In-house lawyers: Are scorecards the answer for law firm collaboration?

In-house lawyers have put collaboration, communication and clarification with partner firms at the top of their to-do list.

At an early morning roundtable in London The Lawyer, in conjunction with HighQ, gathered with a number of prominent figures in legal operations to discuss the big trends and how the relationship between businesses and firms has evolved.

“We speak to a lot of law firms and I see big differences in their approach to digital transformation and maturity levels with regard to new legal delivery models,” HighQ chief product & strategy officer Stuart Barr says.

“Some of them are absolutely stuck in their ways of decades ago. But, I really do think that others are trying to change. There is a resolve now to drive real transformation and deliver legal services in new ways. I’ve seen a big change in the last eighteen months to two years. I really have seen it.”

Chaired by Barr, National Grid global head of legal operations Mo Ajaz and The Lawyer editor Catrin Griffiths, the table opened up about how they’re working to develop these relationships, discuss strategy and attempt to get closer to that elusive question: how do we get more from our firms for less?

“We don’t want our law firms to be just that, we want them to be solution providers,” says Barclays head of legal external engagement Stephanie Hamon. “They tend to forget that when, actually, I have a business question and have a business problem. I want a solution and I want one point of contact for that solution.”

Hamon summarised many of the gripes held by GCs, legal heads and legal operations teams the world over.

Do scorecards breed clarity?

Ajaz’s introduction of scorecards into National Grid’s legal function enabled the energy company to breed a culture of clarity to its panel firms. It helped to breed transparency of expectations in an objective and measurable way – and also proved to be one of the major talking points of the day.

The room was evenly split between those who strongly believed that scorecards were an effective way of breeding transparency in the relationship. It wasn’t a universally-held belief, but indicated that more and more in-housers were considering this.

“We all say that we don’t need metrics as lawyers because we’re all busy that we just don’t have time for them,” says Serco Group group deputy general counsel Paul Boyle.

“But I think, unless you’ve got the metrics to prove that objectively, how are you going to prove it with evidence?”

However, Babcock International Group land sector general counsel Meng Liang wasn’t entirely convinced by the effectiveness of the scorecard system. She argues that it may not be as universally beneficial as it may seem.

“There is more than one way of measuring and managing performance depending on the business context,” Liang says. “The scorecard is one way that may not be fit for purpose for every in-house legal department and their relationships with main service providers.”

American Express counsel and director of legal operations Andrew Brereton saw the benefits of the scorecard, but is tentative in his adoption of the system.

“Scorecards, trackers and data-driven initiatives don’t hold all the answers,” says Brereton. “But they provide opportunity to create more informed strategies and decision-making processes.”

They certainly have their place, but it may be a while until they are omnipresent in legal departments of major companies.

Fostering collaboration between firms

With increasingly tightened budgets, businesses are looking to foster an atmosphere of collaboration between their panel firms.

Open lines of communication are one of the most effective ways of building this and that means honesty coming from both sides of the relationship. There’s one important question to ask in this case: Is your firm a partner in this or a supplier?

“Our point to our external lawyers is that we don’t mind you being a millionaire, as long as we’re paying the right price,” says Hamon. “If you can help me demonstrate value and that what we’re demonstrating is at the right price, right value and right margin, then that’s the best scenario. We want the best lawyers working for us, but there’s a lack of trust originating from a lack of clarity.”

The conversation then turned to setting expectations and defining precisely what this means for in-house lawyers.

“I usually ask my lawyers first what they want to get out of it before I tell them what I want,” says Fleetcor Europe head of legal & VP Natalie Salunke. “That way, they know what they’re really offering and want they want to do. Then you can ask whether that works for you financially. If it doesn’t, do you really want the business that much or are you happy for me to take it elsewhere? It’s a big enough marketplace for you to find the player for the game you want to play.”

Quality and quantity

It isn’t breaking any new ground to suggest that firms want to be doing the high-level and high-value work.

“It doesn’t matter if you’re working with a small firm that has limited service coverage”, says Ajaz. “They’re always looking to improve their position on the panel by suggesting how they could add further the value in different areas. It’s the role of the in-house team to be clear about the opportunities that the law firms have and buying effectively.”

Firms are looking to get at that level of work, but it isn’t always what’s needed. Sometimes, it’s the opposite.

“You need to have the cognisance to say what you want from your firms,” says Boyle. “Some of the big magic circle firms will do the commoditised work if they realise that’s the investment they need to make so can have the conversation with the firm.”

It is possible to get exactly what you want from a relationship, but the communication has to be clear and exact. This is what drives success and both sides need to accept this from the first interaction.