you can contract."
"Given where the IT industry is going, the practice of law will need to fundamentally change," says Deckelman. "DXC is in the business of outsourcing, and we now have experience as the client in that relationship. Fortunately, it has been a great year. People are ecstatic, we've gotten rave reviews, and our CEO has declared the transformation a success."