Due to the growth in new stores, branded merchandise, and digital presence, related contract volume at 7-Eleven was growing exponentially. The legal department needed a lot more support very quickly and needed it to be scalable.
Drawing on their experience applying a value-based sourcing model to their real estate work, for which 7-Eleven was named a Value Champion in 2018 along with Seyfarth Shaw, they set about applying similar solutions for merchandising and digital/IT contracts. “We were looking for something loosely based on the real estate model, which allows us to manage significant volumes of work through outsourcing with appropriate levels of inside lawyer involvement,” says Deputy General Counsel Lillian Kirstein. For this portfolio, the company turned to Perkins Coie, also a previous Value Champion with Microsoft in 2014.
The West Coast firm has many high-tech clients and has invested in information technology and legal practice management capabilities. The latter is a key differentiator, says Partner Dean Harvey, who emphasizes that although technology is important, process is paramount.
“People think they’re going to buy an IT solution and it’s going to fix the problem. The reality is that if you want to drive efficiencies, you have to look at the process end-to-end in order to streamline it and reduce the amount of effort at each step,” he says. For 7-Eleven, areas identified for improvement included reducing time spent gathering information needed to open matters, locating matter-related documents, assessing the status of each matter, and quantifying key portfolio metrics.
By adapting and customizing third-party tools, the team at Perkins Coie built a matter intake and collaboration system that includes:
- Dynamic intake forms to gather information required to open matters
- automatic customized notifications, activating internal legal processes and assigning matters to the Perkins Coie legal team
- a shared electronic document repository, and
- matter and portfolio management tools that provide real-time data visualization, status tracking, and reporting that is customizable to individual users.
Request origination has now been shifted to the business, which typically has the information necessary to initiate matters directly with the Perkins Coie legal team. Involving the business client from the outset and ensuring that they had a voice in the project design were effective change management techniques, says Kristen Cook, Associate General Counsel.
The result is a more mature procurement model, says Harvey, replacing a process that previously relied heavily on email. Now, at least 84 percent of all new digital/IT and merchandising matters originate through the portal.
Perkins manages the portfolio on a fixed monthly fee. “We were trying to provide pricing certainty with high volume. We were going to take the risk for a defined scope of work, which freed us to drive efficiency. And the portal and the process improvement is what enabled us to provide that pricing certainty,” says Harvey.
As a result, 7-Eleven enjoys total budget predictability, even though volume is three times what had been forecast. But there are other benefits as well.
“The alternative fee arrangement gave Perkins flexibility in ways to staff the work,” says Cook. In addition to the traditional partner and associate roles, the firm also used of counsel resources. The project team was expanded to include nontraditional legal roles such as knowledge management professionals. Perkins Coie provides periodic training sessions to 7-Eleven staff on contract language, standards, and portal review.
Two people, a legal project manager and an on-site contract manager, were dedicated to the 7-Eleven work to ensure responsiveness, enhance communications, and foster collaboration. “The contract manager serves as a liaison between 7-Eleven and the Perkins Coie legal team. When questions arise, she can assist the business with navigating those, rather than relying solely on the in-house attorneys,” says Cook.
As a result of the project, 7-Eleven has reduced its per-matter legal costs by 18 percent for digital/IT contracts and 66 percent for merchandising contracts, year over year since 2018.
Thanks to the matter and portfolio management tools within the portal, weekly and quarterly reports provide insight through metrics, so the portal is continually enhanced based on feedback. “The tools enable data capture that reveals other efficiencies that can be realized,” says Harvey. “For example, we found a high abandonment rate on contracts being submitted for a certain type of matter. That visualization allowed us to see that we could put additional upfront controls in place to avoid the expense of sending contracts to outside counsel that were going to be abandoned.”
Most important to 7-Eleven’s legal team is that the data supports proactive, improvement-focused interaction with internal clients. “We can drive discussions with corporate leadership regarding increasing efficiencies and influencing change,” says Kirstein.