Write up on establishing a win-win panel arrangement

Case study: 

Establishing a win-win panel arrangement. When the law firm turns up with an AK47 to panel negotiations, GCs should take more than a stick!

LEX360 has been engaged in two legal panel processes recently (one for a new GC who had inherited an unwieldy panel, and the other was for a long-standing GC whose panel arrangement was coming to an end), and the key learnings from these are shared below in 5 steps.

HEADLINE: The market is tough; law firms are pushing hard to win small gains but, in the process, are losing client confidence. Clients equipped with market best practices, an engaged internal stakeholder team, good processes and clear project management will secure the requisite value and business-focused outcomes.

STEP 1 “Engage the right stakeholders to understand the current and desired state around capability, costs, coverage and outcomes”.

• Identify who has an influence over the project through stakeholder analysis to secure their ‘needs and wants’ across the panel lifecycle (establishing, go live and maintenance).
• With the identified stakeholders, undertake a 3C analysis (LEAN problem-solving tool) to establish what’s working well and what needs to be done better across the deliverables. This will identify the outcomes you must get right as well as go a long way in getting the stakeholders engaged.
• Measure the current state maturity of the panel against market best practices. LEX360 will help you identify the opportunities that need to be addressed across the lifecycle be it a panel design principles document, a well drafted RFP or the RFP infrastructure (billing guidelines, golden rules, reporting dashboard etc).

STEP 2 “Get the RFP pack prepared and agreed with the project team”.

• Ensure that there are clear accountabilities across those involved in the process. Identify the project manager, sponsor, project team and appoint any external advisers early.
• One of the toughest stages of the panel process is to negotiate terms and conditions. Therefore, getting the Master Services Agreement (MSA) or Letter of Engagement drafted and included in the RFP document and allocating a sufficient score to the lack of a mark-up will ensure the process is easier at the contracting stage.
• LEX360 can help the project team with Billing Guidelines, MSA’s, golden rules, value add tables, AFA tables and the RFP pack so that the output you secure is market best practice.

STEP 3 “Build an RFP that will enable you to distinguish true strategic partners and not break those engaged in the process”.

• Do not over design the RFP process – remove questions, steps and limit the responses to what is necessary. Law firms and in-house teams spend so much time responding and marking poorly designed RFP’s that the process becomes poor experience for both sides.
• Generic procurement-led RFPs do not deliver or hit the mark. Not asking bespoke questions on capability will result in generic experience and limited risk identifications, which will make it hard to identify true partners.
• Asking for examples of best practices using the STAR (Situation: give the necessary details of the example. Task: highlight the role played in that situation. Action: explain exactly what steps were taken to address it. Result: detail the outcomes that resulted from the actions achieved will ensure that sufficient detail is secured.
• Design the RFP with completing and marking it in mind. Many RFPs are responded to sub-optimally because they are cumbersome. Ensure that there is clarity on what is expected for each question that is asked, including word limits and what not to include.

STEP 4 “Explain to the internal stakeholders what the ‘ask is of them in terms of time and outputs’ to the internal team and stick to the programme where possible”.

• Legal stakeholders worry that the process will result in their key law firm or lawyer being excluded from the future state. It is important that any concerns are managed by inviting them into the process so that they partake in the process and accept the results.
• It is important to be clear about the commitment that will be required and ensure that line management knows about prioritisation of the RFP at critical stages.
• Helping the stakeholders with how to complete the scoring in some detail, in our experience Excel training may be necessary if you do not want cells being overwritten and pivot tables being broken. Fair distribution of scoring, model answers and calibration sessions and other scoring hacks reduce the burden on stakeholders.

STEP 5 “Addressing poor buying behaviours and poor selling practices are not resolved with a good RFP process”.

• Once the panel is selected it is important that all documentation is completed, and handover packs are provided to those that need them.
• Mobilisation will require the coming together of the panel firms with their peers and key stakeholders to detail expectations and ways of working etc. In our experience a mix of ice breakers, presentations, and workshops to solve some of the hot topics around panel maintenance work well.
• Establishing networks across the panel to optimise the value adds, collaboration, disaggregation, relationship management, clear reporting templates and cadence etc. will ensure a successful panel.
• Value adds, rebates or volume discounts offered are there for the taking but a failure to manage them result in huge losses for legal teams.

In our experience due to politeness, capacity and capability constraints issues between the business and the panel are not managed which results in silent resignations on both sides. Having advisers like LEX360 in your corner will give your panel review and maintenance the focus and drive to secure great value.