Page 7 - CCCA Magazine Summer 2015

{ PerForMance in the Law DePartMent }

the pricing enigma the negotiations and supports ongoing skills, focus, scope, impact and results in
Danny Ertel is a partner with Vantage Part- business relationships with signifcant the feld of buying legal services. He out-
ners. His article, “What’s (Much) Better corporate and institutional clients. He lines problems with the quality of RFPs,
than a Discount?”, argues that having a dis- observes that too many law frms tend to an overreliance on technology to support
ciplined counsel selection process in place keep their business professionals in the informed decision-making when sourc-
makes requests for discounts more credible. back offce when negotiating service and ing legal services, insuffcient support by
Otherwise, the trusted advisor relation- fee agreements with their best clients. I members of the law department for disci-
ship can be eroded. Ultimately, discounted can certainly think of meetings with law plined sourcing, and a fragmented market-
hourly fees are a losing proposition. Rather frms when pricing negotiations, especial- place both nationally and internationally.
than hourly based pricing, Ertel advocates ly those that included AFAs, were much Overall, the list of challenges is daunting,
portfolio pricing—something that depends more effcient and produced better results but his article is a good primer for legal
on collaborative discussion with the law all around because the law frms’ fnancial sourcing professionals wanting to make a
frm and clarity about the type and amount experts were at the table. strategic rather than tactical contribution.
of work needed. Most law departments are still poorly Dr. Hodges Silverstein’s handbook re-
Law frms are careful to limit the informed about the details of alternative fects the rapidly changing relationship
amount of fnancial risk they take on when fee arrangements and legal project man- between law frms and their best clients.
they move away from hourly based pricing. agement. They are not adept at fee negotia- Canadian GCs should read it and quickly
A good start is to have detailed historical tions, partly because they believe such talk adopt a more cost-effective, strategic ap-
data on hand. Procurement should be able will sour professional relationships and proach when managing this aspect of
to provide this. Just as important, shared partly because all they know is discounted their business. ❚
planning assumptions about scope of hourly billing. Law frm pricing profession-
work, expertise and staffng patterns, and als and corporate procurement specialists
cost management will improve the value should present advanced-level seminars to Richard G. Stock, M.A., FCIS,
CMC, is a partner with Catalyst
equation in the business relationship with law departments and law frm partners on Consulting. The frm has been
preferred frms. The quest for effciency strategic sourcing of legal services. designated the Preferred
and effectiveness will end successfully Provider for Legal Department
when expectations are explicit and shared. Successful Sourcing Consulting by the CCCA for the
A discounted hourly rate is one step for- In his article, Jason Winmill, Managing past 19 years. Richard can be
contacted at 416-367-4447 or
ward and two steps back. The best legal Partner of Argopoint, suggests that there rstock@catalystlegal.com.
procurement professionals understand the is a signifcant diversity in the approaches,
Benefts of Partnering,” describes how this “ Te best legal procurement professionals
trade-offs and embrace strategic sourcing
as their preferred approach.
Over the last three years, a few Cana-
dian law frms and quite a few U.S. law
frms have been hiring pricing and legal
project professionals. Steven Manton is
understand the trade-ofs and embrace strategic
the Strategic Pricing Leader with De-
sourcing as their preferred approach.
bevoise & Plimpton LLP in New York. His
article, “Procurement and Pricing: The

new breed of pricing specialists simplifes ”

CAnADiAn COrPOrAtE COunSEl ASSOCiAtiOn | CCCA-ACCJE.OrG 7