Modern Legal Service Strategies for Procurement Transactions
To keep pace with business in an ever more competitive environment there is a rapid evolution from everything being bespoke, to commercial transactions being organised into a service continuum. Many commercial transactions follow the same pattern, and have the same structural framework. The ability to provide a service structure integrating business processes and legal service professionals, combined with technology, further automates the efficacy, effectiveness and cost efficiencies and also provides a real competitive business advantage. Additionally, corporations are demanding metrics driven delivery models, including SLA’s and service credits. These trends are increasing validated by the growing number of non-traditional legal providers including the big four accounting firms and boutique entries into the market.
Are legal services for procurement functions keeping pace with the rapid change in legal services?
Yes, absolutely. Procurement transactions represent the largest legal spend and highest volume of transactions in most organisations, consequently, the procurement function represents one of the greatest opportunities for these strategies in any corporation. Aside from all of the advantages mentioned above, the adoption of these strategies allows internal legal teams to focus on the most pressing and important transactions that require a higher-level of customisation, and additionally takes the more mundane tasks the desks of internal corporate legal teams thus providing greater job satisfaction. Generally, the trend has been to organise transactions into portfolios of recurring transactions, tactical transactions and highly strategic transactions. Process driven strategies can then be applied to the recurring transactions and to critical components of the tactical and strategic transactions.
Can you provide a case study of a client who has embraced the modern model for the delivery of procurement support services?
Ashe was initially engaged by Nike to develop a transactional platform that could handle thousands of transactions per year, which would require moving from its prior delivery model to an advance delivery model with the goal of increasing throughput. Nike’s requirements included: streamlined workflow, cost efficacy, SLA’s, metrics and continuous innovation. Ashe approached this challenge as a business problem versus a legal problem and provided Nike with a response that include structured workflow, new and innovative pricing models, unique SLA’s, and a variety of legal services at different price points. This initiative provided cost savings, reporting transparency, a much broader array of resources and increased efficiencies and the initiative was recognised at the highest levels within Nike. Additionally, this initiative was recognised as highly innovative by a host of commentators including the Financial Times, Association of Corporate Council and others. Robert Reynolds was individually recognised as one of the most innovative lawyers in the legal sector by the Financial Times and others for this initiative and others over the last several years.
What are the challenges of getting companies to move from the traditional model to the modern model?
Many corporate legal departments have become accustomed over many years to the hours times rates model offer by traditional law firms. Additionally, they often have strong allegiances to lawyers at the firms that have served them well for years, and have a depth of institutional knowledge. Additionally, the corporate law department has a significant legal budget for sourcing outside legal services that is not easily susceptible to challenge. Unless there is a significant business initiative to change, there is limited incentive to change. By contrast, the legal function doesn’t have a large budget for operating infrastructure, technology or process change. All of these characteristics create impediments for law departments to shift from the traditional model to these new models.
What are the challenges for a traditional law firm to adopt these strategies?
Traditional law firms, especially in the United States and other western countries, have built a business model over the last several decades that evolves around hours times rates economics and routine distribution of all profit on a regular cadence. Additionally, traditional law firms are typically managed by the more senior partners in the firm that are skilled lawyers that have little incentive to transition from the traditional business model and have less formal experience and training for building businesses. All of these attributes make it challenging for traditional law firms to commit to significant investment process development, technology implementation and the staff required for the modern legal provider. This proclivity is especially true with new strategies that tend to offer efficiencies that will drive down revenue, in particular service portfolios resulting in lost revenues.
What key attributes should you look for when choosing a Modern Legal Provider?
The best of the modern legal providers offers the combination of full legal service capabilities, process engineering, automated delivery and management consultancy. Additionally, they embrace technology and are adept at rapid change including the ability to easily to ramp up or ramp down in real-time to meet the demands of the market. They have commitment to outputs versus inputs and performance driven pricing. Additionally, they have the ability to provide global service capabilities.
Contact info:
Robert Reynolds – CEO
Denise Barnes – CBO
www.ashelegalgroup.com
Recognised as one of the world’s best and most innovative lawyers, Robert focuses on sourcing and technology implementation, mission-critical corporate strategic initiatives, global compliance programmes, and other complex and high profile activities.
With a particular concentration on IT procurement, Robert’s sourcing experience ranges from solving large-scale tactical procurement and outsourcing issues and to managing the business process service procurement arrangements and mission-critical data, IP, and other high-value portfolios of intangible assets.
We are a Corporate Legal Platform dedicated to streamlining the delivery of structured legal services to corporate clients by a community of carefully sourced legal service providers.
And we provide lifecycle management for the legal portfolio assets that result from our services.
