18 July 2011 | By Laura Manning
Healthcare specialist Bupa’s general counsel Paul Newton is keeping the pressure on his panel firms.
For general counsel Paul Newton, maintaining competitive tension in the legal panel is key to Bupa’s success. That’s why he has been busy drawing up plans for a benchmarking exercise looking at spend on its top ten advisers to ensure healthy rivalry and to push for improvements where necessary.
“We want to see how their performance sits in relation to other firms, to make them aware of how they’re doing relative to each other, influence improvement in areas where there are weaknesses and encourage them where they’re strong,” explains Newton.
As a result, the private healthcare company, shortlisted for In-house Commerce and Industry Team of the Year at this year’s The Lawyer Awards for streamlining its legal functions, intends to introduce stringent measures when it starts reviewing panels in 2012, asking tough questions on billing incentives and controls to “get under the skin of firms”, according to Newton, and ensure the cost of projects is aligned to value and to budget control issues.
Newton believes it is not in law firms’ DNA to keep costs to a minimum, so by ensuring competitive tension through creating a benchmark on value for money he believes the legal team can condition expectations for firms that may wish to do work with the company in future.
“[The panel review] won’t be a revolution; we’re not going to throw all the cards in the air,” stresses Newton. “We want to develop panels through an evolutionary process, which means we’ll be demanding more from existing firms, not necessarily in terms of fee rates but more their commitment to controlling costs in relation to individual projects and transactions. Where necessary we’ll be dropping firms and equally, adding some.”
When The Lawyer last spoke to Newton in 2008 he was completing the task of creating the company’s first-ever legal panel. In the past three years his team has added to panels, which include litigation, M&A, employment, IT procurement and media, achieving savings of up to 50 per cent in some cases. It is establishing an insurance regulatory panel and hopes to complete a property panel soon.
Despite cost management continuing to be a priority for Newton due to what he describes as “increasing pressure to achieve excellence in this area”, he emphasises that ensuring successful working relationships with panel firms is just as important.
“We don’t see our law firms as simply suppliers - we’re not dealing in paper clips - but as part of our talent pool,” he says. “We act in partnership with them. When the firms we select realise there’s a strong relationship in place they’re more likely to invest in that by getting a better understanding of the company.”
His aim for the next year is to push panel firms to deliver more than just legal advice. He wants them to develop creative solutions and play a greater role in managing legal risk.
Internally, legal risk management is also a priority, forcing the legal team to place itself closer to the action in the rest of the company by shifting roles from being just legal advisers to legal risk managers too.
Newton has also identified a growing need for his team to have business and leadership skills to ensure they are clued-up on the company. It is for this reason that he sees holding on to talented lawyers as one of his challenges, due to the tendency for lawyers to see their careers in management following the increase in their non-legal responsibilities.
As attracting and retaining good lawyers has been a strong focus, the team has developed the Legal Leadership Academy (LLA), a talent review process and a mentoring programme to help make the legal function integral to Bupa’s decision-making process and overall company strategy.
The LLA is designed to track talent across the whole legal community, which now boasts around 80 members globally, as well as helping lawyers develop business, risk management and leadership skills.
Managing a team spread around the world brings challenges for Newton, and despite him saying there is “a great sense of teamwork” established largely through a virtual community that allows legal departments to function as a single team, he feels there is still work to be done to ensure the team is subject to the same stringent performance measures throughout.
“We’ve set our sights as a legal team on being world class; making sure that what we do is aligned to what
the business needs from us,” he concludes.