“You just slip out the back, Jack
Get a new plan, Stan
No need to be coy, Roy
Just set yourself free”
Businesses can be surprisingly apathetic when changing their external lawyers. Research shows this to be the case particularly with smaller organisations. So unless the GC changes, a favoured partner goes to another firm or the supplier in question drops the ball on a major piece of work; the likelihood is that a business’s legal suppliers will not change. Even in panel procurement exercises, a legal supplier has to be pretty insensitive to a client’s needs to get dumped.
Why is this case? After all, businesses are frequently shopping around to manage their supplier base. Regularly reviewing suppliers is a classic way of keeping your own business supple, successfully managing cost and ensuring best practice and technological development. So why are in-house lawyers reluctant to shake the supply chain and see what falls out?
Here are some ideas. When you are considering your legal services suppliers, do any of these thoughts cross your mind?
It’s all too difficult: apathy is a great obstacle to change. However many obstacles are removed, the effort required to make changes can be too great when a GC is overwhelmed with other things such as legal work (Note to self: by shaking things up you could release some of the pressure on you).
It’s not the done thing: Legal services supply is still stuck in the mid twentieth century. Some lawyers still think that cost equals quality. It is not a surprise that the market is slow to change. 95% of in-house lawyers were educated in private practice. We buy in the way we were taught to sell. Questioning the service is neither vulgar nor unprofessional.
Loyalty: 20 years of faithful service does count for something, but it is not the “be all” when deciding to retain a supplier. People move on, your supplier’s organization may have changed their shape and priorities. Did you notice? Do their current priorities align with yours? Are they trading on your loyalty?
They give us great service: How do you know? If you are not active in the market place talking to potential new suppliers and other in-house lawyers, how do you know what “great” looks like?
They understand our business: This is a powerful reason to retain your existing suppliers. It is also a powerful excuse not to change. The upheaval of change and educating new people to your business can be a refreshing and rewarding experience. You must be careful not to overweight this factor.
Stockholm Syndrome; Wow! Could it be the case that you are now a hostage of your legal supplier? Do you like them even though they dictate all the terms? True they have all those documents and files of yours, but the only thing that is keeping you hostage is you.
It is important to regularly review your supplier arrangements. Inertia is not a business tool nor is apathy a business driver. You may find out that you do have the right legal suppliers. If you don’t ask the questions, you will never know. You may find hidden gems that you did not know existed.
Next week, in the second half of this blog, we will look at how you end a legal supplier arrangement.
 Thanks to David Dresser, a fellow legal services consultant, for this wonderful analogy.