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Stemming from a companywide lean transformation transition that commenced in 2011, an opportunity surfaced for the MassMutual legal division to redefine its operations function with a keener focus on technology, administration, outside counsel management, budgeting, and forecasting. The team now comprises five members and is responsible for managing “the business side” of the law division.

Early on, the clearest opportunities were to bring more guardrails to the division. The team focused on improving the processes for onboarding, engaging and managing outside counsel. The deliberate choice not to pursue a convergence project was an effort to help attorneys keep the working relationships they valued most and to position the new legal operations team as a helpful partner in taking care of details around engagement letters and negotiation, says Christine Juhasz, Head of Legal Operations.

2019 Value Champion MassMutual Judges Quote

These steps paved the way for MassMutual’s Value Challenge award-winning initiative, in which the team worked with MassMutual’s data scientists to identify blocks of litigation appropriate for more sophisticated AFAs. Leveraging data analytics and Lean expertise, the team selected a national coordinating counsel for one of the company’s business line litigation business. The model, a hybrid AFA, combines a fixed fee with hourly components by activity, as well as a “safety valve,” a contractual clause that is used to calculate the difference between legal fees and fixed fees (if any), and how the net amount will be applied.

“We had done the data modeling and had a very good idea of what this work should cost to land on the most effective and efficient solution. The arrangement was designed to reduce our spend on a unit cost basis while increasing a selected law firm’s revenue at the same time, truly a win-win result,” Denno says.  

After analyzing historical legal spend, the legal operations team invited five firms to submit proposals; they would select a single firm for a three-year partnership. One of the RFP requirements was that bidding firms had to explain how they would use project management or lean techniques to manage the portfolio of work, as well as describe potential efficiencies and value-added services. “We were seeking a process improvement partnership, rather than just telling outside counsel they had to change things,” says Juhasz.

MassMutual found that partner in Drinker Biddle & Reath LLP, which serves as national counsel to several other life insurance companies. To kick off the initiative, counsel and client representatives spent a day creating a playbook that outlined the terms of the collaboration, including standard work, rules, responsibilities, expectations, and timelines. They set forth 10 parts to litigating the matters in a standard workflow that would save hours of work, improve communication, and enhance mutual understanding. Both sides feel that this upfront investment has paid off handsomely.

“To achieve efficiencies and consistency in representation, we needed to dedicate significant resources in the early months of the engagement. We are confident that this was a valuable investment of resources because MassMutual demonstrated a commitment to retain Drinker Biddle for a sustained period of time,” says Kate Villanueva, Partner at Drinker Biddle.  

MassMutual analyzed legal spend after six, nine, and 12 months. “We found that actual results aligned to the RFP assumptions,” says Denno. “As we worked through the process during year one, we identified other types of related work that Drinker Biddle can support.” Drinker Biddle tracks its efforts via shadow billing and shared the results with MassMutual. Those results netted a credit that will be applied to other related work. “That block of business has become fully supported by Drinker Biddle,” Denno says.  

The first year of the engagement brought a reduction in legal spend of more than 12 percent per matter. But the benefits were more than financial: Considerable time is saved by not having to issue engagement letters or onboard new firms. These process improvements and others have helped to decrease matter duration by over 40 percent.

Consistency in litigation and handling is another major benefit. “Collaborating with one firm allows us to better understand the other’s culture, communication style, challenges, and clients,” Denno says. “They understand our business, our philosophy, our matters, and our team.”  

Looking ahead, the efficiencies gained have positioned MassMutual to react favorably to a surge in litigation, if and when that should happen. The team expects to check and adjust the process while formally reviewing each matter to identify key learnings for continuous improvement. MassMutual is expanding this program, leveraging the knowledge and experience gained to improve how additional blocks of business are managed and litigated.
 

2019 Value Champion MassMutual

MassMutual and Drinker, Biddle & Reath LLP Team Photo. L to R: Eric Au (Drinker Biddle & Reath LLP), William Denno, Kady von Schoeler,  David Allen, Robin Fasoli, Mike Eng & Christine Juhaz (MassMutual)

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