External Resources Management

EARLY

• Majority of outsourced work directed to law firms
• Law firms at arm’s length from in-house law department; relationships may be somewhat untrusting
• Law firms selected and managed by frontline counsel
• Ad hoc engagement and billing terms; billing generally on hourly rates; limited invoice review and analytics.

INTERMEDIATE

• Some consideration or use of legal process outsourcing vendors or alternative legal service providers (LSPs)
• Concerted effort to improve collaboration with law firms and LSPs (e.g., through feedback, conferences, joint process improvement efforts)
• Vendor consolidation underway; some use of preferred providers to gain leverage and improve operational efficiency
• Resources dedicated to managing supplier relationships (often under Legal Operations)
• Billing guidelines incorporated into e-billing/matter management systems and enforced through invoice review
• Some/limited use of alternative fee arrangements (AFAs); learning what types of work and how to implement them successfully
• Defining key performance indicators and developing a dashboard to track metrics, including cost-effectiveness of external resources
• Some informal or ad hoc law firm/supplier evaluation
• Legal recognizes the business case for diversity and inclusion (D&I) and begins to measure and implement programs to improve law firm D&I.

ADVANCED

• Right-sourcing an ongoing consideration and LPOs/LSPs often integrated into legal services delivery model; well-established preferred counsel model
• Suppliers considered value-producing business partners; systematic use of value-adds (e.g. training, secondments) and value-enabling capabilities such as project management and technology
• Outside counsel and vendor management centralized, dedicated function(s) with involvement in RFPs, engagements, pricing, and performance reviews to drive continuous process improvement and innovation; governance includes disciplined policy, exceptions, conflicts, and data security management
• AFAs well-understood and utilized according to established principles; systems smoothly incorporate/support AFAs in billing and metrics/dashboards; procedures exist to assess value and reconcile pricing to cost/scope variances
• Data-based decision-making in counsel selection/evaluation/pricing (e.g. outcomes are considered in law firm selection)
• Legal, Procurement, and Finance fully aligned and well-integrated with respect to supplier selection/management and spend management processes
• Standardized supplier quality/performance metrics; regular, structured, and mutual feedback
• Diverse suppliers proactively identified and metrics used to encourage D&I in staffing matters.

A Data-Driven Look at DEI in Legal Departments
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Attorney Onboarding Best Practices
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Advancing DEI Strategy with Actionable Law Firm Diversity Data: An In-house Legal Resource
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Diversity Practices Questionnaire for Vendors
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Guide to Value Based Fees
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Law firm Innovation Capabilities Questionnaire
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Outside Counsel Guidelines Template
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Sample Outside Counsel Guidelines
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Top Metrics
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Accelerating your Law Department’s DEI Journey
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Attorney Satisfaction Template
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Budgeting Recommendations
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Fostering Collaboration: Building Strong Relationships Between Corporate In-House Legal Departments and Outside Counsel
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RFP Guidelines
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The State of Collaboration in Corporate Legal Departments
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