How Data can Drive Law Firm Panel Management & Review
You don’t need us to tell you that it’s vital to carry out panel reviews to the highest possible standard. That’s why it’s fascinating to see how corporate legal teams are carrying out modern panel reviews, at a time when the global legal sector is undergoing real change.
Chief among these shifts are increasing client expectations and value-for-money demands. The Future of Law and Innovation in the Profession report says many lawyers are adopting legal technology to manage outside counsel fees and make legal operations more efficient. But what does this mean to those of you managing your relationships with firms and benchmarking?
Well, the backdrop is corporate legal teams need visibility on legal operations. The C-Suite expects it. Finance needs it. And leading General Counsel are becoming increasingly committed to delivering it. Specifically, General Counsel and Chief Legal Officers want:
- quality, well-priced in-house and outside counsel
- a central view of firm work by practice area and geographic region
- clear datasets to inform decisions about work resourcing and cost control
So what are the challenges corporate legal teams are experiencing managing their relationships with outside counsel whilst collaborating on matters?
Legal operations data chaos
Imagine a global legal team with millions annual in external legal spend. It likely has thousands of invoices coming in from firms every year. And that could create hundreds of thousands of individual line items. It’s a daunting challenge to manage, process and analyse this much data.
Hourly billing uncertainty
Then there is the hourly rate model. How can you set a realistic scope and appropriate fee arrangement when legal work can be fluid and unpredictable? How can you create ways to drive cost control with this uncertainty?
Global legal panel realities
That doesn’t change the fact that firms will always be strategic partners. They are the trusted advisors you’ve chosen. And you need strong communication and transparency in that relationship. Look again at that global legal team with millions in external spend. That could mean as many as 25 firms operating in more than 12 countries.
Lengthy, complex matters
Add into the mix the fact that legal matters can go on for months or years. When this happens, you need to be able to reliably track matter progress and status. You need to have a channel to communicate with the internal and external team. Ultimately, you need a system of record to have visibility across all legal department data.
It’s against this backdrop that companies have chosen Brightflag to create a data feedback loop to inform how they manage and review panels. At a glance, they are taking a data-driven approach that looks like this.
Strategic Management of Legal – The Data Feedback Loop
Based on what we’ve learned from all of our customers, here are some key steps you can take to use data to inform modern law firm panel management and review.
Step 1. Get matters right, from the start
When your organisation needs legal advice, you have several decisions to make. Will this work be managed in-house or outsourced to a firm specialized in the practice area? If you are going to engage outside counsel, you’ll need to decide the matter’s scope and an appropriate pricing arrangement.
Having a data-driven matter management system to standardize the very beginning of matters across your organization can drive effective control and better visibility.
Step 2. Actively manage matters and billing
But you can’t manage matters without clear legal billing guidelines. They ensure firms resource work the way you want them to. Data enforces guidelines and build historical trends about firms’ value for money.
- internal law firm communications
- administrative work
- travel between meetings
- and legal printing services.
Step 3. Make the strategic leap
When clear billing guidelines, data-driven project scoping, and better budget management combine, legal operations can get the resourcing trends it needs to make panel review an evidence-based process.
This is the strategic leap for senior legal leaders and key organisational stakeholders. Seeing who meets budgets drives fundamental cost control for your organisation, as well as giving insight and visibility into internal team member performance. Being able to capture and visualise data about firms is a key driver of forecasting too. This strengthens relationships with law firms – and between legal and finance departments.
Step 4. Drive good relations with outside counsel
But don’t stop there. You can use data for relationship review meetings with partner firms. While you’ll already be driving behaviour change at the invoice level, using data to strengthen relationships can push it to the next level. It helps you have fair conversations about any under performance or resourcing concerns. And that can only be good news for everyone involved.