In 2009, after a multi-year effort to centralize its contracting process, Microsoft realized that its existing paralegal resourcing model for legal contract review was not sustainable in the long term. There had been an internal mandate to utilize a new purchase requisition system, which resulted in an increased volume of procurement contract requests flowing to the Global Contract Office (GCO) in the legal department. Further, the new purchase order process resulted in ever more complex transactions being forwarded to the GCO. As a result, Microsoft’s in-house resources were dealing with an enormous and growing volume of procurement contracts, including master services agreements and SOWs from a variety of suppliers and service providers.
The turnaround time for legal review averaged three days per contract, potentially delaying the procurement of needed goods and services. With more than 10,000 procurement contracts passing through the group, and this number set to increase, any delays had a significant impact on the business. At the time, Microsoft’s internal legal contract review resources had been in the same roles for 2-3 years and needed career growth. They also needed the time to focus on the more complex transactions now flowing into the GCO as compared to the growing volume of routine procurement contracts. With ever-increasing volumes of contract requests threatening to further strain resources, the GCO realized they would not be able to keep up, even with the help of temporary workers. The group required a new innovative approach that would better align resources to business growth.
From July 2008 through January 2009, Microsoft initiated a dual study of their current processes and the opportunities offered by outsourcing. From the study, Microsoft learned that contract review follows repeatable steps and that the high volume/low risk nature of certain contracts made the work ideally suited to a legal process outsourcing (LPO) provider. In addition to lowering resource costs, these factors would also make it possible for an LPO provider to apply Six Sigma practices and achieve improvements to the legal contract review workflow while offering measurable performance metrics. The study ultimately led to an RFP that compared vendors across multiple key performance indicators. After a rigorous selection process, Microsoft selected Integreon as its LPO partner in May 2009.
Integreon provided Microsoft a dedicated team of seven paralegals based in Integreon’s Fargo, North Dakota, delivery center. Then, as now, the team worked in a dedicated, locked-down area of the facility and operated inside Microsoft’s firewall to maintain data security.
During implementation, Integreon worked with Microsoft to define the key performance indicators and develop service level agreements that ensured on-time, high-quality delivery. To ensure we strictly follow Microsoft’s guidelines and processes, the Integreon team works from a constantly updated “playbook”, an extensive, jointly-developed manual that documents the entire legal review process. Developing the playbook was an essential part of the collaboration between Microsoft and Integreon throughout the on-boarding and knowledge transfer period, a collaboration that continues today.
Because the Integreon team is dedicated to Microsoft, their familiarity with client-specific systems, processes, culture and contract-related particulars further streamlines the workflow and improves quality.
Integreon uses detailed monthly reports to track results and provide valuable information for continuous improvement to Microsoft’s contract review process. Quality is rigorously tracked through a wide range of specific metrics, which include template selection, master agreement references, outcome, contract consistency and other mutually agreed-upon parameters.
As the dedicated team gained familiarity with Microsoft’s processes and systems, they were able to provide insight that improved and streamlined the overall contracting process. This has led to Integreon helping Microsoft update its playbook and advising the company during the development of a new proprietary procurement and contract creation system.
Initially, the team’s primary responsibility was to provide legal review of procurement contracts. This included making a determination whether a contract was required and, if so, subsequently drafting the contract. Over time, the engagement has expanded to support almost 20,000 contracts per year. Integreon has taken on greater volumes of work, and reviews contracts in foreign languages that include: German, French, Spanish, Italian, Hindi, Japanese, Chinese, Korean, Portuguese, Russian and Turkish.
To enable Integreon to provide multi-lingual services, we expanded the Microsoft program into our delivery center in Bristol, UK, the country’s fifth-largest city. The multicultural recruiting capabilities we’ve discovered in Bristol have helped make us unique in the legal process outsourcing industry, as the only LPO provider with a scaled, multi-lingual LPO delivery center, onshore in the UK.
Integreon significantly reduced Microsoft’s costs for legal contract review while exceeding prior measurements of user satisfaction and turnaround time, and freeing Microsoft resources to focus on core business priorities.
During our first two years on this program, the percentage of contracts completed by Integreon, increased from 67% to 99%. In Microsoft’s FY 2013, Integreon received 17,845 contract review requests, with more than 25% coming in June, including 800 in one day alone.
By 2013, the Integreon team dedicated to Microsoft had tripled in size and expanded to handle multiple new work streams.
In April 2013, Microsoft engaged Integreon for consulting support to assist in the identification of a new contract lifecycle management (CLM) technology platform. Subsequent to selecting the new CLM platform in January 2014, Microsoft awarded Integreon the contract for ongoing administrative and intake support for the platform.
Microsoft engaged Integreon once again, in April 2014, to support the review, data abstraction and migration of approximately 22,000 agreements to the new platform.
Concurrently, Microsoft developed an automated intake system to receive all requests coming to Integreon, collect critical data and provide visibility to internal business clients on the status of their requests. This expanded “help desk,” also managed by Integreon, now provides a one-stop shop for contracting services. Since taking over help desk services, Integreon has increased satisfaction scores by 15% and usefulness scores by 13%.
As of August 2015, Integreon has approximately 60 Associates dedicated to Microsoft at delivery centers in Fargo, Bristol and Mumbai, India. Together, they support contract reviews in 15 languages, across 160 countries, and provide contract help desk services and administrative support for the new CLM platform.
The average turnaround time for legal review has dropped from three days to less than one, and the percentage of contracts reviewed within the agreed-upon turnaround time has increased from 86% to 99%. As a result, Microsoft has a contract review model that offers predictable costs and is optimized for scalability.
Today, Integreon is not just a vendor, but a trusted partner for Microsoft. Together, both companies look to drive efficiencies and performance improvements across Microsoft’s entire legal department.