UK expert perspectives

From time to time, I find it useful and interesting to stand back and have a look at what others are doing to improve the effectiveness, efficiency, and pricing of legal services. I invited five UK-based professionals to send along a few thoughts about their “state of the art”.

1. Mark Ford is an associate partner and global law knowledge leader for E&Y, based in London. He recently joined the firm from Echo Legal, a document automation specialist, to lead the legal knowledge management function and support the organization in its goal to create the world’s leading enterprise legal services business. With more than 3,500 legal professionals in 94 countries, there is much for Mark and the team to do. At a strategic level, his focus is on three primary areas:

• content – to create, collect and curate market-leading content for legal professionals to use in serving clients
• systems – to build powerful yet user-friendly repositories to put this knowhow at users’ fingertips as and when they need it
• culture – to create a strong knowledge culture to ensure that every member of the organization is participating in the program.

Although knowledge management has existed in the legal space for decades, the explosion in technology in recent years has transformed the discipline – from its origins as a paper-based library function into one that can leverage the expertise of hundreds of professionals and is helping transform the delivery of legal services. An effective knowledge management program allows lawyers to reduce costs, improve efficiency, minimize risk, and deliver better services to clients.

The knowledge management landscape is shifting at a rapid pace, but Mark believes that one of the most exciting developments over the next five years is going to be in the area of search and retrieval. Advances in artificial intelligence and related technologies are making it much easier to identify unstructured information across an entire enterprise. This will reduce the need to build highly structured repositories with detailed metadata schemas, which is extremely resource intensive. These same developments, he believes, will also allow large organizations that process vast amounts of information to gain new insights from the “big data” that they hold. One day, even law firms may finally “know what they know”.

2. Nick Williams was recently a principal consultant with Proxima in London and will soon move to Santander UK as its director of procurement for professional Services. Nick has observed that the way in which procurement departments support in-house legal teams has really improved over the past 10 years and that this is very encouraging. Different factors will continue to influence the degree of success when buying legal services. Competitiveness means that law firms bidding for legal work are more confident about their offerings and bring forth new ideas with more collaboration on projects.

Openness is becoming fashionable – and the willingness of both lawyer and buyer to operate together to build better solutions. This work is vital for all parties to the discussion. Overcoming long-established obstacles between the two professions allows each to contribute to joint objectives so that results can be achieved.

Technology has gotten better, and automation is now helping lawyers to become more efficient and buyers to reduce costs. A solid understanding of the different types of work done by internal and external legal teams is now supporting more robust design / build / operate / maintain models, in many ways heightened by the pandemic-enforced lockdowns that have shown the art of the possible in remote working.

Greater complexity in law and commerce is driving a need for simplification and there is greater desire to understand how things work and how they can deliver better joint value, with more measures given to areas apart from pricing and rates.

Procurement tools, techniques, tenders, databases, and assessment criteria are becoming more refined and more sophisticated, helping drive legal teams’ and law firms’ thinking and contracting approaches. More go-ahead general counsel are taking better internal business advice and are at last contributing real numbers to tougher savings and cost reduction targets.

By acting as facilitators, procurement specialists can bring change when lawyers find it too challenging to separate the risk from the readies.

3. Ian Gray is an executive partner at Eversheds Sutherland, responsible for client relationships across 34 countries, a member of the global executive and also chairman of Eversheds Sutherland Europe.

Over the last 10 years, Ian has seen a great deal of innovation in the establishment of new external counsel arrangements. Going back even further, the firm worked alongside Tyco as it reduced from 260 firms around the world to one. A number of high-profile organizations followed a similar direction, with Avis Budget winning awards for transformation which included reducing law firms around the world from 700 to seven; and Turkish Airlines entering into an innovative arrangement with a fixed fee for all work globally spread out over a number of years. 

Ian thinks that such arrangements were designed to change the way in which corporate counsel and their law firms worked in the past. Many other large companies have followed suit, significantly decreasing the number of law firms with which they engage, striving for efficiencies, administrative ease and value for money. Things continue to evolve, with increasing emphasis now on trust in the law firm and its values, behaviours and culture says Ian.

4. Stuart Dodds co-founded Positive Pricing 5 years ago. Positive Pricing has advised many leading law firms across the globe. Encouragingly, one of the key themes it has witnessed and supported over the last few years has been a greater focus on how law firms can more clearly create, demonstrate, and communicate their value to clients. 

A clear benefit of providing law firm clients with more choice to determine the right solution for them at that point in time – for example whether the focus should be on immediate solution, cost efficiency, or an opportunity to mitigate future cost down the line. Although the focus of these efforts has been primarily on partners within the firms they work for, many are also now beginning to extend this type of thinking and training to senior associates and other key professional staff as part of more structured training programs or other pricing-related initiatives. Each will help law firms serve their clients better.

Any pricing-related initiative within a law firm, or indeed arguably any firm, must ensure that the initiative clearly aligns to the culture of the organization. Firm culture is often not fully considered when implementing such programmes, yet cultural considerations are critical. Firm culture affects the approach taken to developing pricing policy, pricing governance and the associated approvals, metrics and financial indicators adopted and communicated, the level of entrepreneurialism or flexibility permitted within the firm itself, and even the method, audience and frequency of training delivered. Cultural considerations have become even more apparent during the last 12 to 18 months during the pandemic where firms have had to consider how to serve their clients more consistently and appropriately, and what latitude or otherwise to allow their partners when determining commercial agreements.

Stuart’s experience with Positive Pricing, and as a pricing specialist for Linklaters and Baker McKenzie, is at the heart of his firm’s approach to its work. He believes that what ultimately drives successful pricing initiatives, regardless of firm, is aligning the initiative to firm culture, recognizing that there are many different paths to pricing success, and doing so in a clearly structured yet incremental fashion allowing the 'new behaviours' to be consolidated, refined, and more easily adopted.

One clear example of this in the last 12 to 18 months has been the rise of retainer or subscription-based arrangements, these often being instigated by law firms but also importantly and encouragingly by their clients as a means of improving predictability of legal spend, improving service delivery outcomes, and providing an opportunity to develop and create more value to both organizations. For a number of law firms and their clients, these types of arrangements are already well in place and on the second or even third iteration, as is a trend that Stuart is sure many will follow.

5. Deborah Watson is a partner and head of marketing with UK-based Coote O'Grady. This firm provides legal spend management solutions that include invoice review, legal panel management, and consulting on the full range of legal spend management issues. Coote O’Grady provides a unique human-led service that is supervised by qualified lawyers capturing real cost savings that could be missed by automated systems. The firm enables its clients to continuously save money while allowing in-house lawyers to focus on high-value, strategic tasks rather than administration. And most importantly, the Coote O’Grady team is always mindful to support the relationship between in-house legal teams and their law firms.

There has been much debate on the true solutions to reducing external counsel spend and whether reducing law firm numbers is the solution. Coote O’Grady suggests that the best approach is the more complex one of finding the right law firms, in the right locations, with the right expertise even if this means increasing the number of law firms. With the right expertise, increased visibility of legal spend, and access to legal spend analytics, the value of the law firms can be truly assessed, and real choices can be made about the results to be delivered.

Coote O'Grady's co-founder, Stacey Coote, suggests that he often encounters a range of problems with organizations concentrating spend with too few firms. These have included hefty price increases, less flexibility on cost reduction, reluctance to follow billing guidelines, speed of response, and deviations in quality.

As a legal services management consultant for close to 30 years, I encourage and applaud the fresh thinking and work that Mark, Nick, Ian, Stuart, and Deborah have shared with me. I look forward to chronicling developments again and sharing progressive business practices in future articles.