How to Establish a Panel of Preferred Law Firms: 7 Best Practices for In-House Legal Teams

How to establish a panel of preferred law firms

Establishing a panel can be a powerful tool for streamlining your legal operations — and getting better work from your law firms in the process.

PERSUIT’s Legal Advisory Team has worked with several in-house teams on panel projects in recent months. As we’ve seen in those projects, there are a few steps you can take to set yourself up for success when establishing a panel.

Here are seven best practices our team recommends when establishing a panel of preferred law firms.

Want to know more about how to improve your legal operations? PERSUIT is how leading in-house legal teams make data-driven decisions when engaging and working with law firms. Learn more about PERSUIT.

1. Define your objectives

A panel is a tool and the first critical aspect that should be understood is what objectives your organization is looking to achieve. For example, the goal may be identifying and establishing a set of firms with the expertise and experience in a particular practice area, jurisdiction, or scope.

It is also vital to establish a project team of internal stakeholders. This may include internal attorneys, legal operations, and procurement if necessary. Ensure your stakeholders are aligned on the panel objectives at the outset.

2. Define the scope of the panel

The next step is defining the scope of your panel. It is crucial that you have a thorough understanding of your own work to ensure that you are able to best inform and instruct the potential panel firms on your outside counsel needs.

Providing firms with context for your panel, such as the team and work structure for your legal needs, the nature of matters, historical or projected volume, as well as expectations for the panel firms, are vital. It is also important to understand the current landscape, the firms currently being used, how the work is allocated across outside counsel, and what policies, procedures, and internal architecture is in place that may impact the implementation of a panel.

3. Structure the panel

The next step is to start thinking about the structure of the panel. Once your organization has a firm grasp of the current landscape and what you expect to achieve and improve by establishing a panel, it is time to build out the structure of the engagement.

Defining your panel structure enables your organization to ensure that the panel structure is tailored to your organization’s objectives and scope. It also empowers you to compare and contrast the potential outside counsel providers.

This is your opportunity to define exactly what you need from your providers. While the best practice is to never limit your discounts, don’t be afraid to really hone in on additional value adds, such as accessibility to a hotline, free consultations, or a commitment to a free secondment!

Some key things to consider could be:

  • What pricing structures do you want to capture?
    • Baseline expectations are hourly rates by title or timekeeper
    • Value-added services
    • Volume discount structures
    • Alternative panel pricing models
  • What is the desired length of engagement?
  • How do you want to segment your panel engagements?
    • What are the practice areas?
    • What are the jurisdictions?
    • What are the currencies?
    • What level of granularity do you want in the timekeeper rates?
    • What law firm tier groups do you have?
  • What are the key considerations and other qualitative aspects that are crucial for your organization to assess and evaluate potential firms?
    • Key team members or relationship partners
    • Expertise in that specific area
    • Capacity and capability to cover the work
    • Project management and technology capabilities

4. Set measurable and actionable targets and evaluation criteria

Once you’ve established the baseline framework, it is time to go back and identify key evaluation metrics to guide your assessment and selection of firms for the panel. The goal of this exercise should be to outline the most important factors for the selection of your outside counsel panel firms.

These metrics and evaluation criteria should align with the objectives set forth above as well as any larger organizational or company-wide goals.

Example evaluation criteria:

  • Competitiveness of rates
  • Jurisdictional coverage
  • Practice area coverage
  • Expertise and bench strength
  • DEI and ESG KPIs

5. Operationalize your panel and work on change management

Once you’ve decided to establish a panel, you’ll need to set a framework or business guidelines for how and when work will be offered to the panel firms. Some questions to ask during this process are:

  • For which matters can the engaging attorney single source a panel firm? For example, you may empower your team to single source matters that are under $20K in expected spend and require a turnaround of 2-3 days.
  • For which matters should the engaging attorney run a matter-level RFP process? For example, you could decide that matters over $50K in expected spend, have unique complexity, or an unfamiliar jurisdiction should go through an RFP.
  • If applicable, how will active or legacy matters be transitioned to new panel members?

Ensure that engaging lawyers are bought into this framework, that it aligns with your panel objectives, and that your internal matter intake systems and processes would enable execution.

6. Run a competitive RFP process for panel selection

Running a competitive RFP Process is a great way to ensure you are getting the best market rates ahead of time to compare and contrast the expertise and additional value adds of your participating firms and make informed decisions that result in better outcomes.

Consider inviting your incumbent firms, industry specialists, diverse-owned firms, and even firms you haven’t worked with before that are eager for opportunities to pitch for your work.

This competitive RFP process can be repeated upon renewal or refresh of the panel at the end of each panel period (for example, every three years).

7. Harness the power of data

Finally, making data and reporting part of your ongoing panel is key to success, operational oversight, and stronger firm relationships.

The in-house teams we work at PERSUIT with often streamline their panel engagements through our platform, creating a central repository for all panel information. This includes:

  • Rates
  • Engagement correspondence
  • Billing guidelines,
  • Expertise
  • Expectations

Whether you use a platform like PERSUIT or not, creating a central database to manage your panel provides a single point of reference for both lawyers and your legal operations team. This repository will also house data about how your panel is being used.

The data you collect can be used to inform internal decisions, quarterly business reviews, and to give data-backed answers any time one of your firms asks how they can win more of your work.

Want a full conversation guide you can use when talking to your partner firms? Check out our guide: 5 Data Benchmarks to Use When Firms Ask: “How Can We Win More of Your Business?”

Laura Spalding

Director, Legal Advisory at PERSUIT