Driving value from your legal panel: key takeaways from our networking lunch
Hosted by Network Rail’s Dan Kayne (General Counsel, Regions), Apperio’s September 2019 Networking Lunch turned the spotlight on the panel review process, and how to ensure efficiencies throughout the panel’s duration.
Having moved from a panel of fifteen firms 10 years ago, to a panel of three following Network Rail’s most recent review earlier this year, Dan Kayne shared his approach to structuring Network Rail’s external provider review process, and the key lessons the team learned along the way.
Build a deeper relationship with your law firms
The legal industry is a people business, and building a genuinely open and transparent relationship with your law firms starts early on in the process.
“We wanted to keep our panel small, because that way we knew we could build a true long-term partnership with our outside counsel. When we had 15 firms, we couldn’t manage them all. We’re also seeing this trend across the industry, that panels are reducing in size. I believe this is because having a smaller number of firms allows you to have a deeper relationship, built on a genuinely open and transparent arrangement, which includes visibility of spend.” says Kayne.
And for Network Rail, the event that kicked off their panel review process was the market engagement day organised early on in the process, which saw law firms and alternative providers alike attending: “We told them what our plans were for how we wanted the service to be delivered and we took feedback from them in return. It provided a chance to discuss two-way transparency, and to also discuss how we can work with suppliers to reach their financial targets, while they work with us to help achieve our goals and cooperate with us on systems and processes we wish to have implemented.”
Seek diversity in your panel review team
Diversity in your panel review team isn’t just about ticking a box. It’s a smart business decision that puts together multiple stakeholders who see the world differently, allowing you to generate better ideas.
While the procurement team’s involvement may be critical in the supplier selection process, relying solely on the most common evaluation methods and criteria when selecting your outside counsel may not be the way forward.
When creating your panel review team - and you do need one in order to drive a sensible panel process - bringing people in who aren’t from a legal background can pay off immensely in the long haul.
“We brought in a Head of Legal Operations through the process. Having someone from a non-legal background has helped ease some of the pain points of the panel review process. It has also made a big difference in making sure we don’t get stuck in a one track way of doing things, or doing things because that’s the way we’ve always done them,” says Dan Kayne.
Leverage your data
Data is a hugely valuable resource, and now more than ever this is true in both the panel review and spend tracking processes.
“Previously, we had to be told by the law firms what our spend was. That put us in a really weak position when going to firms, since we couldn’t provide a clear idea of scope and what it is we’re looking for. So, we did the work on the data and as a result were able to confidently say exactly what our spend was over the last 3 years in different parts of the country for different work types. This helped firms understand what’s in it for them and where they have to allocate resources to fit our needs”.
Having a tracking system in place also puts General Counsels in a better position to collaborate with their Finance Directors, who can use the data as part of their toolkit. This, in turn, can give your FD comfort in knowing what your team is spending and how you’re dealing with your supply chain.
It doesn’t end with the review process
Monitoring your panel’s performance is an ongoing process which requires regular engagement with both your internal and external stakeholders.
“Governance is extremely important, and we have quarterly meetings with our panel firms, which allows us to include them in our strategic approach. Getting good information from firms means we’re able to drive a more ambitious set of work streams going forward. The output from the quarterly meetings then feeds into our partnership steering group, which consists of all our law firm partners. At these meetings, we tell them how much we’ve spent on matters, how they’re performing against the KPIs we’ve set, and how we can help them improve - but more importantly, what is being done to take waste out of the system.” says Kayne.
“Every quarter we also sit down with our Financial Directors to look at our existing spend and what we’re working on. This way, we get feedback every quarter and have a clearer idea of how we are performing and where we need to improve. If you have certainty on your budget, your FDs can demonstrate to the shareholders that they’re deploying capital the right way.”