An Interview with Kiran Mallavarapu

Kiran, you have an inspiring and versatile background. You were trained as a mechanical engineer and your professional career include positions in engineering, consultancy and finance. Currently you are Manager of Legal Strategic Services at Liberty Mutual.

What inspired you to taking on this position, what’s it about and what are the core activities?

Thank you. In each of my former positions, I have been able to develop new skills that have helped me take on new challenges. As an engineer, I became highly detailed oriented, improved my problem solving skills, and concentrated heavily on analysis and risk management. As someone with an interest in the evolution of technology and process, I was excited about the prospect about leading an organization in a transformational industry.

It is an exciting time to be in the world of Legal Operations today. With millions of legal dollars being spent, renewed focus on legal processes, cost pressures and evolving technology, the delivery of legal services is ripe for change and evolution.

Legal Strategic Services serves as the Legal Operations function at Liberty Mutual. It includes the management of outside counsel relationships, bill review and payment, reporting and analytics and providing project management support. Our group is also responsible for identifying new ways of providing legal services and transforming our current processes and organization through our Innovation group. Legal operations at Liberty’s scale is about engineering the business of law, and I think my background dovetails nicely with that challenge.

A growing workload that in-house teams are facing, expansion into new markets and segments, more complex regulation and stricter enforcement, and the growth of new technologies are all creating challenges for legal teams.

When you started in 2016 you identified 4 areas to focus on: Culture, People, Process and Technology. Why those areas in particular? And what are the intended results?

As you mentioned, the Legal industry is at the crossroads of increasing complexity that requires more expertise to meet increasing demand, while still managing our costs. We want to service our policyholders and internal clients to the best of our ability all while allowing our legal professionals to practice at the top of their license, so we identified those four areas of focus. It is also a simple framework that allows us to break apart these issues and create different work streams and everyone immediately understands each of the focus areas.

To do this, we first needed to create and cultivate a culture to actively identify issues that get in the way of delivering the best quality service, question the way we do things, openly raise issues and foster an environment where people are willing to solve these issues. Hence, Culture is the foremost area of focus.

Once we identify these problems, we need to ensure we have the right skillsets to analyze the problem in front of us, and create solutions. We can develop some of these internally in the Legal department, and sometimes we need to bring in new talent.

Once we have the culture and mindsets, and the people needed for the transformation, we can focus on the task at hand – fixing our processes and upgrading our technology.

At the end of the day, our goal is to provide our policyholders and internal business clients superior legal services in an efficient way.

How does the landscape for these 4 areas look like in 2018? What progress did you make? What results and developments can you identify?

Our journey began quite some time back. Our Chief Legal Officer, Jim Kelleher, is a leader by example, and set the stage for all of us in the Legal department. The Department has consistently been committed to maintaining high ethical standards. To ensure our principles transcend to all offices around the world, Jim and his leadership team rolled out a clear Common Purpose and set of Guiding Principles. The Common Purpose has made it easier for all employees to better understand and align around the Department’s common mission. The Guiding Principles of integrity, expertise, client focus, talent and continuous improvement provide employees with a shared path for a commitment to the highest level of legal service and customer care. Even though he has spent his entire career at Liberty Mutual, he has led the way and challenged all of us to think differently about legal service delivery. Our leadership and management culture has changed significantly, to a place where we openly discuss issues that are facing us, collaborate more across various functions, readily request help and provide support, and more importantly, keep the client, however you define that, front and center.

We have grown our talent pool by developing or acquiring new skillsets such as project management, data science and artificial intelligence, innovation experts, process and workflow consultants, as well as competency in expert system creation.

Over the last few years, we have enhanced many of our processes and upgraded technology across many functions. From a simple payment process, which is never so simple, to developing standard processes for managing Corporate Governance for international entities we continue to evolve. Similarly, we have upgraded our matter management systems, billing systems, and developed new tools to manage various legal administrative tasks.

You have interacted with over 4,000 outside counsel over the last two years. At the same time external legal spend continues to come under greater scrutiny. How do you deal with that? How do you manage those relationships? How does one have a discussion with law firms?

In an Insurance contract, policyholder defence for covered causes is an essential part of the product we sell to our customers. In addition, as with any large organization, there are various corporate legal functions such as contracts, finance, litigation, compliance, etc. Beyond our strong in-house legal team, we also maintain a selective list of panel firms we engage based on jurisdiction, experience and diverse talent. Our External Counsel firms enable us to deliver on the promise to our policyholders and enable our internal clients’ to conduct essential business in many cases.

Our holistic approach to relationship management includes pro-active communication about many topics, including trends in the Industry, quality of legal services provided by the firm, various fee arrangements, billing guideline adherence and utilizing diverse talent on matters. We also have a detailed scorecard for many of our law firms and we discuss various metrics about the firm and attorney performance. It is essential that we share performance metrics with outside counsel to allow them to manage their legal service delivery to our expectations. We are highly motivated to seek the best value with our firms as it can directly financially affect the quality and price of the product Liberty Mutual delivers.

As companies increasingly focus on efficiency, they place more emphasis on in-house legal counsel, unbundling services, using smaller firms more often and keeping a close eye on alternative fee arrangements. Is this something you recognize? How does this match with the approach of your Department?

Liberty Mutual has been practicing legal operations for almost two decades now. For us, focusing on efficiency, while still maintaining quality is of utmost importance. At Liberty, not only do we utilize in-house legal counsel,but we also focus on developing tools and processes to make them more efficient. When we analyze a process, we are always asking if the right person is doing the right level of work. To fulfill the promise made to our policyholders, we select and utilize a variety of firms, depending on the jurisdiction and the expertise necessary for various matters, independent of the size of the firm. We do work with many firms on alternative fee arrangements, but given the nature of our business, that is not always applicable. Based on our ongoing desire to deliver best in class legal services, we continuously challenge ourselves with these types of questions: Where should activities be performed? Should the activities be performed in-house, by outside counsel or with alternative service providers? How might we enable or empower the client to take action? Should we stop doing something or should we consider developing a new competency?

In recent years the role of in-house legal counsel has significantly changed. No longer solely limited to managing risk, legal counsel is now seen as a business partner, driving and impacting strategic direction. Could you explain what impact your Department currently makes on the company strategy and business?

We organize ourselves to be in alignment with the business and provide the best possible level of service to support the business’ goals. The legal department is often engaged in new product development and policy changes. The best collaboration happens in the early stages of any project and the legal department’s technical expertise and experience is often an invaluable part of that process. The business expectations are increasingly rising and our department must manage the accompanying complexity of risk. To support these expectations, we have a highly specialized staffing model. This includes strong legal teams in Operations, Employment, Reinsurance, Public Affairs, Property and Auto Claims Support, Corporate Litigation, Finance, Compliance and Investments among others. Each of these practice areas are essential partners in shaping the larger corporate strategy for the organization and they actively help the business with regulatory changes, maintenance of intellectual property and cultivate the ability to differentiate ourselves in the market as a leading P&C insurer.

The legal profession is changing rapidly and professionals need to be more business and tech savvy. Much is going on in legal tech in particular. Think for instance about AI, blockchain etc. etc. Three key barriers to innovation in in-house teams can be identified: structural barriers, such as a business structure that makes it difficult for legal innovations to receive support from leaders; technological barriers, such as outdated IT infrastructure or practice management systems; and resource barriers, particularly the times it takes to plan and implement innovations. So some people argue that it’s crucial that in-house teams dedicate an individual or group to focus on innovation. Your Legal Department has over 2,200 employees in 10 Practice Groups. How do you keep up with all relevant innovations? Do you think it’s essential to have this specific (but rapidly changing!) knowledge and experience in-house, in your Legal Operations Group? What are the biggest advantages for having so?

Our Chief Legal Officer and the practice group heads have created a culture wherein employees – whether they be attorneys, paralegals or administrative staff – are constantly looking for better ways to do things. In addition, we have multiple small-group task forces consisting of cross-functional employees to learn and be the Legal Subject Matter Experts in new technologies like Blockchain and Artificial Intelligence. These groups are tasked to learn about the technology, identify the various business applications across the Industry and our company, analyze and mitigate potential legal risks or concerns, and ultimately, educate the rest of Legal group. It provides them an opportunity to develop and participate it in the long term vision of the organization. Additionally, within LSS, we have several projects that are leverage those technologies and others, to help our legal professionals in their daily work.

Due to the short-term and tactical needs we all face, having time to focus on the long term view gets scarce. For this reason, our Chief Legal Officer inspired us to create a group named Ideation and Transformation to focus on both short and long term aspects of innovation. This group is charged with understanding the legal marketplace, collecting as well as incubating ideas from the rest of the Legal Department, and piloting ideas to evaluate their feasibility.

As part of this goal, this team attends various conferences, networks with Industry leaders and vendors. They also invite potential technology vendors or alternative service providers into our organization to present, recognize potential pilot applications and enable transformation. In addition, this team engages with other innovation teams across the enterprise. So, as you can see, this is a multi-faceted effort.

About Kiran Mallavarapu

Kiran Mallavarapu is the Senior Vice President and Manager, Legal Strategic Services at Liberty Mutual Insurance.

He is responsible to lead and manage the Legal Strategic Services group. Kiran’s group is responsible for all Operations and Infrastructure in the Corporate Legal Department. Responsibilities of the group include Strategic Planning, Financial Management, Outside Counsel firm and legal vendor management, Data Analytics & Modeling, Technology and Innovation, Internal Communication, Billing and Auditing, Project Management and Admin Support. His team goals include driving and supporting initiatives to increase efficiency and raise effectiveness, bring about innovation for in-house legal department, and improve our relationships with their External Counsel partners.

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