Negotiation is one of those elusive topics that everyone sees as important, but few can really pin down. It is something that we believe we are good at or bad at, without being able to specify precisely how we make the judgment.
In the business world, most executives think that skill as a negotiator is an important characteristic (probably true) and surveys suggest they believe they are personally good at it (rather more questionable). Historically, it has been seen as something innate, rather than something that can be easily taught. It has been treated as a skill, rather than a process. But on what criteria? What are the charactersitics of a ‘successful’ negotiated outcome? Is it getting what you want (short-term) or laying the foundations for a successful relationship (long-term)?
And moving beyond the personal and individual, to what extent do organizations make themselves successful at negotiating? Are there companies or entitles that have a consistent record of success and, if so, how have they established that capability and ‘bred’ successful negotiators or negotiation teams?
These are questions that IACCM intends to answer with its exploration of Negotiation Excellence. Last year, it tackled the area of post-award contract management – and not surprisingly, found that the success of many deals depends on what happened during the negotiation phase. It undertook that work by asking professionals worldwide to nominate companies and organizations that they admired (or respected) for their performance in this area. The results (published in September 2008) were followed up with in-depth interviews with the winning organizations.
A similar process is being followed now and IACCM is inviting people to nominate the companies that they believe represent excellence in negotiation; you can participate at https://www.etouches.com/negotiation1. As with all IACCM surveys, input remains confidential; no one will be in touch to sell you anything; and all participants receive a report with the final results.
The Times newspaper carried a scathing attack on Reverse Auctions in its June 1st edition. In an article entitled Elderly Left At Risk By NHS Bidding Wars, it implied that a relentless search for savings is resulting in dramatic shortfalls in service.
This accusation is of course not new. In previous blogs – such as ‘E-Sourcing – Does It Destroy Value?’ – I have highlighted the concerns felt by many about this ‘de-humanizing’ tool. But as advocates of the technology suggest, it is not the tool that is wrong, but rather the way that it is used.
The Times article once more raises the challenge of ensuring that organizations operate with appropriately balanced goals and objectives. There are three key areas that need to be addressed.
First, if Procurement value is measured primarily on the basis of savings at the time of contract award, it is unreasonable to blame them if other business objectives are ignored.
Second, even if Procurement goals are broadened, it will take time for behaviors to change. Many times there is a lack of investment in skills analysis and training to ensure that staff are equipped with the wider skills required by a broader value delivery mission. This includes the need to maintain involvement – and accountability for results – throughout the relationship life-cycle. If they felt the pain of failure, they would be more interested in ensuring that it was avoided.
Third, I see the big problem with reverse auctions as being a failure to understand the fundamental difference between product acquisition and services acquisition. Products are tangible and their performance is simpler to understand and measure. Services require a much more sensitive understanding of the values and requirements of the users of that service. The need for greater dialogue between providers and users, the need for Procurement to be far more adept at collecting and documenting the scope and goals are two obvious differences.
Each year, IACCM collects data on the ‘most frequently negotiated terms and conditions’. Our members recognize that there are big problems today. Internal organization and measurements cause many Procurement, Legal and Contract Management groups to act more as arm’s-length auditors and risk managers than as efective consultants in aligning user needs with supplier capabilities. That results in a focus on terms that allocate risks and drive down acquisition costs, rather than on terms that generate value or encourage collaboration. Public sector procurement rules are especially damaging in this regard (as an IACCM survey in 2008 indicated).
Our research tells us that we know things must change – because the alternative is a continuation of failed relationships and negative headlines. IACCM has developed a clear “Agenda For Change”, highlighting the good practices that will ensure steady improvement. The big challenge is not reverse auctions or the automation of relationship processes; it is the failure by organizational leadership to drive the changes needed to adjust to a services-led, networked world.
The theory of ‘incomplete contracts’ was first introduced by Oliver Hart in 1995. This is the theory that says no contract is complete because none can anticipate all the future events that may have impact upon it.
This incomplete contract theory is especially important today, when you consider how many areas are not easy to anticipate. For example, global contracts operate under a whole range of uncertainties and gaps in knowledge; the speed of change also causes uncertainty; new competition, regulation, political instability, economic shifts, climate change, technology and communications, social values – these are just some of the areas that can be disruptive to any contract relationship and are probably impossible to predict.
Indeed, even attempting to predict every eventuality would cause so much delay and prove so controversial that it is clearly impractical to beleive that all factors or risks can be anticipated. The one risk about which we can be relatively certain is that unexpected changes will occur.
Therefore the chances of achieving successful outcomes would appear to be improved if:
- The people involved in contract design have a wide array of information and insight
- Mechanisms are created that will help to identify relevant changes as early as possible during the life of the contract
- Methods by which changing circumstances will be handled by the parties are agreed during the initial negotiation and incentives are designed to ensure they are followed
This thinking is reinforced by the results of IACCM’s latest studies of the most frequently negotiated terms. Negotiators recognize that today’s focus on risk allocation (liabilities, indemnities, liquidated damages) and rights (intellectual property, confidentiality) is not optimizing results and they are also clear about the areas that are important for future focus. For example, scope becomes critical because we need a firm baseline against which changes can be measured. When change is so frequent and rapid, the number of arguments over whether things are in scope or out of scope inevitably increase.
And then of course change management and communications become key; not because of whether or not you anticipated changes, but because you must have a clear and agreed way in which all those changes can be handled without causing disputes or termination.
It seems that the contracts and negotiations community has a good sense of what they need to do in order to drive greater value from contract relationships. More time needs to be spent on ensuring mutual understanding of the goals and how they will be safeguarded. But achieving the shift is proving to be a struggle. Timing of involvement, resistance by internal stakeholders or the other side, lack of resource, absence of executive support for change – these are among the top reasons why things have not altered.
Achieving this shift in focus is the main goal of IACCM’s current work – and any contributions on ways that it might be achieved will be welcome.
At last week’s Shared Services & Outsourcing Conference in Budapest, IACCM led a ‘blue sky’ discussion group on the subject “How can you genuinely create organisational integration between client and provider at a global and local level?”
The hypothesis behind this session, delivered to about 40 BPO leaders and executives, was as follows: “It has become widely acknowledged that “smart contracting” is the key to a successful BPO relationship. However, traditional legally-driven negotiations often create ‘structured adversarial relationships’, designed to punish failure, rather than encourage the growth of a strategic relationship. This tendency is aggravated by the efforts of procurement experts to view BPO as a commoditised service rather than an incentivised business partnership.”
This statement – interestingly – came from SSON’s research of market trends and discussions with its executive audience, not from IACCM (although we tend to agree with the sentiments expressed). The session provided a rare opportunity to meet with senior users of legal and contract services, to establish how they really feel about contracts, negotiations and those who control large elements of the contracting process.
A Shared Concern
We approached the session by admitting that many of our members – professionals in negotiation and contracts – are similarly dismayed by the way that many relationships become bogged down in lengthy and adversarial discussions of risk. This is epitomized by the recurrent focus on indemnities, liabilities, liquidated damages and other mechanisms that protect or defend against failure. We then discussed the areas of contract that IACCM members believe should be the focus for negotiation – the areas that make the contract into a framework for relationship governance.
Our audience was nodding violently as they viewed the ‘new’ negotiations agenda that this shift implies. So then we posed the question: “In your opinion, what is preventing the shift in the focus of negotiations?” And the answer was unanimous – “Lawyers”.
The Problem Lies With Lawyers: Or Does It?
While many recognized the talents and contribution of individual attorneys (especially, it seems, those from outside the company – the view of in-house was rather mixed), there was a feeling that lawyers generally seek to dominate areas of the negotiation and that their instinct is to protect against unquantified fears. “They are simply too negative and the negotiation lacks balance,” was one comment.
The audience recognized that there are dependencies for escaping this negative battle over risk allocation. In particular, they accepted that there must be greater diligence in producing a mutually agreed scope of work and that the process for doing this must be more inclusive. If lawyers and contracts professionals are not adequately engaged during this phase, not only is precision likely to be lost, but also they will feel greater need to insert protective clauses ‘in case things go wrong’.
There was extensive discussion of the need to better understand the needs of end-users of the BPO service. They are typically not at the table, yet must be the focus. Successful deals tend to concentrate on how to build good communications and establish a strong on-going relationship, rather than using the available time and resources on traditional contract terms. A number in the group also acknowledged their accountability for failing to drive the right negotiations agenda. They commented that “We often allow third party advisers to skew the discussion” and “We allow some of the tougher stuff to slip down the list, not to be properly discussed”. For example, Change Management comes high in the ‘new’ top ten terms, yet is an area of complexity that is frequently ignored or put on one side ‘for later’.
An Action Plan
The discussion led to a number of agreed success criteria and some suggestions for how contracted outcomes might be improved:
- Make BPO teams more inclusive from the outset and ensure roles are clearly defined
- Ensure evaluation criteria (at both buyer and provider) focus more strongly on evidence of cultural alignment between the organizations and that the other side can provide evidence of its success at partnering
- Build a negotiation strategy that aligns contract needs with partnership relationship needs
- Do not abdicate responsibility to third parties, or have them act as a buffer that stifles communication, especially to user groups
- Consider ways to create shared incentives for proper scope definition
- Keep performance indicators simple – be clear about goals and ensure the measurements align
- Spend time on establishing change management and communication disciplines and methods – prepare for the future
- Move towards arbitration / mediation as the basis for resolving disputes
At a more general level, the group felt that work to develop standard terms would be helpful, even if these operated more as guiding principles for negotiators. The need for an impartial Association, such as IACCM, to sponsor such work would be welcome. “It is time for a non-profit to enter this market,” observed one senior executive.
This audience overwhelmingly sees today’s contracts and contracting practices as ‘a problem’. However, the discussion revealed a readiness by executives to contribute to a new agenda and to offer a more inclusive role for those charged with contract development. While many would like to simplify the way that BPO relationships are formed, they understand that there must be discipline and there must be instruments to manage the risk of failure. In the words of one participant: “Alignment must have limits; we do need contracts”.
I often enjoy listening to ‘Thought For The Day’ on the BBC’s Today program. The religious aspects do not interest me, but the speakers often provide a salutary counter-view to popular wisdom.
Today’s presenter challenged the old adage about power corrupting – and instead suggested that it is fear that corrupts. Fear that prevents us from stepping forward and challenging things that are wrong or unethical. Fear that causes us to remain silent in the face of injustice or poor decisions. And fear that inhibits those in power – because of their fear that they will lose it.
Today’s environment has brought far more openness. We are increasingly aware of what is happening in the world and, to some extent, the media and the internet hold those in power to much greater account. Yet in many ways, this transparency simply emphasizes the extent to which we all live in fear; because in the end, it highlights how many bad – and sometimes evil – decisions are being made – and not being challenged.
And of course it has also revealed our tremendous propensity to never say sorry, to never be accountable and to divert blame onto others.
I am increasingly convinced that the next few years will see revolutionary change in the way that inter-personal and inter-organizational relationships are managed. I believe that we will become much better at asking tough questions at the beginning of a process and not waiting to conduct post-mortems. We will demand more rigorous examination of the facts and the forecasts.
These changes have implications in many areas. Bidding and contracting processes, supplier and customer selection, new product and service introductions – each of these is among them. Our community must increasingly be equipped with facts and must also be more demanding in the facts we seek from others. Status and respect will flow to those who are willing to take accountability, because that is the mark of leadership and is also the mark of those who are not corrupted by fear. We have the chance to re-define processes in a way that leads to more successful trading relationships based on honesty, openness and integrity – and to escape the model that today stifles tough conversations and instead focuses on theoretical victories and the avoidance of blame.
What do I mean by these comments? Well, here are a few examples:
- Stifled conversations. We all know that it is often hard to deal with areas like forecasting and managing change, so we do not discuss it. Or we avoid innovative value propositions because it would involve too much complexity, or require re-opening too many conversations.
- Theoretical victories. The obvious examples are the savings claimed by procurement, or the celebrations of forcing high risk contract terms onto the other side. In the end, it is the actual outcome that matters – and these ‘victories’ often undermine the result.
- Avoidance of blame. We are frustrated by the imprecision of contract and negotiation processes, the uncertainty of who does what, the multiple hand-overs and hand-offs. Yet at the same time, it is very convenient because when things go wrong, it is almost impossible to allocate fault. And in negotiations, much of the game is about allocation / avoidance of possible adverse consequences.
As leaders, our aspirations must become focused on enabling success; and we must demonstrate the courage to tackle our own fears and to challenge the fears of others.
A prosecution has begun in the UK as a result of a wife murdered by her husband. The husband was found guilty some time ago, with the facts uncontested. This prosecution is by the wife’s family and is alleging negligence by the Crown Prosecution Service and the local police because of their failure to prevent the death.
The story is sad and the facts certainly suggest a failure of judgment and a failure to act by the relevant authorities. But the thing that interests me is the reaction of the local police chief to the threat of being sued. He suggested that such cases are against the public interest because they create a defensive and secretive culture and, as a result, mistakes are not acknowledged and improvements will not be made.
In other words, our reaction to the allocation of blame and the threat of penalties is to deny responsibility and sweep the facts under the rug.
Although on one level the family understandably want their issues addressed, I also sympathize with the perspective of the police chief (even though his attitude may lead some to question the entire purpose of policing and the courts). Evidence from the United States shows exactly what can happen when trial lawyers get their hands on similar issues. The stories that Ed Dauer tells us regarding the health sector and bloodbanks are a case in point. A culture of blame and retribution creates a response of secrecy and hidden information; the result is often that improvements do not occur and performance problems persist.
Another example of the weakness of control and compliance cultures is of course in the area of financial services. As I commented several months ago, it is interesting that the industry that collapsed is arguably the one with the greatest global regulation. Philip Booth of the Institute of Economic Affairs made this observation in The Sunday Times on May 18th. “Regulation and government intervention distorted behaviour,” he asserts. “Market participants cannot be perfected by regulators. They therefore must not be cosseted by regulation ….. but face the financial consequences of their own actions”.
Similar distortions of behavior result from many of today’s contract practices, as regularly revealed and discussed in IACCM’s studies of the Top Ten Negotiated Terms. Terms and conditions drive specific focus – for example, through performance indicators or service levels. They also generate open or hidden actions and information flows, based on the way that reviews are conducted or risks allocated. Companies that impose unbalanced risk terms may think they have won the negotiation and somehow protected themselves. But in truth they have simply encouraged self-protection and an environment where everyone seeks to avoid blame. So rather than discuss and address performance issues, they are instead hidden from view and turned into continuing areas of dispute.
How effectively is your organization attracting and retaining talent? What are some of the critical success factors, especially with regard to staff in shared service centers or outsourced service providers?
Last week I attended the Shared Services & Outsourcing Network Conference in Budapest and this was a topic addressed by one of the presenters. He tackled the subject by asking : “What makes people tick? And what makes them sick?”
I found the presentation interesting not only because of the areas he highlighted, but more specifically because I wanted to test their alignment with our thinking at IACCM as we work with corporate members to assist in their talent development and retention.
What Makes Them Sick?
When you look at the average hires for shared services and outsourced service centers, approximately 80% are college graduates and a majority are tri-lingual. So they are the type of people who need to be stretched. Things that ‘make them sick’ are:
- Boring and repetitive job content.
- Lack of career development opportunities.
- Frustrated aspirations to raise their skills.
- Gaps between brand image and reality.
These highly qualified individuals have aspirations and want to be connected to an organization in which they feel pride. Work / life balance is important – in part because free time is time to invest in further training and skill development. Companies must also meet their promises – to employees, customers, suppliers and society at large, to generate a sense of pride and ownership.
What Makes Them Tick?
- An inclusive and stretching culture that makes each individual feel that they have the chance to influence their environment and the company.
- A distinctive working environment.
- Visible commitment to the attraction and development of talent.
At a more specific level, the following were identified as ‘must-haves’ for talent attraction and retention:
- Documented capability framework
- Robust method for gap analysis
- Clear methods and indicators to spot talent
- Differentiated approaches that appeal to talent
- Multiple career path options that allow individual growth
- A commonly used ‘retention toolkit’ that supports Reward, Recognize, Engage
One of the key areas is to ensure that job role requirements are visible so that people can plan to develop their career by understanding and filling identified gaps.
IACCM’s Contribution
So where does IACCM fit in all of this? Of course, as a professional association, there are limits to what we can provide. But there are some important contributions that we make, allowing management to focus on the more internal elements of their program. This doubtless explains the Association’s continued growth and the positive feedback to our training and development programs:
- We are global. Our membership spans 106 countries and our programs are accessible anywhere in the world. They are also designed for a multi-national audience and respect cultural and business variations. They are based on the principle that good practices and good ideas have no boundaries.
- Our credentials are also global. Individuals can see value in what we offer because it is transportable. They are benchmarked against a worldwide professional community and with that comes confidence and respect for them and their qualifications.
- We offer on-line capability frameworks which enable comprehensive gap analysis. Our framework builds from globally recognized skill requirements and then benchmarks individuals against their team and against an external peer group. They receive personal development plans that are objective and which highlight both positive and negative gaps.
- We provide inclusive training materials that generate an inter-active learning community. Training has always been best when it is collaborative. It is even better when it is multi-faceted. Students in the IACCM Managed Learning program are not only receiving, but they are also giving. By working as part of a multi-talented, variable experience group, everyone has something to contribute – ideas, questions, know-how. It allows students to feel they are indeed contributing to their environment and their company.
- Our comprehensive, points-based assessments look holistically at individuals and their achievements. By creating a rounded picture of academic achievement, on the job performance and social / professional contribution, we support the identification and recognition of talent.
IACCM programs appear to be far ahead of competition. They are effective and they are low-cost. We are fortunate because we came of age at the same time as the new generation of workers and we use the technologies that excite them. We understand their world because we were created by it. And we are committed to making them tick!
SpendMatters has featured an interesting commentary on the acquisition by Emptoris of Click Commerce and their stated aim of improving support to the services market.
I am not a great judge of software functionality, and therefore I will not comment specifically about the merits or otherwise of Emptoris’ products and this acquisition, but it does seem to me that the move has business logic. Our world continues to move more and more towards a services-based economy. This trend shows no sign of lessening. It is being driven by the view that we no longer want to buy ‘things’, but instead want to buy ‘outcomes’.
Everything about our society is pointing to a world where there will be greater accountability. We are demanding more honesty. And this means that companies (as well as politicians, business leaders and professionals everywhere) will be expected to make responsible commitments and to honor them.
If we are going to be held more to account, the implication is also that the relationship needs to last for the lifetime of the offering. Hence not only is structuring of the deal important, but oversight of performance moves up several notches (hence the concerns of the Obama administration and many other central governments over procurement and contract management capability).
Since no one can afford a massive increase in headcount, and robust skills in the area of services contracting are in short supply, Emptoris’ move is both logical and in tune with market needs. Having the right software to manage a portfolio of services contracts and relationships will become of growing concern to businesses worldwide. And I tend to agree with Emptoris VP of Marketing Kevin Potts when he suggests that no one has yet filled this space with a flexible and scaleable product (or perhaps service!).
Who knows, we may one day even see the light come on in more Procurement groups and they will break down this false barrier between ‘direct’ and ‘indirect’ so that acquisition decisions truly do start to focus on value.
Procurement Leaders offers an interesting commentary on the way that Procurement is being driven to destructive behavior by executive management (see The Big Debate: Short-Term Myopia hHas Taken Over From Long-Term Strategic Thinking).
The core hypothesis is that the current economic environment has caused Procurement efforts to be diverted from delivery of value to delivery of lowest price. The article suggests that short-term, bottom line savings are the imperative that has undermined the noble mission of the typical Procurement group.
I find two fundamental flaws with this commentary. First, where is the evidence that most Procurement groups ever bought in to value versus price; and second, where is the evidence that those who understood this difference have in fact changed their behavior?
At IACCM, we have the benefit of bringing together buy-side and sell-side practitioners – so we see and hear both sides of the argument and we continually explore the best methods to secure value for both sides.
For all the talk about how Procurement reached the top table, had become strategic deliverers of business value etc., we have known that this is the exception, not the rule. It is of course in the interests of the procurement press to highlight the strategic and business skills of their members; It makes them feel good, it suggests status – but you have only to talk with our sales contracting members or to observe the realities of Procurement contracts to recognize that the truth is rather different. So when the call comes from management ‘Deliver more savings’, most Procurement groups respond with relish.
But there is another side to this story. The real leaders from procurement who grasped the principles of value-add have been able to resist the pressures from executive management because they have the information and knowledge to demonstrate why this would be counter-strategic. So our experience at IACCM has been quite different from that of Procurement Leaders. In recent months, we have had numerous calls from members asking for insights and data that would assist in showing executive management why an aggressive approach to suppliers would be wrong. We have featured leading members on podcasts and in interviews who have explained why and how they ensured that renegotiation was a positive relationship builder, not a destroyer. We have had a growing participation in our Ethical Contracting community of interest, as professionals understand their role in protecting corporate reputation.
So perhaps Procurement Leaders is right to highlight myopia. But maybe the myopia has more to do with the failure of their audience to broaden its horizons and become part of a community that commits to collaborative, value-driven relationships. Strategic significance demands courage; those who wish to rise the top table must be ready to confront executive demands and demonstrate why short-term fixes will create unacceptable risks to the business.
It had to come. Most of the traditional professions are facing radical change; recent press confirms that the legal profession is not immune.
Lawyers have become critical to so many aspects of human and corporate interaction. They have been able to exploit that position through a steady growth in their number, as well as in their fees and salaries. In some respects, the global networked economy sustained their role and status – international business is complex and risky and demands legal advice. But perhaps those costs became too much and drove many to ask questions. Why do legal bills need to be so high?
Attacked On Two Fronts: The Law Firm
The onslaught on traditional law firms began a few years ago, with push-back on hourly rates and billing methods. It resulted in some innovation in service delivery and the recognition by top law firms that they must manage knowledge more efficiently. They also became more creative in marketing. Some started to use low-cost sources of supply, such as India, for a range of core services.
Wharton Business School featured this topic in a recent article, which has been summarized by IACCM analyst Ram Paravasthu:
“With most organizations under financial pressure, a Wharton research article finds several enterprises beginning to pay more attention to the value they receive from their lawyers. According to Susan Hackett from the Association of Corporate Counsels, a new approach to value is necessary because law firms had become so expensive that their fees often outstripped the value of the problem they were brought in to resolve. She observes “You can have many lawyers and paralegals all billing on a matter worth $50,000 of exposure adding up to a grand total of $250,000. That’s crazy.”
In the United States, the Association of Corporate Counsels (ACC), which represents in-house lawyers who typically hire outside law firms for specialty work, has introduced a new set of guidelines for law firms and corporate counsels. The guidelines are designed to make both sides work to keep costs in line with the value of the legal services provided, while assuring a fair return to law firms. The arrangement is similar to the types of agreements made famous by Japanese automakers and their suppliers that create value throughout the supply chain. The suppliers, in this case law firms, agree to provide their services at a fair cost, though perhaps not necessarily the lowest cost, and client companies agree to provide a steady stream of business.
The ACC also has drafted a sample covenant for companies to share with their legal providers that outlines specific steps the two sides could agree to take. For example, the covenant calls for clients to define objectives in the engagement, pay bills promptly and understand that budgets may need to be revised for unforeseen events. Law firms would agree to learn the client’s business and strategic objectives, give honest feedback on whether the client’s objectives in a matter are realistic and attainable, and use appropriate staffing to pursue a case.”
(Read the full Wharton article here: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2231)
Attacked On Two Fronts: The In-House Lawyer
A Conference Board article suggests that in-house counsel are also vulnerable. With other corporate staffs facing cut-backs in numbers, costs or both, lawyers cannot be immune. Yet lawyers face increased workload because of governance issues, heightened business risks, extensive contract renegotiation etc. So they have to become more efficient; working practices must change. However, according to the Conference Board, cut-backs are counter-productive – they do not lead to efficiency, they lead instead to greater use of external law firms!
I turned to David Perla at Pangea3 (a leader in outsourced legal services) to ask his opinion:
“The article has a degree of accuracy, but misses the point. The point really is that in-house departments, at whatever size, continue to be over-reliant on law firms. As a result, those departments find it difficult to cut law firm spend and therefore end up cutting head count. In-house departments should focus on doing more sophisticated work in-house (much of which even today is still sent to law firms), and using alternative providers for all of the day-to-day operationalized work, such as repeat, high-volume contracts, contract management and CM software implementation and data migration, legal and business research, corporate secretarial work and the like. Pangea3 provides these services, as do many of the alternative providers mentioned in the article. But in-house legal departments need to look at alternatives when times are good, and wean themselves off going to law firms for the tricky/complex work – which should be handled in-house. We did just this at Monster.com, hiring non-lawyers for day-to-day contracts (such as sales agreements, co-branding agreements, nda’s, etc.) and for things like cease & desist letters. We even used those people for due diligence on pending acquisitions. That free up the lawyers (including me) to do work that previously went to our law firms, such as M & A drafting and negotiation, complex contract negotiation, litigation strategy and securities work. Our law firms got less of not only the day-to-day stuff, but also of the complex stuff. So it is not a question of whether in-house lawyers are cheaper than contractors (of course they are), it’s a question of law firm use. Most interestingly, Counsel on Call and Kelly are simply contractors, and part of the problem, not the solution. LRN and Axiom are alternatives, using a totally different (read – alternative) model to free up in-house resources to handle more sophisticated work.”
Conclusion
The continuing pressure for change will drive radical change in the profession. Efficiencies will come, especially through the use of automation and improved knowledge management. But impatience may grow, partly due to the innate nature of the law, but also due to the complexity created by the lack of international standards. Many leawyers understand and respect the need for change; but can they respond with sufficient speed and creativity to satisfy the corporate budget owners?
Commitment Matters 