Thomson Reuters’ 2021 State of Corporate Law Departments report shows that the top priority for general counsel continues to be reducing the cost of providing legal services. The report also notes that the top metrics tracked by corporate law departments are spending metrics, with 92% of departments monitoring their total spend by law firm.
Convergence — the process of selecting a panel of preferred law firms — was born out of the desire to control these costs. However, a mounting body of evidence shows that convergence only works when law firms on a panel are actively managed and treated like partners, not vendors.
Check out our In Practice interview with PNC’s Greg Jordan about the company’s law firm panel program
Here are seven ways that your law departments can build a relationship-based model with your preferred panel of outside law firms:
- Culture — Build a culture of mutual trust and collaboration in establishing the panel and throughout the relationship to develop partnerships where both sides seek to be fully engaged and invested. When negotiating hourly rates, fixed fees, and other compensation models, you should do so with a win-win mindset.
- Liaison — Pair each law firm in the program with a lawyer within the law department whose role is to be the relationship lead. The liaison’s role is to serve as the bridge between the department and the law firm.
- Panel size — Keep the panel to a size you can actively manage while providing the breadth of coverage you need at different price points. Consider having at least two highly-qualified firms on the panel in each of the practice areas to foster healthy competition. That way, you can ensure that you can move your business from an underperforming law firm with only minimal switching costs.
- Competition — Foster healthy competition among the law firms on the panel by using matter-specific request for proposals (RFPs). The occasional use of RFPs signals to the firms that they are not guaranteed work; that indeed, an engagement has to be earned. When issuing matter-specific RFPs, consider inviting firms outside the panel to learn about their capabilities and approaches.
- Outside counsel guidelines — Draft clear, concise “guidelines” that foster the partnering relationship you want to develop. The relationship leads should discuss the guidelines with each law firm and invite their input.
- Reviews — Establish a schedule of touchpoints for each law firm that covers budget reviews, matter updates, and end-of-matter reviews. Include an annual or biannual formal “state-of-the relationship” review in which each side has the opportunity to offer candid feedback.
- Retreats — Conduct an annual in-person retreat inviting key partners or teams (for example, the key client team) from law firms on the panel. The event provides a meaningful forum for the firms to learn more about your company’s business and the law department’s business-aligned goals. It is also an opportunity for panel lawyers to meet each other and discover ways to collaborate, while providing an opportunity for everyone to get to know each other personally.