Top tips to smarter relationships with your law firms

Recommendations are based on extensive market research conducted with both legal teams and law firms using a pairwise approach. General counsel and law firms were interviewed and asked to provide a counterpart to interview.

  1. Act as a catalyst

    Managing a panel effectively involves much more than cutting costs – it’s about getting the right result for the business in a way that aligns with the business’ value proposition and strategy – driven by significant effort from the top down in the legal department.

    • Be a champion for your panel – provide advice and help firms to improve process and align with the strategy of the business
    • Interrogate the data – carve out time to tie down subjective comments such as ‘I use them a lot” – what does that mean in numbers? Enrich quantitative data with qualitative data e.g. feedback surveys. Data plus anecdotes is a powerful combination
    • Align your panel with the value proposition of the legal team (which is aligned with the wider organisation’s strategy and expectation of legal)– regarding teamwork, collaboration, thought leadership, service delivery and how you work together. This is not a one off exercise but should be reviewed at least quarterly
    • Batman and Robin - to complement the GC role, consider a reliable relationship manager that can work with law firms
    • Check and challenge: Does the work need to go external? If yes, which firm has the most appropriate expertise and skills? Consider a ‘certification programme’ – once performance meets expectations, they are ‘certified’ in that area subject to spot checks
    • Ratings and rankings: A firm’s ranking in the Chambers Directory may not be the same as the legal team’s view. A starting point when looking at a panel is that the quality is equal. Then consider differentiating factors such as hourly rates, individuals in the firm, tools and technology used etc.
  2. Establish a 3-month predictive view

    While it can be challenging to predict 5 years ahead what work you will do with an external law panel, you can more safely predict the next 3 months with the following approaches:

    • Empower people - they know what they’ve achieved in the past and should be confident they can replicate this in terms of deliverables, duration and cost
    • Activity based budgeting (ABB) - base costs on the cost of past work and activities to plan a budget, considering the business’ risk appetite. Is 80% correct good enough?
    • Have a clear strategy - running a cost-efficient department is not about presenting the smallest number – it’s about the right number and the right result
    • Review constantly - on a rolling 3-month basis, constantly review what was forecast in the budget versus the reality and interrogate the differences – why have they happened? What could’ve been done differently?
  3. Create a framework of transparency and trust at every stage of interaction

    Critical to transparency in social exchanges is the reduction of ambiguity. Sustaining a positive cycle of transparency - and therefore, trust - requires active effort on the part of both the in-house legal team and law firm.

    “The key to improving transparency for an instruction is to let it be driven by a joint understanding of the underlying business problem.”

    • Clearly indicate the want for a deep level of mutual engagement beyond the project at hand
    • Proactively provide context to the underlying business problem
    • Adopt a relationship-based approach, allowing for law firms to demonstrate how value can be added beyond excellent service on the specific matter

    Exploration phase:

    • Invest in joint problem search, encouraging greater participation from law firms to define the scope and specifics of the instruction

    Explanation phase:

    • Use a structured consistent process to collaboratively agree the underlying objectives of the matter, the shape of the matter strategy, implementation plan and how changes will be managed
    • Ensure clarity on what constitutes a successful outcome and how value will be measured, removing as much ambiguity as possible
    • Encourage law firms to provide greater visibility on steps and actions taken during the execution process
    • Examples include regular updates (and obstacles to) to progress; sharing intermediate findings and providing regular cost updates
    • Actively renegotiate scoping
    • Conduct a joint evaluation with law firms
    • Consider using a third party for joint appraisals to provide objectivity and neutrality in engagements with a difficult history
    • Ensure a focus on incorporating lessons learned, sharing of best practice and proposals for changes in how the respective teams could work in future engagements, on improvement projects etc.
  4. Support and further drive law firms to improve client experience

    Client experience is often embedded in how a legal department selects its law firms and continues working with its panel.

    • Collaborate with law firms to map your journey as a customer during engagements to establish clear, empirically validated processes which are applied consistently
    • Work alongside your law firm to map steps in the journey against client experience and outcome metrics
    • Ensure all team members, across law firms and the legal department are aligned, trained and aware of the journeys and associated metrics
    Problem resolution
    • Establish well-defined mechanisms, processes and clarity on accountability in how problems will be addressed and managed
    • Examples include clear policies and an unambiguous escalation process
    • Consider joint reviews to establish root cause, plans for remediation which focus on learning outcomes
    • Ensure all elements and stages are well-communicated and understood by all levels both in the legal department and the law firm
    Strategic coherence
    • Establish a structured process to aid law firms understand your business which can be cascaded consistently across the firm
    • Consider application of an iterative process to collaborative scoping of matters. For example, agree a broader vision at the start and regularly revise as the engagement progresses using a structured, consistent process
    • Become the primary catalyst for collaboration through helping energise and establish value networks between law firms and your business to improve collaboration
    • Incorporate multiple levels of feedback. One between the respective teams related to activities, problems and related concerns. The second between the GC and Managing Partner focused on the overall relationship
  5. Consider the impact of the procurement function

    Increasingly prevalent procurement processes introduce a third party between legal departments and law firms and prioritise transactional aspects of business.

    To ensure the granular aspects of client experience can still be effectively measured and articulated by both law firms and legal departments a two-prong approach is best:

    • Consider using procurement for creating shortlists of panels and then apply qualitative considerations to evaluate client experience
    • Encourage and empower law firms to better articulate in monetary terms the business value of client experience to better resonate with procurement departments

Additional recommended reading:

Trust and transparency between in-house teams and large law firms: Towards or away from genuine trusted advisors?

Client experience: The new differentiator for law firms

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