Canadian Lawyer

20 M A R C H 2 0 1 7 w w w . C A N A D I A N L a w y e r m a g . c o m aw firms are seeing companies take an increasingly sophisticated approach in the way they procure and engage legal services. And many of the larger corpo- rations are using requests for proposals to create panels of law firms to consolidate the number of firms with which they are working. The use of RFPs can be traced back to the 2008 economic crunch when the corporations closely re-examined their expenditures, deciding that they could do things differently when it came to their legal spend. Procurement depart- ments have since become involved in the increasingly detailed process. "Both law firms and clients are under- going an evolutionary journey," says Larry Chung, director of practice management and innovation group with Osler Hoskin & Harcourt LLP. Five years ago, he says, companies would ask what alternate-fee arrangement the firm had available; now, they'll ask for specific alternatives, such as a cap fees. Osler has responded to this growing trend with its own investment in knowl- edge management lawyers and pricing and project managers. "The purpose of this investment is to put forward to our clients a solution where it's reflective of their busi- ness, the industry they operate in, insight into their legal issues and legal problems and a pricing model they find appropriate," says Blake Inkster, Osler's director of pur- suits and market recognition. Companies now host pre-RFP work- shops or put out requests for information prior to issuing an RFP and ask law firms to describe their capabilities and areas of expertise, what value-added services they'll make available and of what their legal proj- ect management and alternate-fee arrange- ments consist. The information they get back may serve as a minimum threshold of what they expect from their panel. Shell Oil Corporation has been saving more than $20 million globally every year since adopting and continually tweaking its program using RFPs to create panels of lawyers with whom they want to work, says Vincent J. Cordo, Jr., its global sourcing offi- cer. Shell used an auction process last spring to determine which firms to include on its panel, with the intent of developing better relationships with the chosen ones. Its approach includes using performance measurement tools from which internal reports are generated about the firms that are used. "Without this type of assessment, it's possible to overspend or over-resource certain matters and also to look at differ- ent firms to ensure you're getting the best value for your spend," says Cordo. "We have condensed lists so we can guarantee more volume to firms because they're investing in us" by providing training, credits, discounts and other value-added initiatives. Shell has also started a quarterly busi- ness review reporting process to examine the performance of the law firms that gen- L AW O F F I C E M A N A G E M E N T By Marg. Bruineman PAUL HOWALT Requests for proposals The RFP process has become more sophisticated and complex, but law firms still have to play ball to get on the preferred panel list L

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