Legal Ops Leaders on How to Create a Law Firm Panel Program

A recent report by the Association of Corporate Counsel (ACC) stated that large companies hire around 93 law firms each year, spending approximately $130.3 million on outside counsel. Given the uncertain economic climate, however, legal departments are increasingly seeking ways to reduce costs. One approach is the adoption of preferred law firm panels. This strategy not only reduces legal spend but it strengthens relationships with legal service providers, according to a blog post by Priori Legal.   

Priori Legal gained insights about the panel creation process from three legal operations leaders who discussed their experiences with panel programs and outside counsel management — Karen Helten, Outside Counsel Senior Manager, Salesforce; John Crawshaw, Legal Operations Manager, PNC; and Juanita Luna, Managing Director, Luna Legal Ops. Among the topics explored were law firm panel convergence (reducing the number of law firms on a given panel), its impact on their companies, and implementation successes and challenges.

Consolidating the number of law firms you engage means those law firms will have more work, resulting in greater negotiating power for your legal department concerning discounted rates and alternative fee arrangements. Additionally, data collection and analysis become more manageable, while working with a smaller set of firms reduces administrative overhead.

Before initiating a panel program, legal departments must consider factors such as the quality of the law firms, diversity initiatives, the number of firms engaged, competition concerns, flexibility, and internal bandwidth. Striking a balance between a manageable number of firms and maintaining healthy competition is crucial.

Next, legal departments should assess their current legal spend, identify key practice areas and regions, evaluate in-house counsel’s openness to working with different firms, and analyze the firms’ operational performance. 

Your decision-making and negotiating power will be enhanced by gathering and analyzing data related to all these factors. The three legal operations leaders recommend considering the assistance of outside consultants during the initial stages of panel program development.