How SMBC Saved $2.7M and Transformed Outside Counsel Management

In the 9 months after switching to Brightflag, SMBC Americas Division:

• Saved $2.7 million through the consistent application of their discount agreements and their outside counsel guidelines, leveraging Brightflag’s AI-enabled invoice review.
• Saved over 300 labor-hours by replacing the Word document and email-based matter opening process with a matter request form within Brightflag—ensuring all necessary information is completely and accurately provided at the outset.
• Leveraged Brightflag’s AI-coded legal spend data to easily report on each business unit’s legal spend, providing transparency to the GC and to other senior executives across the organization. They are also using their data to benchmark and get the best value from their firms.

In a recent Brightflag webinar, SMBC’s legal operations team shared how they achieved these results. Read on to find out how.

Cost and Time Savings Through Digital Transformation

SMBC Americas Division offers commercial and investment banking services. The Americas Division has 5,000 employees and a legal department of over 80 people.

In 2022, SMBC embarked on an enterprise-wide strategic transformation initiative focused on enhancing the technology capabilities of the bank.

For the legal operations team, this transformation initiative presented a prime opportunity to replace their current e-billing and matter management system and generate significant cost and time savings for the business.

“We took this initiative as an opportunity to align ourselves with the priorities of the bank and improve how we managed spend,” said Kimberly Williams, Head of Legal Operations. “We knew doing so would demonstrate our partnership with the other groups, particularly finance, IT, and data governance, and show that legal was stepping into the vanguard of digital transformation.”

SMBC’s legal team was experiencing three key challenges with managing spend, which the legal ops team knew could be solved by implementing a more modern e-billing and matter management tool.

Challenge 1: Fixing Matter Intake

SMBC’s legacy system made opening matters time-consuming, leading to a poor user experience for both the legal team and the business.

“The process of opening a new matter involved too many handoffs from person to person,” said Nancy Scott, Head of Legal Technology. “With our legacy system and process, users would have to fill out a Word template and send it to legal ops via email. Legal ops would then review it, and more often than not it would be missing information or include something that needed clarification.”

“This would prompt the inevitable back-and-forth email ping pong game, which could take anywhere from a few hours to several days to resolve,” said Nancy.

Challenge 2: Compliance with Outside Counsel Guidelines

SMBC’s legacy system did not enable consistent application of their outside counsel billing guidelines, leaving it to their lawyers to review invoices line-by-line to detect issues. The legal ops team knew that this invoice review could be improved to secure significant cost and time savings.

“Billing guidelines have become increasingly complex over the years because legal work is getting more complex,” said Kimberly Williams. “There are always new activities that require new guidelines, like the increased outsourcing of work and the use of AI.”

“Our attorneys don’t have time to sit around reading billing guidelines, they have important practice-related jobs to do. So for us to really have confidence that each invoice was getting a similar degree of analysis, we wanted to leverage technology to directly apply our guidelines,” said Kimberly.

Challenge 3: Difficulties Analyzing & Reporting on Data

Finally, the difficult-to-use reporting in their legacy system limited SMBC’s ability to use their legal spend data strategically.

“Within legacy spend management systems, it can often be very difficult to get the data you need just to simply understand what you’re spending and which firms are being engaged on various matter types, so that you can actually start to make meaningful evaluations and strategic decisions,” said Chad Meyers, Head of Outside Counsel Management.

Rolling Out Brightflag

With their challenges outlined, the SMBC legal operations team set out to find a tool that could solve all these issues and bring greater efficiency and visibility to their management of outside counsel spend.

SMBC chose Brightflag because it streamlined matter opening, leveraged AI to apply their outside counsel guidelines to every invoice, and gave them complete visibility into their spend.

As a large bank with a lot of stakeholder groups, SMBC’s legal ops team took a considered approach to rolling out Brightflag. And Brightflag eased the transition by providing ample change management support.

“There’s an argument that people don’t like to change,” said Nancy Scott. “Well, I would argue against that. We change jobs. We order something different at restaurants.”

“People like change when they’re a part of it,” said Nancy. “We had extensive collaboration with our change champions, which was a group that represented the business and legal practice areas. We also created a very thoughtful training and communication program. I believe that the success that we’re seeing today is because we made those investments upfront.”

“I also want to thank our partners at Brightflag,” added Kimberly Williams. “We are a small but mighty legal operations team, and we got a tremendous amount of support from Brightflag in preparing communications and providing training sessions. It was at least a full-time employee’s worth of support associated with the change management aspect of the project.”

As the SMBC legal operations team plan ahead to the future, they are looking forward to using their dataset in Brightflag to strengthen and get increased value from their outside counsel partnerships.