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Using Technology (& a paralegal!) to Cut Legal Costs

Interesting profile of Mark Chandler, senior VP, general counsel, & secretary for Cisco Systems Inc. This technology company (based in San Jose, CA), produces Internet protocol-based networking services:

"Chandler is keenly focused on applying technology, some developed by Cisco and some that it has purchased, to lower in-house legal costs on repetitive but crucial work. ‘If you are dealing with a compliance matter that will affect how the company is perceived, you have to get it perfect, but other times very good is good enough,’ he said. ‘There are areas where you want to make sure you are doing the best you can, but you also want to be very efficient at the way you do it.’

[snip]

"Outside counsel: TurboTax can replace the tax preparer and Travelocity allows anyone with a computer to become his or her own travel agent. The same forces are engulfing the legal profession. ‘Fundamentally, service businesses like law are not dissimilar from any other industry,’ Chandler said.

"For example, Fenwick & West of Mountain View, Calif., which does nearly all of Cisco’s corporate, securities and mergers and acquisitions work, notified Chandler last year that its hourly rates were going up. He replied that he planned to pay Fenwick 5 percent less in 2007 than he had the year before.

"’To do that, I wanted them to figure out what was the 10 percent of their work that was the least value-added,’ Chandler said. ‘We found they had lawyers billing us $400 to $500 an hour doing fairly routine work filling out forms associated with some of our acquisitions.’

"Chandler and Fenwick came to an agreement. Cisco is adding a paralegal to fill out the forms and will save $400,000, but it is reducing its payments to Fenwick by just $250,000."

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