1. Legal Services Newsletter May
2012
4C Explores the Legal Services Market
Legal Services Act 2007: Feeling the Change Fixed Prices based on the size of the client and services
Since the introduction of the Legal Services Act, provided. Other innovative offerings, including money
Procurement professionals have been waiting to see if back guarantees in certain circumstances, seem to
the new measures would open up the legal services indicate that these new suppliers will be able to
market. The aim of the legislation is to liberalise and compete with the traditional players.
regulate the market and encourage more competition
whilst providing a new route for consumer complaints. This could be good news for Procurement Managers
who will now be able to take a different dynamic into
The Act should encourage the emergence of new consideration for their sourcing work. These new
firms with different cost structures and commercial developments would certainly seem in keeping with
propositions, to challenge the more established the new legal supply landscape depicted in Richard
companies. Whilst we may be some way from that Susskind’s “The End of Lawyers?”.
scenario, the recent launch of Riverview Law indicates
that the measures are beginning to take effect. A Look Back at Susskind’s Legal Bestseller
Widely acclaimed by academics and legal professionals
Riverview Law, the trading name of LawVest, is owned alike, Richard Susskind’s bestseller explores the
by AdviserPlus Business Solutions, DLA Piper and a potential impact of numerous recent developments on
number of individuals. The company is expected to be the legal profession. Susskind was one of the first to
one of the first to take advantage of the Alternative consider the possible ramifications of information
Business Structures permitted by the Legal Services technology, communisation, outsourcing and external
Act. investment on the legal profession. “The End of
Lawyers?” envisages a bleak future for those who
The commercial offering from Riverview Law is very refuse to embrace innovation but hints at a world of
different to that of traditional firms, and can offer possibilities for practitioners willing to make changes.
Release cash Reduce cost Manage risk Improve ROI
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2. 4C’s Breakfast Debate: "External Legal Services -
best bought by Procurement, or the In-House
Counsel?"
With legal expenditure coming under increasing
scrutiny, 4C assembled a group of procurement and
legal professionals to debate the pros and cons of
sourcing external legal services with procurement
involvement versus the in-house legal counsel
sourcing the services themselves.
Antony Ray, Senior Category Manager at 4C
Associates, argued that procurement was best placed
to secure legal services whereas Emmanuelle Recoules,
Legal Director at SITA, debated that in-house legal
teams were more effective acting on their own. The
session took place at The Paramount, Centre Point, "Legal departments want to reduce cost and
London. there are two ways of doing this, head count
or legal fees, we want to focus on the latter."
Ray opened the debate by stating that traditionally,
legal services spend had been off limits to Summing up the debate, Ray felt the key to effectively
procurement. However, with organisations becoming sourcing legal services was for procurement and legal
increasingly concerned with expenditure, to work together.
procurement has begun to play an important role
within the legal services department. He stated that
Are Law Firms in the UK still Carrying Too Many
in-house counsel does not consider cost of services a
Fee Earners?
top priority and that procurement can help businesses
The Royal Bank of Scotland’s review of the legal
take this element into consideration.
profession has suggested that further redundancies
may be required for firms to restore their profits to
Ray felt that the key to effectively sourcing external
pre-2008 levels. The report suggests that a further 5%
legal services was for procurement and legal teams to
of fee earners may need to go, in addition to those
work in tandem. Procurement professionals have the
shed in 2009.
skillset to complement the insider knowledge of the
in-house legal team and can provide an objectivity
The study indicated that the market faced a range of
and analysis which is essential to optimising cost.
challenges including reduced demand and
unfavourable economic conditions. The ramifications
“Procurement of the Legal Services Act are also beginning to be felt
can add robust with new entrants to the legal market providing
quality competition to traditional firms.
evaluation
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methodology, experience to drive rapid profit improvement.
negotiation We offer specialist consulting, technology and
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Recoules agreed that the legal profession was in
general fairly protectionist and that the measurement To discuss how we can transform your costs please
process brought about by procurement could prove contact us at:
useful. However, she felt that a lack of internal
knowledge on behalf of procurement professionals Tel: 0207 605 1600
affected their ability to effectively source external Web: www.4cassociates.com
legal services. Email: Petra.urhofer@4cassociates.com
Release cash Reduce cost Manage risk Improve ROI
T: +44 (0)20 7605 1600 E: info@4cassociates.com W: www.4cassociates.com