At this year’s Law Firm Leaders Forum in New York City, Professor Richard Susskind’s keynote challenged the audience to ponder whether the current market conditions were a threat or an opportunity for law firms. One of the main challenges Susskind identified was how to deliver “more for less”. Great opportunities exist to meet this challenge by expanding strategic thinking when it comes to your firm’s expense management decision processes. At Mattern, we have been discussing how to both simultaneously drive top line revenue through the procurement process and focus on expense management—both by driving value from your vendors.
Your firm’s outsourcing contract is a primary opportunity to increase strategic thinking, drive more value, and set your firm up for success in the long term. It could take several months, if not over a year, to analyze, structure, negotiate and implement an outsourcing contract. Your firm may have successfully structured a competitive contract and, after all of that front-loaded work, it may seem acceptable to sit back and wait until contract renewal notification to focus on it again. Even if you meet quarterly with your vendor to review the numbers, your firm might be disappointed with your end result.
In the current market, change is the only constant. Many conditions will shift over time, and your outsourcing services will need to shift as well, while remaining cost effective. The terms and conditions will most likely not remain constant throughout the life of your contract. Possible shifts include:
- Workflow and headcount
- Equipment configuration and utilization
- Review of new or changing technologies
- Changes in supply cost.
You can almost certainly guarantee that your outsourcing vendor will be knocking at your door with an amendment to add equipment or headcount if any of the above items have increased. It is doubtful that your vendor would be as willing to suggest reductions if needed.
To guarantee your outsourcing contract can adjust to fluctuations at the firm, don’t sit back and wait for renewal notifications to kick in. Give your vendor a check-up mid-way through the contract term and put your firm in the driver’s seat.