When Lorne O’Reilly was a securities lawyer at Gowling Lafleur Henderson LLP he had no plans to leave private practice. That is until he received a call from a headhunter in the fall of 2007 who convinced him to consider a position at Calgary-based oil and gas company Pengrowth Energy Corp.
“I had zero interest in changing; I hadn’t thought at all about doing in-house counsel work,” he says, noting he had been focused on securities and M&A law for four years and enjoyed what he was doing.
But after a series of convincing discussions he made the leap to Pengrowth and two years later he took what he had learned and went to Superior Plus Corp.
- Lorne O'Reilly, Superior Plus Corp.
When he joined Superior as associate general counsel, O’Reilly took the initiative to consolidate legal matters and has lead an effort to reduce external legal costs and create efficiencies through the integration of practices in areas such as contract management, claims management, and external counsel retention.
“When I looked at the initial organization Superior Propane alone had probably 35 to 40 different external counsel it used across the country,” he says. “Then we had other subsidiaries in the Superior Plus Group that also had a number of different firms. Some matched, some didn’t. I would call up on one matter and they would send me information and the audit would come back showing they were also handling other matters for some of our other business but didn’t know they were the same,” says O’Reilly. “Starting to work on synergies was an immediate opportunity for cost savings for us.”
O’Reilly admits he “had to take a chance.” It paid off. “We were able to demonstrate success on immediate response times for our internal clients and immediate cost reductions by managing the fact they no longer had to go to external counsel on some things and identifying synergies where they existed, for example, in labour and employment.”
“We were able to leverage the fact that by using one firm, not four different firms, and by using a particular lawyer (after analysis of the billings) we could say this firm has come out as the best player in results and in what they have billed us,” he says.
That involved “persistence over time” says O’Reilly, as many of the business units had strong relationships with their outside counsel. “To win that over we had to demonstrate success and value for them. The great thing is that my boss at the time had said: ‘Find what you can do and go out and do it.’”
60 Second Snapshot
The lawyer:Lorne O’Reilly The company:Superior Plus Corp.
- • Department size: Two lawyers in Calgary including O’Reilly, three commercial lawyers in Toronto for the chemicals business.
- • Member Association of General Counsel of Alberta (2011 - current).
- • American Bar Association and Business subsection (2011 - current).
- • In-House Counsel Network (2008 - current).
- • Canadian Bar Association, and Southern Alberta subsections (2004 - current).
- • Part of the founding committee for starting the Alberta Chapter of the Association of Corporate Counsel. He is assisting the ACC and its chapter board to promote local and in-person training, networking and professional development that is relevant to in-house counsel in Alberta.
As a result the cost savings have been substantial and the result on success and happiness from the clients themselves has been positive. The reduction in firms has allowed for efficiency.
In his time at Superior Plus O’Reilly’s reduction of legal expenditures today totals almost $1 million dollars, or 20 per cent, as well as consolidation of the number of law firms used by Superior across North America from 68 to 28 firms.
“When I came in there were well over 75 firms,” he says. “Each year we have had greater than 10 per cent reduction in legal spend as a result of internalization of external legal spend and identifying a different strategy on how we wanted to spend what effectively became legal dollars,” says O’Reilly.
Some of the 28 firms who remain on the company’s roster are there because they are working on a file that has been open eight-10 years. “In some cases we found it was not beneficial to continue the relationship with that firm and in other circumstances the firm was excellent but we found leverage in that they didn’t have offices in B.C. or Alberta and in trying to ensure consistency many areas require a national and consistent approach,” he says.
The reduction of firms allowed for “tremendous efficiency” as well as leveraging of “costs and benefits.”
O’Reilly credits “slow persistence over time” because many of the business units had strong relationships with their external counsel.
But the reduction in number of firms used has resulted in greater control of the legal expertise provided to Superior, and the responsiveness to client matters for issues that require provision to external counsel.
O’Reilly has also led the development and implementation of new governance and employment policies and practices as well as advising on compliance training initiatives.
In a similar vein, O’Reilly revised and updated the standard form agreements used by the Superior Propane and Superior Gas Liquids organization, including plain language modifications for clarity and simplicity in negotiation. These amendments also allowed for presentation to sales personnel to assist in their understanding of the agreements. Now, only those matters that require material change from the standard form require review (which has led to a reduction in requests from the business clients).
“Once you are in-house you’re not just a lawyer, you are a businessperson who has legal expertise,” says O’Reilly. “The idea was to use that experience to provide value to allow people to have comfort.”