Legal Budgeting Legal Budgeting ProjectProject

byby

Jason HuszarJason Huszar

OverviewOverview

Newland CommunitiesNewland Communities Largest residential land developer in the United Largest residential land developer in the United

States States 23 Offices Nationwide23 Offices Nationwide Approximately 200 employeesApproximately 200 employees

IT Director (“Firefighter”)IT Director (“Firefighter”) Oversee and manage IT operations and strategic Oversee and manage IT operations and strategic

technology initiatives technology initiatives

Legal DepartmentLegal Department Approached to manage project Approached to manage project

Team: Accounting, Legal, IT, Software ProviderTeam: Accounting, Legal, IT, Software Provider

IntroductionIntroduction

Problem StatementProblem Statement The legal department lacks the ability to The legal department lacks the ability to

analyze legal expenses across projects by analyze legal expenses across projects by vendor (Law Firms) and cost codes. vendor (Law Firms) and cost codes.

Business ObjectiveBusiness Objective Conduct positive NPV project that will reduce Conduct positive NPV project that will reduce

the time requirements of Newland’s General the time requirements of Newland’s General Counsel, and staff, to review legal expenses. Counsel, and staff, to review legal expenses.

ConstraintsConstraints

Maximum of 6 months to completeMaximum of 6 months to complete

Minimize time commitment of team Minimize time commitment of team membersmembers

Cannot Utilize Newland’s in-house Cannot Utilize Newland’s in-house developer developer

General Counsel = difficult requirements General Counsel = difficult requirements gathering gathering

Project not to exceed $30,000 Project not to exceed $30,000

RequirementsRequirements

Development a method for retaining vendor Development a method for retaining vendor information when processing multi-project information when processing multi-project invoices.invoices.Cleanse accounting data to ensure accuracy Cleanse accounting data to ensure accuracy and user-acceptance. and user-acceptance. Report formatting must be clearly labeled and Report formatting must be clearly labeled and easy to read. easy to read. Phase 2: incorporate budget variances.Phase 2: incorporate budget variances.Phase 3: Dev. Advanced Analysis dashboard for Phase 3: Dev. Advanced Analysis dashboard for General Counsel (Time, Region, Vendor, Type)General Counsel (Time, Region, Vendor, Type)

ProblemsProblems

Multi-Project invoices lose vendor specific Multi-Project invoices lose vendor specific information during A/P processinginformation during A/P processing

Vendor DuplicationVendor Duplication

2003 legal expenses miscoded 2003 legal expenses miscoded

Lack of procedure to prevent vendor Lack of procedure to prevent vendor duplication and miscoding of expensesduplication and miscoding of expenses

Current accounting system report formatCurrent accounting system report format

Problem SolutionsProblem Solutions

Multi-Project InvoicesMulti-Project Invoices Modify reimbursable corporate job master record to Modify reimbursable corporate job master record to

associate with respective project jobassociate with respective project job

Vendor ConsolidationVendor Consolidation Develop vendor consolidation layout template for Develop vendor consolidation layout template for

software provider and ensure proper implementationsoftware provider and ensure proper implementation

Miscoded ExpenseMiscoded Expense Obtain approval and reclassify all 2003 expenses to Obtain approval and reclassify all 2003 expenses to

appropriate legal designated cost codes. appropriate legal designated cost codes.

Problem SolutionsProblem Solutions

Lack of Coding ProceduresLack of Coding Procedures Create and disseminate proper legal coding Create and disseminate proper legal coding

proceduresprocedures

Current Report Format UnacceptableCurrent Report Format Unacceptable Develop cleaner on-page layout and larger Develop cleaner on-page layout and larger

font size font size

ProgressProgress

Design Document Created/Gen. Counsel Design Document Created/Gen. Counsel approvedapprovedRFP submitted/Proposal approvedRFP submitted/Proposal approvedReclassification of 2003 Expenses and Reclassification of 2003 Expenses and Coding Procedure ImplementedCoding Procedure ImplementedVendor Consolidation List Created and Vendor Consolidation List Created and Approved(6000 -> 4000)Approved(6000 -> 4000)Vendor Consolidation Tested in Test Vendor Consolidation Tested in Test EnvironmentEnvironment

ProgressProgress

Reports Implemented in Test EnvironmentReports Implemented in Test Environment

Vendor Consolidation will be implemented Vendor Consolidation will be implemented into Production Environment July 12, into Production Environment July 12, 2003. 2003.

Formal Report Review on July 14, 2003.Formal Report Review on July 14, 2003.

Report Implemented into Production Report Implemented into Production Environment on July 21, 2003. Environment on July 21, 2003.

SummarySummary

Within BudgetWithin Budget

Slightly DelayedSlightly Delayed

Project resulted in many positive changesProject resulted in many positive changes

Phase 2: Budget Variance ReportsPhase 2: Budget Variance Reports Begin Mid/Late AugustBegin Mid/Late August

Phase 3: Legal Data Mart/Advanced Phase 3: Legal Data Mart/Advanced Analysis DashboardAnalysis Dashboard Begin Early OctoberBegin Early October

Legal Budgeting ProjectLegal Budgeting Project

Questions?Questions?