Last week, Dr. Silvia Hodges Silverstein schooled ETL readers on the basics of legal procurement. In Part 2 of this series, we’re recapping the highlights from Buying Legal Council’s 2018 Legal Procurement North American Conference in NYC.
Picture this. A conference where key decision makers from Fortune 100 companies including Walmart, GlaxoSmithKline, Intel and Credit Suisse explain their vetting process for choosing legal services and products to an audience of big law partners, academics, legal tech companies and service providers.
Where attendees are not just talking the talk, but come from organizations where the implementation of technology and processes to streamline efficiencies is how they conduct business day in and day out.
Sounds too good to be true? All this and more occurred earlier this month at the Buying Legal Council 2018 Legal Procurement North American Conference in NYC. Buying Legal Council, founded and led by Dr. Silvia Hodges Silverstein is “the international trade organization for professionals tasked with sourcing legal services and managing supplier relationships.”
The organization’s mission is to “advance the field of how legal services are bought. [They] aim to enhance the value and performance of those buying legal services and their organizations, share intelligence on sourcing legal services and managing supplier relationships, as well as document and promote best practices, and facilitate an innovative dialogue between buyers and sellers of legal services, as well as other stakeholders in the legal market.”
Here are some of our takeaways from the conference:
- Legal Spend Management: Go Your Own Digital Way! The keynote from Dr. Benno Quade of Software AG from Frankfurt Germany made the case that lawyers are uniquely suited to develop their own apps and databases with “data driven touch points.” While many of the tech developers and lawyers in the room questioned the premise, (“coding in python” became the buzzword of the conference, repeated enough to become its own drinking game), the idea that lawyers should play an active role in identifying metrics to evaluate and quantify legal spend is a good one.
- In her presentation It’s Not a Snowflake, Catherine Crow, Founder and CEO of Digitory Legal and former Orrick litigation partner argued that high stakes litigation costs can be controlled using task-level benchmarks and disputed the notion that lawyers can’t predict legal spend.
- Legal industry analyst/speaker Ari Kaplan took a retrospective look at a decade of legal industry benchmarking. Insights included this gem:
contrast this with:
(Slides courtesy of Ari Kaplan Advisors)
- Former Ropes and Gray partner, Hugh Simons, kicked off Day 2 with a provocative keynote essentially arguing that there is no incentive for big law to change its billing models to increase efficiency because partners are making too much money. He made the case that the billable hour is the root of all evil and the only way to effect change is to take the work away from them. Simons contended that it is far more efficient for corporate legal departments to hire in-house counsel at the average salary of $300K (still a very decent living), than pay outside counsel at the tune of $700K a pop. While grumblings were heard from the big law attendees in the room, the legal procurement crowd was all ears.
(Slide courtesy of Hugh Simons)
- Some of the most interesting conversations surrounded the concept of legal procurement teams putting guidelines and processes in place for choosing outside counsel. By forcing in-house counsel to rate the complexity of the matter and quantify “risk”and then choose from a pre-approved list of firms that have agreed to AFAs and other terms set by the company, legal procurement has been able to fundamentally change legal spend. While procurement doesn’t have a voice in the ultimate selection of outside counsel, they focus on the process. Marty Harlow, Procurement Director at GlaxoSmithKline, volunteered that 90% of their work going to outside counsel is fixed fee. This vetting is combined with leveraging alternative service providers and technologies to supplement, and in some cases replace expensive outside counsel. For instance, Walmart is now using Legalmation, a new technology that harnesses AI to read complaints and produce answers, interrogatories and requests for production.
In the legal procurement world, the concept that legal is a business isn’t disputed and the notion that law firms and lawyers aren’t fungible is. Imagine that.
Deb Tesser is Director of Special Projects at Above the Law, and the point person for Evolve the Law, ATL’s Legal Innovation Center. Follow Deb on Twitter (@Deb_Tesser).
