Innovation Driving New Approach to Legal Operations at Novartis
Innovation Driving New Approach to Legal Operations at Novartis
Maurus Schreyvogel, Novartis’ Chief Legal Innovation Officer, advocates for a more efficient legal function and the broader benefits for the industry.
Novartis is one of the world's largest pharmaceutical companies, with a market capitalization of nearly $200 billion. With dozens of brand-name and generic drugs in its portfolio, the Switzerland-based healthcare company has the imperative to closely manage its intellectual property in a global economy that is robust with medical products. Such management requires a legal department with the expertise and flexibility to succeed in a constantly evolving market.
Maurus Schreyvogel first joined Novartis just over 14 years ago and has grown through the ranks to his current position of Chief Legal Innovation Officer (CLIO). He has had a number of accomplishments at Novartis, and, as CLIO, he is responsible for managing and driving change within the firm's legal operations amid trends in the pharma and legal industries. Stout has acted as a strategic partner with Novartis for several years, and The Journal caught up with Schreyvogel to discuss the challenges and opportunities for the firm's legal function.
You joined Novartis in 2004. What first attracted you to the company?
I did not like the law firm experience and was looking to move in-house. I was looking for an energetic company in an industry that I could relate to. Novartis, therefore, was my first choice.
What are some of the highlights of your in-house career, and how have they molded you as a legal professional?
Yes, early in my career I took a rotation in the Internal Audit operations. During this assignment I got deep insights into many different functions across the globe and got to appreciate the importance of cultural difference, scalability, and operational effectiveness. It also became clear to me that the legal function falls behind in terms of functional maturity. From that moment on, I dedicated my career on helping the legal function to rise to the top and maximize its value proposition.
Another important milestone in my career was establishing transparency and providing management information as a basis for decision making and, more generally, operational and legal risk management. But I probably only appreciated the full magnitude and impact years after we put systems in place that provided the referenced management information.
A third highlight was the successful implementation of the first Center of Excellence (CoE) in our legal function. This Center of Excellence operated based on process design, was outcome-oriented, and was managed by key performance indicators. It was early proof that legal services could be provided in an alternative way and formed a solid basis for my more recent work. This first CoE was focused on electronic discovery, and additional CoEs to support litigation, data privacy, and human resources followed that. At Novartis, where we have a decentralized legal function – in that lawyers report to our individual business units – the Centers of Excellence enable us to manage resources flexibly across the various businesses. And it is an effective way toward standardization and ultimately automation.
Take us through the transition from your role as Head of Operational Excellence (OPEX) to Chief Legal Innovation Officer.
The easiest way to explain is that as OPEX head, I used to be responsible for today and the immediate future, whereas as CLIO I am expected to shape the legal function of the future. It is a much more strategic role looking to anticipate changes in the pharmaceutical industry and determine the impact on the firm's legal operations. Additionally, I am trying to shape and screen the legal industry to ensure that Novartis' legal operations are, and remain, cutting-edge.Concretely, I am very involved to promote CLOC – the corporate legal operations consortium – as I think this organization did a lot of great work to help industrialize and modernize how we provide services. While doing so, I am stressing the current state and linked needs of legal departments based in Europe. Every time I open my LinkedIn account, I'm amazed how much talk there is about [artificial intelligence], tech, algorithms, and machine learning. But when we think of the legal profession first and foremost, it's us – the legal professionals. We have to think about our workplace and how we want to add value because the way legal operations currently work, in many ways, is no longer fit for purpose. Being a member of the legal leadership team helps to put weight toward ideas that we develop within our team and interested parties.
What are the core responsibilities of your role as the CLIO at Novartis?
I would say there are four key areas. One is outside relations, which is managing relationships and partnerships with outside counsel, technology providers, and third parties. A second area is culture and change management. With this, I want to empower and support associates on my team to continually challenge the current state and think of new ways to work. Third, there's technology and systems, in which I focus on proposing, implementing, and managing technology for the firm's legal operations. The fourth area is performance measurement and improvement, which involves things like benchmarking, budgeting, and managing vendor performance and customer satisfaction.
What are some of the challenges of being the CLIO at a large pharmaceutical company?
I see myself as a change agent, and I face the usual challenges of a person who drives change. Most people like the way they work today and are skeptical vis-a-vis change. So as you might expect, I face some resistance when driving initiatives to improve the way we tackle commodity-like legal work.
The other challenge is self-made by us, who are leading the industrialization of the legal industry. We have been overpromising what algorithms can do. And we likely underestimated the complexity to implement these systems for them to work optimally and be leveraged cross-functionally.
How is your team organized, and how does that help with your position as CLIO?
Novartis Legal has roughly 900 professionals located in over 50 locations, though most professionals are located in Switzerland, the U.S., and Germany – which are the headquarters locations of our divisions. Sixty percent of our people focus on general legal operations and 40% on intellectual property (IP). The operations community consists approximately 60 professionals – where 40 focus on IP and 20 on general legal.
The corporate innovation and operations team is small and is not structured. We have several associates as well as more senior-level professionals. Clearly the associates have their primary responsibility such as eDiscovery or spend management, but this is to focus on the operational activities. The innovation activities, such as piloting new technologies or legal project management activities, are organized in scrums and involve a community of "interested” associates who, by the way, are all invited to my team meetings, which are open for everybody.
What are some of the things you get excited about as CLIO?
My "kick” is to rethink the way we, as legal professionals, work and demystify legal services. I am working toward the industrialization of the legal industry. This will provide legal access to everybody equally, and it will hopefully happen in a way that is instant and quick. I am very excited about digital platforms that provide legal assistance in some way, such as LegalZoom, Flightright, Globality, and ebay's online dispute resolution service. My vision is that legal services, for example for startups, can come out of the box, or disputes can be solved using a dispute resolution service instead of waiting for lengthy court proceedings.
From a legal perspective, what are some trends you have observed in the pharma industry in the past 10 years?
One trend is that there has been a shift from traditional law firms to service and technology providers in the areas of litigation and investigations, mergers and acquisitions, and intellectual property. I've also observed more standardization, centralization, and automation of tactical activities of the legal department with buy- and sell-side contracting. Another trend is that legal project management practices are being increasingly used for complex cases, particularly litigation, mergers and acquisitions, and business development and licensing.
What industry trends do you expect to see in both the near term (five years) and long term (30 years)?
I expect a full legal industrialization process in the next five years, impacting both the business and consumer sectors. Longer term, I expect legal education and the legal system overall to change, such as with lawmakers, judges, and enforcement agencies. These are exciting times because we could face a completely different legal environment offering hopefully a more accessible, transparent, cost-effective, and simple legal concept.
If you think about how people operate in terms of multiple industries and professions, and if you think about the current court system, we have significant potential to expedite how business is conducted to get matters resolved faster. Instead of having to go through courts, we can go through platforms where there is more clarity in disputes on an international level. The people will get the benefits of standardization and automation. If we think of standardization, it's maybe as big as industrialization for other industries. What we are going through in the legal industry is similar to the invention of the steam engine. There has been some push-back, but we need to continue to change in the industry to continue to improve it.
In what key areas can legal departments or legal services look to be innovative?
They can be innovative in all key areas, but in different ways, such as with the trends we previously discussed. Additionally, I see a lot of potential to innovate in how we source legal services. At the end of the day, we should try to get to value pricing. Instead of undergoing a complex invoice process, I suggest that corporate clients should just offer what they are willing to pay for a given transaction and offer it up on the market as a take it or leave it. This clearly does not work for all types of transactions but likely to many more than we consider today.
Let's talk a little bit about the U.S. and Rest-of-World Center of Excellence (CoE) you established. How did that come about?
The CoE is our way to drive standardization and simplification. While the segregation of the CoE between regions might make sense from a corporate separateness perspective, from an operational perspective I believe that the more the merrier in order maximize return on investment. As a next step, we are considering making our Discovery CoE accessible to other groups within our own department, for example mergers and acquisitions and regulatory compliance, and other functions such as procurement or global security.
What do you look for in partnering with outside law firms and other providers?
They need to show curiosity about the transaction at hand and strive for optimal outcomes considering the broadest sphere of interest. Also, deep subject matter expertise and emotional intelligence should be a given.
What was your very first job?
I loaded and unloaded cigarettes and liquor from trains and lorries [semi-trucks] in the tax-free zone of Switzerland at age of 13, as a summer job.
What's a fun fact about you?
The translation of my family name is "screaming bird." One version to the meaning of the name is that one of my great grandfathers was looking out for fires during night sitting on the city wall of a medieval city. Once he detected a fire he was screaming for help from up the wall, hence screaming bird!