How to meet a moving target
2 July 1995
Jane Ahrends on the steps some law firms are taking to make arranging travel both easier and cheaper
Law firms are paying increasing attention to their travel arrangements. In the process they are scrutinising their own internal organisation as well as the agents they use.
While some opt to have secretaries place bookings among a handful of favoured agencies, others have cut agency providers down to one or two and devolved responsibility for all bookings to one person in the firm.
In the City the picture is varied. At Slaughter and May, for example, two or three agents are used. But the firm regularly considers switching to a single provider.
"It comes up for consideration by the finance department every 18 months," says personnel partner Melvyn Hughes, "But it has never been thought to be justified as against the convenience of allowing people the relative freedom to use the agents they feel give them the best service."
Allen & Overy, Nabarro Nathanson and Norton Rose, on the other hand, each use one agency either as a primary or sole provider.
"Assuming you are getting a proper service at the right cost, the advantages of using one rather than two providers is that you are a doubly important customer", says Allen & Overy managing partner John Rink.
For Norton Rose, the arrangement it set up two and a half years ago with American Express, "is as exclusive as it is possible to be in a partnership," says partner Patrick Stone.
On top of the discounts which American Express offers generally, Stone says the firm gets a bulk discount of about four per cent on its annual bill.
At McKenna & Co, company secretary Vera Farrants is happy to have a primary provider: "The agency is able to track what you are doing."
At Lovell White Durrant the travel issue is up for review. Currently the firm has accounts with three or four agencies, the bulk of the bookings being placed by secretaries with one of those. The firm expects to cut its providers to two, with one agency receiving most of the business.
Joint managing partner Michael Maunsell expects to get a volume discount from any new deal but argues the biggest savings are to be found in creative ticketing arrangements. "The agencies will have a clear understanding of our travel patterns which will help them to be innovative in suggesting cost-effective routing and ticketing arrangements," he says.
The review will also look at internal arrangements: "We may be looking at somebody providing a co-ordinating role to make sure that where savings are possible, someone did not rule them out," says Maunsell.
Barry Mayo, facilities manager at Linklaters & Paines, says centralising responsibility for bookings in the firm has clear advantages: "Centrally you can impose policy better. People are not used to dealing with flights and so don't necessarily think about whether there is a way of getting a cheaper flight or how to process refunds."
Mayo's firm operates an in-plant arrangement under which two Hogg Robinson staff run a mini-travel agency from the firm's office. The staff, whose screens are connected to airline booking systems, remain on the agency's payroll but the full cost of employing them - and the commission they earn - are split 50:50 between the law firm and the agency. The arrangement has been running for two years and, Mayo says, is a profitable one.
"The commission offsets the cost to us of providing the office space and of providing the service to the client. We can, at the drop of a hat, get somebody here, there or anywhere. The inplants can change a client's booking while he is here in a meeting. A lot of clients benefit from that."
Before the arrangement was set up two years ago Mayo had two Linklaters staff organising the firm's travel. It would, he says, be impossible to keep his own staff as clued up on the business as Hogg Robinson staff are able to be. "Hogg Robinson is continually fed by a specialist division with information on what deals are available. He adds: "The employed staff spent time dealing internally with partners, they would then phone Hogg Robinson who would contact the airlines. Time is money."
With the in-plant arrangement, Mayo says: "Fee earners with a complicated schedule can come down to our travel office, talk to trained personnel, look at the availability of flights on the screen, see all the options and then, if they want to, book it there and then."
Linklaters - which has an annual travel spend of over u1 million - is not the only City firm running an in-plant arrangement. And at least one City firm is due to look at whether its business will justify the overhead costs of introducing the idea.
Herbert Smith has one in-plant - from Gray Dawes - but the arrangement differs from the Linklaters scheme. The firm pays an annual fee to the agency, to cover the cost of the in-plant, which is then, on the basis of annual negotiations, discounted according to the volume of travel. The scheme, says facilities manager Phil Page, breaks even.
Opinions differ on the need for tight written policies on travel arrangements for journeys on the firm's, rather than the client's behalf. While some firms are happy to rely on broad understandings or guidelines, more are tightening up written policies which dictate, for example, which class of travel is to be used for which journeys.
Firms agree that on client business the class of travel is regulated by clients' demands. And clients' rules on the issue are increasingly detailed, according to some. "We have an inflexible rule that you do whatever the client tells you," says Warner Cranston partner Ian Fagelson. "Some clients say they want their lawyers travelling in reasonable comfort and stipulate club or even, on longer flights, first class. Others say everybody travels in the back of the bus." The different approaches, he adds, are unrelated to the client's size.
Vera Farrants at McKenna & Co issued a tightened-up written policy to the firm's preferred agent nine months ago. For her the move was an important one. Real monitoring of the firm's policy can be done, she says, since the agent has the policy to hand.
Jane Ahrends is a freelance journalist.