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Turning Law Firms Into Managed Service Providers at Microsoft


ucy Bassli isn't an ops executive. In fact, she's just a "regular lawyer," she says of her position as Assistant General Counsel at Microsoft Corporation, where she oversees all inbound procurement contracting. In short, she leads a team that doles out advice to the company's procurement team, sourcing professionals, and other procurement lawyers.

However, a quick survey of the way Bassli executes her practice and runs her legal team — which includes contract operations for the company's law department and beyond — and it's easy to spot her legal operations hat.

"Microsoft empowers its employees to do their best; and that is what I am trying to do," Bassli says of her 11-year tenure at Microsoft, which she joined in 2004 after two years in Big Law. She's spent the past ten years devoted to operationalizing procurement contracting — once known as "death by legal" by the internal procurement clients with more than 30 legal professionals each doing their own work without standard templates, timelines, predictability or acceptable risk," Bassli says. This often resulted in unpredictable delivery or delays of contracts, regardless of their complexity and length, she adds.

To begin, Bassli revised the internal processes for legal review of such contracts, standardizing the approach and developing smart risk tolerance for procurement contracts across the legal department. This included building new tools for her team using internal resources and creating new partnerships with outside legal service providers.

"Now, we have more than 20,000 contracts that get legal review through our system, a combination of automation and outsourced legal processes" she says.

From overseeing the life of the contract, to escalating negotiations, obtaining electronic signatures and storing in a global repository — they're all managed by Bassli's team and Integreon Managed Solutions, Microsoft's outside partner of six years. In addition to the 20,000 contracts, which require substantive legal work, Integreon processes more than 100,000 contracts for signature and storage only, Bassli adds.

"Our company expects everyone to self-serve procurement contract preparation and this approach wasn't working," Bassli explains. "By centralizing and outsourcing the process, any Microsoft employee who needs a document signed and stored can submit a request to Integreon and get the help they need."

The process took years to centralize and then outsource, but the effort has proven fruitful, Bassli says. "We've now added upper-level work to the process by stratifying our legal services with self-help at the very bottom, to advanced work by our law firms and finally our in-house attorneys, paralegals and contract specialists at the top."

One recently implemented law firm program now sees Bassli's team using outside counsel for higher level contracts such as master service agreements.

"Our lawyers were doing the same type of contracts over and over," Bassli says. "Initially, to keep my team happy and engaged, we thought to push the work to our law firms so that my team could focus on the more critical and challenging work — the good stuff. But, then our law firms would be doing the same things over and over, and we wouldn't get more value by simply handing over more work."

“We've now added upper-level work to the process by stratifying our legal services with self-help at the very bottom, to advanced work by our law firms and finally our in-house attorneys, paralegals and contract specialists at the top.”

So Bassli created a managed service operation with two trusted outside firms. "We learned about the benefits of outsourcing from our engagement with Integreon, and we wanted that from our law firms, too, i.e. metrics, business intelligence, process analysis and length of negotiations. In short, I wanted the high-level legal skills of a law firm, and the metrics and operational efficiencies of an LPO," Bassli says.

Although the program includes a flat-fee for work, this isn't about having an alternative fee arrangement (which Bassli calls "so obvious"). It's a complete managed service model that provides a holistic approach of Microsoft's procurement contracting process — and eliminates the tired scenario of four to five law firms doing the same type of deal over and over, with the in-house lawyers still in the middle of the engagement between the business owner and the outside firm.

Law firms David Wright Tremaine and London-based Addelshaw Goddard have built their own internal technology and/or processes to monitor the program, analyze patterns and provide continuous improvement — which has changed Bassli's and her teams' day job dramatically, she says.

"For the same dollar, I now get business insight," Bassli says. "Law firms already have this information in their possession and now they are sharing it in a consumable and agreed upon format."

"Firms are eager to offer something different to clients, but they may not know how to get it done," Bassli says. "That puts the onus on clients to ask their firms for more, not just cheaper, faster and better," she adds. "There was a lot of thinking and talking through [with our firm lawyers] about what more they can deliver for the same price, basically. Adding that layer of business analysis and program management is so valuable — without a big haircut to the firms," Bassli says of the implemented program.

"Trust used to be all about relationships. Work was sent to outside counsel because of historical experience and long-standing knowledge of the client's legal needs. Now, trust is being built by the quality and quantity of new ideas and ways of working.My firms tell me what work we should start or stop doing, and where they should or shouldn't spend my money. Those are the firms I can trust more than firms who continue to sell themselves as smart and capable. They better be top quality! That is an assumption.The discussion should focus on creativity and smart risk-taking — together. This is the new way of developing trust.

"Real professional law firms want to do this. We [clients], need to push for it. Smart firms are eager, but need help with the 'how'. Once you have interest and appetite, you can make it happen. Finding the right firm for this sort of engagement can be painful and it's my job to be clear, as the client, about my expectations. Now the law firms need to be ready for clients who want to take this next step together with them."

While the first round of RFPs for the managed services program over 6 years ago, which ended up with Integreon, equated to a lot of "square pegs in round holes without any process or knowledge management, many firms are now very business minded in their responses," she says. "They want to play and move forward. The RFP process this time around was a completely different experience, with very savvy responses from several law firms."

"My goal is to have the firms manage the operation as much as possible. I just want to know the outcomes — which are driven by the goals we set for metrics. It's up to each side [client, law firms and legal service providers] to make sure it works financially, but we're in it together. They have become virtual extensions of my team, so that my team can pick and choose their work and not be stuck with everything that falls onto their desk."

While shifting to a managed service model was uncomfortable — or more likely, unfamiliar — for some of the in-house lawyers, overall, Bassli's team also loves the outcomes, she says.

"With my team, it was easy. They could either keep managing five or six law firms without knowing details about the work they're outsourcing, aside from it being done and assuming its high value and quality. Or, they could pick up the more exciting strategic work that we couldn't get to and have the law firm managed service provide business insight into the work they are handling on the team's behalf."

"We're just starting out," Bassli says of the 9-month-old program, "but what we get back is worlds apart from any legal traditional operating model." And, that success is what motivates Bassli to see her colleagues embrace similar innovations.

“I bring smart legal risk-taking in an operationally efficient way.”

"It's now my job as a good corporate citizen to share my success with our legal ops department. The legal ops department can be challenged when it comes to getting lawyers to try new arrangements with their law firms. So having a real example of innovation in action can go a long way in changing how in-house attorneys buy law firm services. I am lucky that the only person I had to convince was myself." Bassli says of her position as a practicing lawyer and team leader within the corporation.

"My team is delivering legal services to thousands of procurement clients across Microsoft in a different way," Bassli says. "I have a genuine passion and love for what I do, the autonomy to decide how to do my work, and the scope and volume to operationalize my practice of law in an efficient manner.

"I don't want the reputation that I only do process," Bassli cautions — her enjoyment of the art of practicing law clearly evident. "I bring smart legal risk-taking in an operationally efficient way. Otherwise I'd be stuck doing one contract at a time with a red pen and anxious business clients who want speed. We're a tech company — we need to move fast."

Bassli's next steps are to really globalize what she's done (it is a global solution today, but admittedly can be enhanced on a deeper scale) — a big project to wrangle. But, doing so will "keep Microsoft's other corporate attorneys focused on generating revenue for the company, and solidifying our global footprint in ways that demonstrate to our attorneys around the globe that they too, should have time savings and benefits that are material to them."

Now, if only she could find the time to write a manual about outsourcing legal services from a client's point of view…

Lucy Bassli joined the legal department of Microsoft in 2004, providing legal support to the central procurement organization globally and across all lines of business at Microsoft. In recent years, she has focused extensively on complex and global outsourcing contracts. She has negotiated strategic outsourcing contracts in the areas of legal services, finance and operations, and IT, among others. 

This article was originally published in the ACC Legal Ops Observer, a newsletter for members of the ACC Legal Operations section.  ACC thanks the Novus Law LLC Client Solutions team for contributing this article and producing the newsletter.

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