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CCCA62_034-38.qxd:CCCA_V1No1_DriversSeat-FIN.qxd 09/14/2007 03:19 PM Page 36 Feature years ago,” she says.“We feel that the relationships are priceless, Convergence Tips because they are true partnerships.” In part, these relationships work because both sides share the point of view that if you are going to put your eggs in only a Here’s what our experts say you should think about if you few baskets, you had better have a very good arrangement with want to implement convergence, or simply do a better those baskets. job of it. Accordingly, Marriott’s outside legal firms generally designate one or two “relationship persons,” either a managing partner or Concentrate your buying power: “You have to decide how someone designated by them. “They’re kind of the gatekeeper. much work you are going to throw at how few firms before They are in charge of the people that the firm brings in on you get the concessions you want,” says Catalyst Marriott matters,” says Miller, who is the relationship person on Consulting’s Richard Stock. the company’s side.“They know we want their best and bright- “Look at it this way: if you are building a car with 37,000 est on our work. It’s up to their relationship person to deliver the parts in 37,000 places, it’s definitely going to cost you people fitting that description.” more than if you buy them all at one place. You have to concentrate your buying power. And you have to do it The European model strategically —– you can’t trade service and results for Although Europe jumped on the convergence bandwagon short- price. Service, delivery and results are always more ly after North America did (the select firms are called “panels” important than saving money.” there), the consensus is that they are a little behind in both focus on internalizing work and on management of outside firms. Try to get away from the hourly rate: “ I know companies “That’s partly because companies over there have traditionally that have said to their outside law firms: ‘This is what we been smaller and don’t have a lot of in-house lawyers,” says spent last year and we want to spend 30% less, and if you Catalyst Consulting’s Richard Stock in Toronto. “But also, it’s are interested, let us know,’” says James Wilber of con- because now there are global companies operating everywhere sultancy Altman Weil. and they bring other values to the table.” “Accordingly, these companies’ initial agreements The United Kingdom got off to a bit of a rocky start,says Alan were for significantly less money, but now they are reliant Hodgart, London-based principal of global consulting firm on these firms. And as the law firms raise their rates Kerma Partners. To set up the panels, a lot of corporations slowly and inevitably, the organizations feel stuck with brought in their procurement people — after all, convergence is very few providers that know their business, so they are simply a form of strategic procurement — who understood cut- now probably paying more than they have to,” he says. ting costs, but not necessarily the professional side. “The lesson here is that it’s not just the convergence “Some of the big banks constructed the panels through a com- that’s important. The key is to combine it with pricing and puterized bidding process with the lowest bidder winning,which getting away from hourly as much as possible.” resulted in unsuitable firms doing big transactions,” says Hodgart. “That didn’t work, so they brought some of their big firms back Leverage business: “Use convergence to generate busi- in,which meant they couldn’t use their panels to do some of their ness,” says Donna Miller at Marriott. “Law firms have a most important work.” lot of big meetings and we expect them to have the meet- Of course, with the corporations becoming more selective, the ings at Marriott hotels. Last year, our law firms brought us law firms have to decide which panels they want to be on and $7 million in business. That’s another benefit of having a then put their case forward.This is forcing law firms to become partner firm.” more specialized,or at least to look at the areas for which they are best suited, so that they can focus and draw on that expertise. Get buy-in across the organization: “The absolute first thing you have to have [if you are going to converge] is Tried and true buy-in from everyone at all levels, so that you are not Turning your traditional outsourcing arrangements head over making this decision in isolation,” says RBC’s Murray heels can involve a leap of faith,too. “Convergence can be a scary Aust. “It’s a bit like stop signs — you can’t enforce them change for both inside counsel and outside lawyers,” says James at every corner. People need to stop at them because Wilber,principal of AltmanWeil,a Pennsylvania-based consulting they think it’s the right thing to do.” firm. “So you start with firms you already know you want to continue to work with, and who are interested in working with 36 CCCA Canadian Corporate Counsel Association FALL 2007