Beyond billing: how to manage external legal providers
What’s your main focus when you manage relationships with external legal service providers? For in-house lawyers, the default answer has often been cost. But keeping downward pressure on top-line costs is only part of the picture. As power has shifted back to the buyers of legal services, so too has the level of sophistication brought to buying habits. There’s untapped value and efficiency to be gained from external providers, if you know where to look. There are clear best practice strategies you can pursue to find that value.
Defining the scope
Before you start, be clear in your mind about what you expect from your provider. It used to be that law firms could accept an instruction and offer no clarity on how much it might cost until the job was over. Those days are hopefully behind us, but you still need to set a clear objective and communicate it clearly. While the best providers will take the time to ask you, and line up their resources against that objective, many will just dive in. Don’t let them: make sure they know where they’re headed first. Similarly, make sure regular check-ins are established at the outset, so your providers don’t stray from your original objectives.
Your increased sophistication as a buyer of legal services is reflected in your style of work, reporting capability and internal objectives. In-house teams are more business-minded than ever, as they collaborate and work to prove their value within the organisation. Your external legal providers must do the same. When their reporting and style of work flow seamlessly into yours it creates a happy partnership. If a provider isn’t prepared to adapt to fit your needs, are they the right partner for you?
Managing the service
Similarly, legal providers’ offering can no longer be fixed and narrow in scope. We all know the speed at which conditions can change on a transaction. Law firms that align their working rhythm to flag problems as soon as they arise, and address trivial issues before they become serious offer great value. Think of leading providers in different industries; when a loyal customer makes a complaint to Amazon, they are often refunded before even receiving a reply to their complaint email. The best legal providers are striving for this service level, rather than limiting their exposure and inflating their bills. It’s in all of our interest to create useful solutions beyond the narrow scope of a brief.
Another lesson from big tech that can help you get the most out of your external legal providers is the value of data. Service providers are collecting and recording project data to generate learnings and efficiencies for future projects just as you are. Ask them to share it with you – it might unearth insights that can make you a more efficient, high-performing team. Providers often capture detailed metrics like cost per document, or speed of sign-off, that might sit outside of your normal data stack. Make that information work for both sides and it will lead to a more successful project, and create a more meaningful relationship to build on.
Collaborate rather than compete
Working in partnership rather than on opposing sides of a relationship is what we find works best. In other service environments – design, or agency work, for example – it’s normal for external providers to collaborate with each other, independently of your direction. External legal providers can do the same overcoming issues of conflict and competition. Creating an environment where they can collaborate, rather than competing with each other, it can raise the overall quality of the end-product – which is always the goal.
What do you value?
Perhaps most importantly, take the time to define what added value means to you. It means something different for every business. Spell it out, and you’re more likely to get it. We find that each party is often surprised at what it may mean. It can be anything from bringing in expertise from an area like diversity and inclusion training and best practice in procurement, to supplying office space and meeting rooms for client initiatives. Thinking outside of the box and tailoring additional services to suit you can work for everyone.
The final step in changing the way you manage external legal providers is to focus on the debrief. Work out why things went the way they did, what worked, what didn’t, and how things could change next time. Which metrics proved the most useful? Were resources correctly allocated and utilised? Was the price estimate right, what changed? Don’t skip the debrief: capture learnings, share them with your team, and with your providers.
At Halebury, we find that looking beyond top-line cost can have a huge impact on satisfaction levels on both sides. Even if that cost remains the same, a more efficient, aligned, value-adding service is certainly something worth paying for. Contact firstname.lastname@example.org or email@example.com to discuss how Halebury could support your in-house legal team or business, or come and speak to us at a forthcoming event to find out how you can get more out of your relationships with external legal providers: http://halebury.com/halebury-events
You can follow Denise on Twitter on @denisebn
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