Chevron GC gripes against technology vendors

Charles A. James, General Counsel of Chevron, Inc., started his keynote remarks at Los Angeles’ LegalTech program by describing his employer, Chevron, as one of the Corporate 5!

I’m familiar with Corporate 100, AmLaw 100, etc. When he spoke about the top 5 companies in the world, he jarred my sensitivities. He’s right, of course, and I intellectually knew that. But, he connected with the emotional side of my understanding. He got my attention.

Of course, that’s the function of the keynote presenter – get the attention of the audience.  He did that by describing his gripes against technology vendors … and challenges to law firms.

Discussing how much work Chevron “farms out” (outsources) to outside counsel, and the metric (see below) he uses to increase the size of his internal legal department, Mr. James was more candid than I recall from other GC.

Gripe #1:
Grossly overselling the practicality, functionality and integrate-ability of the vendor’s product. He suggested that sellers’ claims are grossly wrong – “complete enterprise solution;” “seamless integration with existing system;” “… we have an update that addresses your question in a couple of months.”

Gripe #2:
“Why can’t we all get along?”  As Rodney King said, Mr. James asks why is it that there isn’t more integration of technology systems?

Gripe #3:
Vendors are not realistic about the conversion and implementation costs, as well as the learning curve. And, in Chevron, technology training has to get in line with compliance, governance, HR, etc. training …. The world doesn’t stop for technology vendors to provide sufficient training to the Chevron folks …

He noted that the challenge that we (our country) has is to return to the mentality that “it is not a crime to be in business.”  Compliance today, he said, is the biggest challenge for business. And that compliance effort does not contribute to the development of products or profits. If left to their own devices, he is convinced that business will produce jobs, good level of living and quality of life.

He concluded with his view that the key for the future of the legal profession will be the development of information technology to manage knowledge.

He also gave us several statistics that, in my mind, were significant to consider when thinking about the future of law firms:

Chevron revenues exceed $200 billion;
Chevron has 2000 subsidiaries; 110,000 employees; 400 lawyers.
His budget is $350 million which includes $190 million spent with outside attorneys.
Chevron is sued 2.5 times each day with $10 billion damages exposure every day.
When he arrived at Chevron, the company had 700 outside law firms and today they have 500, though 35 law firms handle 70% of their outside legal work.

Chevron tracks the number of hours billed by outside counsel. When a lawyer bills Chevron 1200 hours, Chevron will take that work inside … either by making an offer to the attorney to join Chevron and leave the outside law firm, or hiring another lawyer for their staff …

While Mr. James disclaims any real knowledge of technology, he certainly understands what he needs from technology to do his job better.  Those who serve customers/clients must listen to the needs/messages from those who sign the check if they want to survive and thrive in the future.

Thank you Mr. James for being so direct and so candid.

Categorized in: Management, Technology