The number of Panel RFPs in PERSUIT has doubled year-over-year since 2020.
Is this a larger industry trend? We can’t say.
But we are observing clients create smaller, strategic panels while still harnessing the benefits of matter-level bidding to distribute work.
Traditionally, law firm panels have been purposeful in:
- Converging a large number of retained firms;
- Garnering consistency in billing processes;
- Facilitating stronger relationships; and
- Driving competitive hourly rates.
These goals are important, but forward-thinking legal departments aren’t stopping there.
How are your most strategic in-house peers thinking about their panels?
The data about your panels can look great, but what are you doing on the whole? What’s the context and story around that data? What does it mean?
— Erik Perez, Central Legal Operations Officer, Shell
We increasingly see innovative corporate legal departments taking a more strategic approach to working with their firms and we are often asked to advise on best practices.
Our recommended approach is to move beyond their traditional view of panels to maximize operational value and build strategic partnerships — answering questions around whether their business has changed, if their firms are delivering the expertise they were expecting, and having candid conversations about the company’s objectives and what success really looks like.
Value Beyond Discounted Rates
With the use of generative AI and LLMs on the horizon, it’s important now more than ever that in-house teams are harnessing value from their law firm panels beyond discounted rates.
Because as technology continues to build efficiencies and unlock automation in the delivery of legal services, the value of those services will permanently shift away from time and effort to impact and outcomes.
Here are some examples of how thinking differently about your panels can drive more impact.
1. Strategic Alignment
Are your law firm partners aligned with your company values and helping you execute your business strategy?
2. Risk Management
Having a consistent group of law firms with the experience and expertise in a given panel area allows your organization to hedge against the risk of a shallow bench.
3. Environmental, Social, and Governance (ESG)
Are your law firm partners an extension of your Environmental, Social, and Corporate Governance practices?
Is your relationship with your law firms proactively driving the promotion and development of diverse lawyers and legal professionals?
4. Spend Stewardship
Do your panels encourage and allow your lawyers to become better stewards of outside counsel spend?
And what about outcomes?
You should be thinking about your panels with these three questions in mind.
1. Do you and your panel firms have an outcome-driven approach to spend?
Do your law firm partners work with you to maintain cost predictability and control over legal spend?
Do your Alternative Fee Arrangements (AFAs) appropriately distribute cost risk between you and your firms?
Do your AFAs allow your firms flexibility to leverage their resources to increase efficiencies to maximise profit?
2. Are your law firms uniquely positioned to deliver better legal outcomes?
Investment in specialized expertise — are your law firms investing in knowledge management and specialised legal services?
Value adds — Beyond legal services, law firms can provide value-adds such as Continuing Legal Education (CLE) sessions, secondments, educational opportunities, and regulatory reviews.
Developing these relationships and focusing on a few firms will allow better integration and firms will begin to gain institutional knowledge of your organization and vice versa.
3. Innovation — Are you successfully harnessing the "brain trust" of your panels' most senior partners?
If you have a panel of firms handling 80% of the outside legal work across multiple practice areas, consider the snapshot of your business these firms are establishing.
With insights into your business that go far beyond individual matters, your panel firms are well-placed to provide more proactive, strategic advice to the company on how it can bolster its business and protect its liability in the future.
Innovating in-house teams are looking beyond discounts and matter value to unlock the full potential of their panels.
Building strategic partnerships with a select group of law firms fosters deeper connections, allowing firms to develop institutional knowledge of the organization and deliver tailor-made legal solutions. Partnerships like these promote an environment of collaboration and innovation, where both the organization and its law firm partners work together to proactively improve the business and drive successful outcomes.
Instead of just renegotiating hourly rates with your preferred firm network, consider establishing strategic partnerships with panel firms that offer VALUE in the form of real impact and driving outcomes.
PERSUIT's Panel RFP Templates are tailored to help you execute on this.
Learn more from PERSUIT's Legal Advisory team in our free resources area.