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Sunday, 12 August 2012

Companies urged to consider self-service model

A recent survey of general counsel of 74 major companies conducted on behalf or LexisNexis found that 55% of general counsel want to see colleagues take a more 'self-serve' approach to the creation of low value or low risk contracts.  What does this mean?  Put simply, if sound processes are in place to apply a suitable contract template to a given requirement, non-lawyers in the business should be able to produce the contracts themselves without using valuable in-house legal resource or potentially expensive external legal resource.

Whilst law firms serving corporate counsel may be relieved to find that the survey also reported 57% did not agree that contract templates within their organization are visible and easy to find and 51% did not agree that such templates are kept up to date, this is likely to amount to only a temporary reprieve.  Change has been a while coming, but that it will come to pass is inevitable.  As long ago as 17 September 2009, Barclays’ Group General Counsel Mark Harding made this interesting comment in The Law Society Gazette:

“We haven’t decided definitively what the right model is for us...The bigger prize of outsourcing is the standardisation of documentation, which we’ve gone in for big time, because you don’t need a lawyer involved at all. If you’ve set the templates up right, you’ve got electronic version control and all that, then it’s ultimately a better solution because you eliminate the legal cost.”

Barclays will not be the only company to recognise that standardisation (and systematisation) can lie at the heart of what lawyers have traditionally offered as part of a bespoke professional service, and it would appear that some of these companies will now start to replicate systems for themselves at considerable costs savings.  This puts at a distinct disadvantage firms that have not even systematised their own working practices, as their potential corporate clients will dismiss any notion of instructing such firms.

The LexisNexis report relates that the desire to move to a self-service model is being hampered by those who should make it happen being too busy fire-fighting, but undoubtedly the pressure to cut costs that is mounting all the time will have the desired effect and there will be substantial change.

For years, law firms, particularly in the commercial sector, have failed to take up the challenge of systematising their work where this is possible and now it may be too late.  Why would a company pay a law firm to run an automated process that the company can run itself?  If companies create workflows using software that has been available to law firms for decades, and design those workflows to alert them to where higher level legal expertise may be required, they will make the substantial savings in costs that they require, as well as improving their own efficiency.

I fully expect that embedded workflows in corporate processes will become commonplace within the next few years.  This is not all bad news for law firms, as this will create opportunities to interface between different workflow systems so that those firms that do invest and use properly the technology available to them will increase their own efficiency by being able to exchange data with their corporate clients, rather than rely on manual processes.

The forward thinkers in both the commercial and legal worlds will prosper if such thinking becomes manifest.  Others will fall by the wayside.

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