Wolters Kluwer’s ELM Solutions recently hosted an enlightening panel discussion on vendor management – and law firm convergence in particular – as part of our Legal Ops ACCELERATE webinar series. We were joined by Karen Helten, Outside Counsel Senior Manager at Salesforce, Don Knight, Director of Legal and Tax Operations at Crown Castle, and Preston McGowan, was formerly Chief Transformation Office for Goldberg Segalla and VP of Claim Litigation at Chubb Ltd. With this level of experience and expertise represented on the panel, the session featured countless insights on convergence and other aspects of legal vendor management. Here are just a few of the valuable takeaways from the discussion:

Law firm convergence alone doesn’t save money. 

Convergence projects don’t automatically generate cost containment on their own. Simply reducing the number of firms you work with isn’t going to make an appreciable difference in your organization’s legal spend. The key is to combine the reduced panel of preferred firms with rigorous procurement methods, standard commercial agreements, and data-driven stewardship programs to truly drive the economic value.

When executed well, however, the savings can be significant. One of our speakers worked on convergence initiatives that generated more than $80 million in legal spend savings over two years. When a successful convergence project leads to legal departments meeting their goals and firms getting more work, the relationships with those firms get stronger. The right approach to this type of project drives profitable growth for both organizations.

Start your program with high-impact areas that are predictable. 

Beginning a convergence program the right way is an important part of succeeding. Starting too big, or with a practice area that doesn’t have adequate historical data, could start you on the wrong foot and make it difficult to achieve your goals. The best approach is to start small with something that has high impact but is relatively repetitive with several common patterns in historical information. Look at the data you have and choose an area with high spend and matters that don’t have too much variation.

You may also find that consolidating work with alternative legal service providers (ALSPs) makes sense as a starting point for your organization. For many companies, it isn’t cost effective or secure to spread discovery projects across the firms that are assigned to the litigation. A single discovery provider can probably keep your data more secure, ensure good governance, and help you save money. Legal teams need a clear understanding of their matters, backed by historical data, to help determine how best to use ALSPs.

Don’t overconverge. 

In the midst of a convergence effort, it may feel as though narrowing your panel to as few firms as possible will provide the greatest cost savings. But don’t fall into the trap of working with too few outside counsel providers. If you whittle your preferred list down to just two or three firms in some area of your operations, you could be putting yourself at risk if one of those firms encounter serious challenges.

Particularly during economic disruptions like we are experiencing now, you need to build some contingency into your panel. In challenging times, some firms inevitably lose partners or even declare bankruptcy. You’ll need to ensure that the firms you choose will be there for you in the long run and can truly handle an increase in volume if you need to shift more work to them. Evaluate the stability of any firm you are considering, as well as how prepared they are to scale up, if that becomes necessary.

For more on these themes and far more advice from our expert panelists, watch the recorded webinar Advanced Topics for Vendor Management. And visit our Legal Ops ACCELERATE page for access to many more webinar recordings and other downloadable resources to help you optimize your legal operations.