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Commercial Round-Up: Highlights of the Week

April 13, 2018

EU regulation: the European Commission is proposing action in two areas that would have major impact on business. One is the threat of introducing a universal code that would allow consumer class action lawsuits. The other is specific to the retail sector and would be legislation related to unfair terms imposed on suppliers, in particular in areas such as payment terms and unilateral rights to change contracts.

Procurement as a partner: according to a survey released by the Buying Legal Council group, collaboration between in-house legal and procurement yields average savings on legal spend of 21% a year. This drops to just 7% in organizations where collaboration is absent or weak. Of those surveyed, just 25% say that there is a good partnering relationship between legal and procurement.

‘Big Law’ under threat: Corporate Counsel magazine reports a shift away from the largest law firms. A survey by the Economist Intelligence Unit found that concerns over fees and increasing need for deep local knowledge is pushing more business to smaller and more specialized providers – 40% of large corporations surveyed expect this trend to increase over the next 5 years. At the same time, the Financial Times pointed to the continued consolidation of major law firms, predicting that we will soon see the emergence of the ‘$5 billion law firm’ – itself a response to those growing pressures on traditional fee structures.

NOTE: IACCM is currently conducting a survey on law firm fee structures and the success of negotiators in achieving alternative pricing models. To participate (and receive a copy of the report) visit https://www.research.net/r/legaldepartmentspendmanagement.

Cloud security: a report by HelpSystems highlighted the dangers of assuming that cloud infrastructure and applications are secure. It emphasizes that “IT teams, cloud providers and trusted vendors need to work together to establish and implement well thought-out policies to keep data secure”. IACCM’s conversations with leading corporations suggests they are giving thought to these ‘relational’ mechanisms in their selection of provider and within their contracts.

Machines v. Humans: in the continuing debate over whether machines can be trusted to exercize judgment, I was reminded of an article in the Economist from 2011. Researchers monitored over 1,000 applications by prisoners to parole boards. They discovered a direct correlation between the number of applications granted and the timing of lunch and snacks. A full stomach had a major impact on the level of clemency. Bring on the machines!

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