March 2024 - Modern Trends in Outside Counsel and Legal Vendor Management

A common pain point among corporate law departments of all sizes is the management of their often-lengthy roster of various vendors and outside counsel. While modern technology has improved the delivery of legal services overall, several themes continue to be common with respect how legal departments interact with their outside counsel and vendors.

Up until recently, the selection and retention of outside counsel rested entirely with the general counsel and the lawyers within the organization’s legal department. But the emergence of legal operations as a key discipline within corporate law departments today has included those professionals playing an important role in the selection process.

While still relatively new to organizations, legal operations now serves as a critical bridge to procurement, which is also more directly engaged in the affairs of law departments than ever before. These developments have meant more and better processes – more carefully crafted requests for proposals, greater reliance on metrics, use of more formalized retention methods like master service agreements and a greater willingness to “shuffle the deck” in terms of the vendor/outside counsel mix.

While in-house lawyers remain closely allied with their legacy counsel, corporations are more willing than ever to alter the landscape in the elusive quest for the best possible value – specifically, getting the highest-quality legal services for the lowest possible cost. In the past, cost was secondary to obtaining the best possible legal advice or service. But that has changed, in part through the influence of legal operations and procurement professionals. Value is now more equally balanced between the perceived excellence of the advice or service and its cost.

Other best practices have emerged as part of corporations securing real value and better managing their vendors and outside counsel, including setting requirements for diversity and inclusion, changing billing terms and having regular meetings to discuss the performance of the law firm or vendor.

QuisLex’s Joe Polizzotto offers more insight on these themes in the article How to Drive Efficiencies and Savings in Critical Legal Vendor Relationships, published by Today’s General Counsel in October 2023.