Originally recorded on the Pricing Matters Podcast by Digitory Legal. Digitory Legal is now part of BigHand. Learn more here.

Aurelia Spivey, Marketing Consultant with BigHand, chats with Gregory J. Kaple, Senior Director, Legal Business Services with Kaiser Foundation Health Plan. Greg Kaple is a venturer and a strategist known for creating unique business models and solution delivery innovations for complex professional, technology, and services organizations. In his current role, Kaple is transforming the KFHP legal department’s service delivery model to provide affordable access to high-quality legal care.  Comprised of more than 80 attorneys, 170 total staff, and a combined annual budget of more than $150 million, the legal department is responsible for protecting KFHP’s $84 billion nonprofit business from risk in an age of unprecedented healthcare industry business and regulatory change. By focusing on core principles of transparency, collaboration, and infrastructure the department is reducing costs, enhancing the quality, and setting a new standard of value-oriented outcomes for KFPH’s members, community, and industry.

Kaple has lead strategy development for such companies as Time Warner, New York-Presbyterian Hospital, Squire Sanders, and WilmerHale. His business ventures have included founding a professional service firm, a media production company, a cloud services provider, and a chain of high-end men’s barber clubs.  He has been a member of several University programs with West Virginia University and Ohio University where he created a breakthrough class on Entrepreneurial Sales. Kaple has a Master's Degree of Science in Telecommunications Management from the Stevens Institute of Technology and a Bachelor's degree in Business Administration from Ohio University.

Top three takeaways from this episode

• Data is a Game Changer. Legal departments and their panel firms should work in partnership to improve the quality of their data to drive decision-making. 

• Making it Easy. Communication tools like portals, reference guides, and focused training materials, help your panel firms to understand and digest your Billing Guidelines. 

• Diversity is a Bigger Priority than Ever. A focus on diverse staffing, work allocation, utilizing the ABA diversity survey data enable, and a commitment to taking action. 

Price is a symbol of value and legal ops matters because it's simply putting enough discipline around the undisciplined art of legal to put a price on it. To know what we value for real versus what's just being shaded, obscured, or done the old-fashioned way.

Podcast Transcript:

Gregory Kaple 
So a lot of it's been about how can the firm's use these guidelines to improve their game. So that they're giving us better data, that they in fact can use as much as we can use together as well.

Aurelia Spivey 
Welcome to Pricing Matters, a podcast by Digitory Legal. Digitory is a data analytics and cost management platform and service, bringing data-driven pricing and cost prediction to law. My name is Aurelia Spivey, and I will be your host as we speak to leaders who are making an impact in legal pricing, discuss market trends, and find out from them why pricing matters.

Welcome to the Pricing Matters podcast. Our guest today is Greg Kaple. Greg is the Senior Director, Legal Operations Program at Kaiser Permanente. Thanks for joining us today, Greg.

Gregory Kaple 
Good afternoon Aurelia. 

Aurelia Spivey 
Hi Greg, thanks for joining us today. 

Gregory Kaple 
Thanks for having me.

Aurelia Spivey 
So, I'd love to start with, I always start with a question for our audience to get to know you a little better. So can you tell us a little bit about your journey into legal operations?

Gregory Kaple 
Well, they say I came popping out of my mom's belly practicing legal ops. If that's not the case, it surely was before they called it Ediscovery or anything else. I was running operations for lawyers in cases, risk management, and turnaround. That lead to technology, process improvement, and cost reduction, what lawyer doesn't like reducing costs, especially partners in firms, and eventually teaching them how to price their matters and match their deals with inside counsel that led to the coinage of a phrase after 2009 called legal ops, from bookclub to CLOC. That all led me to Kaiser Permanente and the last six years of really kind of proving that basic business operational practices are the first things to be done in legal operations, accruals, e-billing, and engagement contracts. Things that lawyers would advise their clients to do and now on to our third round of our guidelines for outside counsel.

Aurelia Spivey 
Thanks for sharing that, Greg. So what you were talking about is your guidelines 3.0 and that's one of the reasons that I wanted to get you on the show today. You recently refreshed the guidelines and what were the driving principles behind this project?

Gregory Kaple 
Well, a simple one was that we installed a whole new matter management and e-billing system. And so the language in our previous guidelines, 2.0 is just outdated. So there was an obvious need for at least the editorial update. The significance of a third version of maturity is really more than that. It's about getting beyond our guidelines 1.0, which was publishing just aspirations and getting something out there. Or guidelines 2.0 was, well, let's actually try to make that meaningful and make sure we understand how to do it from a process standpoint. Guidelines 3.0 is about that maturity of wanting to make these guidelines easy and adaptable to firms not onerous and kind of our way. Part of the reason to make it easy and adoptable is because it's about really tightening up compliance and enforcement. We want these guidelines to not be aspirational, but actually operational. And then as fate and timing have it because we started this initiative early in the year knowing it would be the right thing to do, we got hit with COVID and the recessionary impact and the need to really tighten up our spending. So the timing was just perfect, that we're able to come onto these guidelines 3.0 right when we really have a pretty high hurdle to get over as far as reducing our legal spend this year.

Aurelia Spivey 
Talking about COVID and the current market, how have you gone about communicating the guidelines and the changes to the guidelines, both internally and externally?

Gregory Kaple 
You know, COVID is really kind of helped us in a lot of ways because it's made virtualization so common, that it's not about being in person at all. Previously when we rolled out guidelines 2.0 we did a lot of release meetings using web presentations and audio conferencing. But this time around I think we're all used to a virtual environment and so we've been hosting an internal briefing and round-the-table sessions with our attorneys and our administrative assistants. We've been recording those sessions and putting them on to our intranet so that people can come back and reflect on them. Or as we get new members of our department, we can reuse that material. 

Then we've been reaching out in much the same way with our outside counsel and doing video and slide-sharing training with members of our team and our outside consultants. Going through what we think is a pretty entertaining performance, around how we're increased, up-leveling the game of how we work together with our outside counsel using data. So part of that is being able to use virtual tools like web and screen share presentations and in addition to that is breaking out and meeting with some of our top firms one on one to really customize, making sure that they're familiar with the guidelines and adhering to it as well. I think we'll be talking a little bit about what the ongoing maintenance will be, how we're going to evolve our administrative assistant team ongoing with our attorneys and outside counsel, and where and how we might host some programs in the future, that call attention to specific topics or help to continue to keep it fresh as we get close to the end of the year deadline.

Aurelia Spivey 
I know one of the challenges that is often cited with outside counsel guidelines is ensuring that the law firms have read the guidelines. So that program at least seems you are putting out a lot to the firms to enable them to be able to interact with the guidelines.

Gregory Kaple 
Absolutely. In fact, one of the keys is that we're going modern and we've got a Kaiser portal now for legal operations. So there's a place where they can come get access to the guidelines. We've carved them up so it's not one big Encyclopedia, Britannica, tome, but it's separate sections with easy-use reference guides, that can be easy for an attorney to find just what they need to look at when they're doing work for a client, even down to a ticketing system where people can ask for help. We're invested in their success as much as they're invested in ours, and these guidelines are meant to give us the rules of the game to be successful.

Aurelia Spivey 
One of the other things that are always interesting in a project like this is to find out what key themes have surfaced in this iteration of the guidelines.

Gregory Kaple 
This iteration is really all about data. It's about the fine-tuning of the processes so that we're actually getting the feedback we need about how our work is being done and how we can choose to do it better going forward. So as much as we realigned some of the verbiages around our team connecting collaborate instead of eCounsel, or took a look at some of the things that we needed to emphasize or highlight around our cybersecurity or around our travel policy, per se. We really lead off by focusing on the time entry data, establishing the reasons why block billing is bad for data and why we're going to increase our penalties on that if firms trade in bills with it. Identifying how they can reduce vagueness in their time entry so that ultimately we can really use the time descriptions to start to look at how work is being done and do a better job of pricing it both for us and the firm's going forward. As well as project managing and so we put more emphasis on our project management policies. Gave more detail about what we expect as far as staffing and what it means, especially for project managers in our very large cases. We've gotten specific with some of the things like our E-billing vendor and the fees that are expected to be paid by our firms. And our cybersecurity policies, which have become pretty comprehensive within Kaiser as far as all of our law firms are really being assessed or reviewed, to make sure that they're adhering to the things to keep our data safe. So a lot of it's been about how can the firm's use these guidelines to improve their game. They're giving us better data that they in fact can use as much as we can use together as well.

Aurelia Spivey 
Another area that has really come to light during the current COVID crisis is diversity in the legal market. Can you tell us a little bit about how diversity has played a role in this guidelines update?

Gregory Kaple 
Well, it's a wonderful example of what 3.0 is different about compared to 2.0 or prior. Mark Zimmerman, our general counsel, has been really an early and profound leader in diversity, establishing early on within our department, a committee and initiatives around MCLE. pipeline, establishing diverse panels, and all of our hiring. Actually, when I first got there six and a half years ago, he was one of the first to really put a diversity goal around supplier diversity into the actual AIP goals for employee bonuses. And so at that time, we were very focused on bringing more of our business to a small minority and women-owned firms, in particular, in our litigation area. With the success we had there, we've grown that to become 40% of all of our matters and about 25% of all of our spending in both our medical malpractice and our non-med mal go to diverse firms. So the guidelines are a chance for us to take that to the next level and really start looking at diverse staffing, and not just in diverse firms, but in majority firms as well. And to begin to align around the new ABA surveys so that we don't make this work onerous and redundant for firms, but something they can leverage off of a standard so we can all pay attention to the data and actually take action on it. So these guidelines really kind of set the foundation for that. We'll be going forward with future version updates that are incremental, like 3.1, and 3.2, and in that, we're going to be outlining some work we do with a couple of our best-of-breed firms around how to share data, like from the ABA survey more effectively.

Aurelia Spivey 
One thing I think would be helpful is if anyone who is in your position, who is looking at a refresher or even, I wouldn't say their first set of guidelines but maybe if they're a small legal operations team. What sort of pointers would you give to someone embarking on a project like this?

Gregory Kaple 
That's a great question because I have been through three of them now, plus, prior to joining Kaiser working with clients on it. I can kind of break it down into a simple journey and it starts now with thankfully the abundance of information from CLOC that there are templates and standards available out there, you can just kind of grab and at least you got something. I think when I got the Kaiser, we had been debating over guidelines, 1.0 for like two or three years, right? The key was just getting something out there, even if it was aspirational, or at least there was a catalyst for conversation, some areas would begin to get improved. Grabbing something and doing it quickly with the idea that you're going to improve on is there's no shame in it and there's probably more beneficial to getting something out there than it is to waiting too much longer. 

The second step is to hire some good expertise. It's likely that your internal organization is both strapped for time and attention and probably also doesn't have the insight and expertise in how others are applying these guidelines. So a small bit of investment into a group like Digitory can result in a lot of weight of results, by just helping you very quickly assess what in that standard template is really applicable to you or not. Where are some of the new best practices in the industry, something you want to consider and incorporate. Then given your unique culture, how are you going to go about integrating this and that's where your third step is. That's going to be your hardest one. How are you going to communicate it internally, so that your internal attorneys and leadership are all in agreement and behind it, and willing to support it when they engage outside counsel and when they're reviewing invoices with their supporting management. If you don't have a strong base of support on that, you're not going to really be able to put a lot into effect. So the key there is as you engage that socialization with your leadership, pick a couple of key qualities of the guidelines to focus on, don't try to have them go attorney on it and review all 16 or 100 pages. It's best to have that expert and that internal team already had it vetted well enough that you're coming with credibility and leading them through a process of acceptance and adoption, not actually design and construction of the guidelines. 

Assuming you make it through step three, then you're on to actually putting it to the audience that makes a difference to the outside counsel. I think there it's important to recognize that as much as they're there to serve you, you need to create something that's motivationally engaging and serves their benefit if you really want them to make use of it. And so, again, keeping it simple and maybe the number of rules you roll out so that the rules you roll out you can roll out well. It took us way too many years up to guidelines 3.0, to have an online portal, and I would suggest those types of tools are good to start using earlier. Because getting your outside counsel to adopt three rules very effectively is probably more important than trying to rule out 10 or 20 and having nobody be familiar with it. 

The final step and this can sometimes be the hardest is the monitoring and the enforcement, and I'll tell you, I'll give you all chip to skip ahead there, and that is really looking to at least the start and outside organization that you can leverage to help you do bill review and monitoring. They can bring immediate enforcement to the guidelines and rules. Over time, you can decide if that's something you want to bring in-house or continue to leave out with an outsourced partner, but to get started quickly and have it done very proficiently and immediately begin to deliver savings, and I mean savings in the tunes of hundreds of 1000s of dollars a month, it can be helpful just to have that actual enforcement and not just the expecting the goodwill of your outside counsel or your busy attorneys are going to be able to enforce it.

Aurelia Spivey 
That is a really fantastic 101. So I think anyone listening is going to really appreciate you sharing that process and your journey that you've taken. This is the pricing matters podcast. So I usually ask the question why does pricing matter to you? But in your case, I think it's more appropriate to ask, why does legal operations matter to you?

Gregory Kaple 
You need to trust your original instincts and just say, why is pricing matter? Because price is a symbol of value, right, and legal ops matters because it's simply putting enough discipline around the undisciplined art of legal to put a price on it. To know what we value for real versus what's just being shaded, obscured, or done the old-fashioned way. So pricing is actually what matters to me and building the underlying infrastructure of the NASDAQ or the stock exchange so you can trust your transaction, that's what legal operations is, that's why that matters. So that I can get to the reality of the pricing that matters so that I can really help flesh out one of the new frontiers of financial arbitrage and that is legal. The sooner we can get discipline reliable operations, the sooner we can transact and the sooner we transact financially, the sooner we'll run all the inefficiencies out of the system. Why does that matter? Well, I mean, depending on which camp you're in Aurelia, that might matter because it'll put more money back in the pockets of corporations and shareholders or even partners at firms, so you have to really realize that. But that's not why it matters, because if we figure out how to financially arbitrage legal, what happens in most perfect markets and economies is that services become less expensive and more accessible. So that the majority of those who demand and need the services are actually those least able to afford it right now and if we can begin to improve legal operations to provide better financial transactions of legal, we can make legal more available to those who really needed it in our country.

Aurelia Spivey 
Thank you. I love that answer. Well, thank you so much, as this has been a fantastic conversation. 

Gregory Kaple 
Yeah, thank you. I really appreciate it. 

Aurelia Spivey
Thank you for listening to Pricing Matters, a podcast Digitory Legal. To find out more about our guests please visit our podcast page. If you have any feedback or guests that you think we should feature, please reach out to me. Thank you for listening, see you next time.