Monday, February 8, 2016

Trends: Client Concerns + Client Pressures + RFPs = Firm Risk & Response

Two interesting stories via BNA share two sides of the coin on client success with consideration (in the context of risk management and beyond). First: "Companies Pressure Law Firms With Procurement Process" --
  • "As in-house legal departments look to cut costs and reduce inefficiencies, a process through which law firms submit competitive bids for providing legal services is becoming more mainstream."
  • Request for Proposals (RFPs) — a process more commonly associated with the procurement of other services — hit a 15-year high in 2015 in the legal industry. "According to a BTI Consulting Group survey that was discussed in a Jan. 27 blog post, more than half (56 percent) of corporate counsel respondents said they issued such a request last year."
  • "One company that is using the RFP process for some of its legal work is Staples Inc. In a recent interview, Stephanie Shores Lambert, Staples vice president and associate general counsel, told Bloomberg BNA that she is trying to push the use of RFPs within her company. 'For commodity work that can be done by almost every law firm, why shouldn’t in-house counsel take advantage of the opportunity to compare law firms and find one based on your criteria as opposed to the law firm’s view of what you might need?' Lambert said."
  • "In addition to cutting costs, the increased use of RFPs may also be a response to a growing disconnect between law firms and their clients, some observers say. 'Clients are using more RFPs because client service from law firms is down substantially,' BTI Consulting President Michael Rynowecer told Bloomberg BNA... The consultant observed that in 2015, only one-third of in-house attorneys said they would recommend their primary law firm to corporate counsel peers, down from 41 percent a year ago."
  • "If the RFP trend continues, Rynowecer warned that law firms face the prospect of losing out on work. “This trend invites competitors into a law firm’s client base,” he said. The consultant suggested that law firms improve their client services, which would make them less inclined to move to the RFP process. 'The chances of winning an RFP are between 12 and 15 percent, so the failure to improve client service costs real money,' Rynowecer said."
But, on the flip side, clients wield enormous power to drive change many are eager to advocate for within their own firms, as outlined in an op-ed: "Perspective: GCs Hold the Keys to Innovation" --
  • "General counsel are now firmly in control of change in the legal profession. Although they began driving change in the late 1990’s by incorporating technology, data, and metrics into their workflow, the 'Great Recession' planted them ever more firmly into the driver’s seat as the demand to cut costs intensified."
  • "But the measures, tools, and practices put in place as the economy languished have now become the new normal. The practice of law has forever changed, with legal technology and outsourcing companies emerging from the shadows to become a mainstay of the legal industry."
  • "As they increasingly play a multi-faceted role at their companies as strategists and business leaders, they should consider the latest legal technologies, innovations and processes that can drive such incremental change. The array of innovative possibilities is broad, from contract management tools, platforms, and processes, to actively using technology-assisted review in e-Discovery, to centralized dashboards and databases that will help them monitor their matters, gain insight into legal spend, provide outside counsel oversight, and house legal research."
  • "Absent external pressures, legal wheels tend to turn when the subpoena comes in the door and there’s an urgency to act — not the perfect time to consider new options. The GC, however, faced with a blizzard of legal matters on similar issues, can take a more purposeful approach to evaluating solutions."
  • "General counsel can, with measured steps, pave the way to innovation, best accomplished in partnership with the firms they partner with. If they seize the opportunity to foster proactive and deliberate changes through a thoughtful process — now, while the going is easier — they can avoid the pain and pressure they may face when it’s not."

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