4 Ways Legal Ops and Vendor Partnerships Benefit Both Parties
All relationships require work, and the business relationship between legal ops teams and their vendors is no exception. Unfortunately, legal ops teams often rely on a single, pre-existing connection between the in-house team and an attorney from an outside firm. While personal recommendations are a great start, even existing relationships need to be nurtured.
All too often, in-house teams avoid treating vendors as business partners. Outside firms are considered a separate entity — you have work, and vendors wait around to get it.
But this line of thinking sets both parties up to fail. Without healthy partnerships, work and budget decisions are reactionary. Treating vendors like partners allows you to plan ahead.
Partnerships between legal ops and outside counsel set expectations for a healthy working relationship and allow everyone to focus on high-value work. When you start viewing vendors as your business partners, everyone benefits in four key ways.
1. More Predictable Spending
Long-term relationships encourage both legal ops and outside counsel to establish set spending amounts for ongoing work. If vendors don’t know how much work to expect or when, they’ll default to billing by the hour. Not only is hourly billing unpredictable, but it also incentivizes inefficiency by allowing law firms to dictate the amount of time they dedicate to each matter.
Partnerships, on the other hand, favor predictability. Long-term relationships can lead to alternative fee arrangements (AFAs) that establish fixed total costs, flat fees for specific tasks, volume discounts, and other stable pricing models.
Vendors want predictability as much as you do and tend to be open to arrangements that provide them with a set amount of work. For example, “our team can guarantee your firm $X spend per quarter if you agree with Y terms.”
Not sure how to initiate those conversations? Take a look at tips from our CEO and co-founder, Nathan Wenzel: How to Get Legal Spend Predictability in 90 Seconds.
Keep in mind that partnerships have a positive domino effect. They lead to a better understanding of the business requirements, which leads to more opportunities to review past work completed, which can lead to better fee agreements. Long-term business partnerships give both sides the opportunity to create mutually beneficial agreements that provide predictability for everyone.
2. Work Stability for Vendors and Legal Ops Teams
When you know which firms you’ll be working with on an ongoing basis, it’s easier for both the vendors and your team to predict workloads.
Partnerships lead to go-to teams — also called preferred panels — of experts in particular matters. For instance, your team can designate a preferred panel to handle 75% of your patent prosecution work. With that kind of partnership, your team can feel confident that quality work will get done, and the preferred vendor is guaranteed a certain workload.
Long-term relationships are all about savings — but that savings can come in the form of jobs as well. When firms and legal ops know how much work to expect for certain matters, both teams know how many employees to keep on staff. Stable work (and the data to back it up) can literally save jobs.
To find that data, consider running legal analytics reports, such as:
- Overall spend by practice area and business unit
- Staff productivity
- Work by timekeeper classification level
In the above example, the overall spend by practice area can show you which areas could benefit from a preferred panel. The staff productivity and work by timekeeper classification-level reports will help you determine which firms and specific attorneys should be considered for that panel.
3. Opportunity to Improve Work Quality
Onboarding new vendors is time-consuming and frustrating. Every time you assign a matter to a new vendor, you have to re-explain your preferences, invoicing rules, required tools, and more. Partnerships facilitate ongoing working relationships that help you and your vendors improve together.
Consider all the steps you take to onboard a new vendor. Chances are it looks something like this:
- Review engagement letter
- Set up internal processes for invoicing, communication, etc.
- Train vendor on legal e-Billing system
- Go through user onboarding for multiple attorneys at the firm
- Review billing guidelines
- Set up connections with accounts payable, bank accounts, etc.
All of that can take up to a month or more. If you hit any snags — like billing guideline disagreements or scheduling issues — the process can drag on for months.
Long-term work not only saves you from repeatedly onboarding new vendors; it gives you a chance to collaborate with vendors on your preferred work style. Partnerships encourage both sides to improve work quality together. Because both parties know the work is ongoing, everyone is motivated to keep work quality high.
Partnerships simplify vendor management, as well. Think of it like a garden. Planting and nurturing seeds (new outside counsel) take a lot of time and attention. But once you get a strong root system (established partnership), the plants don’t need nearly as much attention to thrive. Lay down roots with your vendors and grow together.
4. Access to Internal Software and Resources
Treating your vendors like partners allows you to leverage law firm resources for your department. In fact, many vendors have a client success team dedicated to coordinating access to shared tools and managing the ongoing relationship between their firm and your department.
Client success teams may provide access to compliance software, legal entity management software, and/or customized web portals. In turn, vendors may take advantage of some of your internal tools, such as your document management system.
When you treat outside firms like partners, they are more likely to extend other internal benefits to you as well, including opportunities for continuing legal education (CLE) credits. Law firms often create CLE-accredited presentations for their own teams and are happy to invite partners to attend the sessions as well.
This can be especially valuable near certification deadlines when firms will offer a day-long “CLE blitz” to help legal professionals in their network complete the requirements on time.
Be sure to ask your vendors to connect you with their legal pricing teams as well. Much like the client success teams, pricing teams exist to improve the relationship for both parties. However, instead of coordinating shared resources, pricing teams help negotiate mutually beneficial fee arrangements for ongoing partnerships.
Partnerships Between Legal Ops and Vendors Benefit Everyone
Strong partnerships are a win/win situation — everything else is lose/lose. When legal ops has all the power, it may feel like you’re winning, but the power dynamic creates animosity. If your vendors don’t like working with you, everyone is losing.
Vendors are just as interested in finding a good fit as you are. They want to be your partner. Many law firms even have customer success or pricing teams dedicated to building better relationships with legal ops teams. Our upcoming webinar, Behind the Scenes with Law Firm Pricing Teams, will feature professionals from both the vendor and the legal ops side of the relationship. Sign up now to see how talking with legal pricing teams on the vendor side can lead to successful partnerships.