Reshaping relationships – the future value proposition
At this year’s National Conference, the panel “Reshaping External Counsel Relationships – Defining the Shape of the Future Value Proposition” facilitated by ACC President Anna Young showcased how the value of legal spend can be maximised through reshaping relationships and collaboration.
The panel consisted of Anna Golovsky, Executive Manager, Legal and Company Secretariat Operations, IAG, Joanne Rees, Founder and CEO of AllyOne, Sam Nickless, CEO of Gilbert and Tobin and Zaheed Evans, Senior Legal Director - Commercial International, APAC WEX Inc
The discussion revolved around leveraging technology, rethinking traditional billing models, and enhancing the strategic partnership between in-house legal teams and external counsel. Here are the top 5 takeaways that emerged from the session.
1. Demand greater transparency and trust
Joanne Rees stated, “the issue is not billable hours – the issue is trust.” Joanne started work before the billable hour was the norm and witnessed an erosion of trust. Over time, clients no longer trusted that only the necessary work was being done or that the right resources were being applied to their projects, and law firms had lost their ability to demonstrate transparency and accountability.
General Counsels can regain control and restore trust by using tools and systems that ensure transparency and accountability. The four tools that can help rebuild this trust are:
- Project Management Approach: Treat legal work as a project with clear goals and outcomes. Collaborating with law firms to define what needs to be done when, helps ensure the right resources are applied to the right tasks.
- Resourcing Focus: Legal teams can adopt a disaggregated/blended resourcing model, using a mix of contract paralegals, lawyers, and other support resources to ensure that the work is being done by the right people at the right time, rather than relying on a complete external team.
- Technology Solutions: There are various tech solutions available to support procurement, legal project management, and invoice review. AllyOne is unique in the way that it automates the invoice approval process, reducing the need for manual approval and making the process more efficient.
- Data Analytics: Utilising data analytics can help track spending, measure efficiency, and benchmark performance. This allows for greater understanding and control of legal expenditures, moving away from outdated manual processes, like using multiple spreadsheets to track costs.
2. Establish a value framework
Zaheed Evans outlined a value framework focused on understanding and defining value from the perspective of various stakeholders within an organisation. He stressed that value would look different depending on the specific stakeholder. The framework emphasises the importance of sitting down with various stakeholders to co-create a definition of value that aligns with their strategic priorities.
The core idea is that in-house counsel should proactively meet with law firms to align on what value means for their business, then set measurable outcomes and timelines to assess whether that value has been delivered. This approach fosters a deeper, more strategic partnership between in-house and external counsel, ensuring that both sides are aligned in terms of objectives, communication, and expected outcomes.
One of the first actions Zaheed took to implement a value framework was to engage with relationship partners from his legal panel to communicate pain points and priorities, and then turn those insights into actionable strategies for delivering value. Zaheed advocates for clear communication between in-house teams and external partners, ensuring that value is not just defined but measurable. This can be done by setting short-term and long-term goals for what value looks like, with specific milestones to check progress over time.
3. The “Uber” approach to legal spend
Sam Nickless shared an interesting analogy comparing legal spend approaches to the taxi meter versus an Uber fixed fee. Traditionally, legal work was like the taxi model—unpredictable and based on rough estimates, with the final cost often unclear until the job was done. In contrast, Uber allows users to select their service level (e.g., Premier, Comfort) and receive a fixed price, based on real-time demand and supply. This model mirrors an ideal legal value environment: clients want fixed-fee services with the ability to negotiate an adjusted scope as needed, avoiding the uncertainties of hourly billing. By reducing transaction costs and standardising processes, legal firms can create more predictable and efficient pricing structures, benefiting both clients and firms by eliminating wasted costs and improving the value of legal spend. And you can track your little black car every step of the way.
4. Use data-driven insights to drive performance
Anna Golovsky outlined the importance of using data and metrics to support the value of in-house legal teams. She implemented a matter management tool to track internal team activities, not for traditional time recording but to measure how much time is spent on complex, strategic work, and how automation is being leveraged for self-service and no-touch legal services. She emphasised the need to continuously monitor and measure the value delivered by the in-house team to demonstrate the return on investment (ROI) for tools like matter management systems. Anna highlighted a significant cost saving of around 8-8.5% annually in external legal spend through these tools, with ROI on the program exceeding 1000%.
Anna acknowledged that implementing these changes wasn’t simple. It took six years to roll out and required continuous engagement with stakeholders. The key advice is to start small, test concepts, and continuously iterate, ensuring that value is demonstrated early, and adjustments are made as needed.
5. Overcoming change fatigue with bite size projects
Whilst the changes and results from IAG centralised legal spend evolved over six years and was very significant change, Joanne Rees commented that smaller organisations can adapt more quickly and implement changes in smaller, manageable steps.
The advice is to "do something" rather than wait for perfection—starting with small pilots or tasks can be effective for making progress. Additionally, when it comes to budgeting for new solutions, one challenge is the difficulty of securing capital expenditures (CapEx) approval. However, some legal tech solutions such as AllyOne allow their fees to be paid as disbursements on law firm invoices, making it easier for organisations to manage costs without needing to go through the typical budgetary hurdles. The message is to remain open-minded, as practical solutions to these challenges do exist.
For those interested in learning more about how to enhance the value of your legal spend, visit https://allyone.com.au