Business & Technology Nexus

Dave Stephens on technology and business trends

Legal Services – Clause Subscriptions In Our Future?

with 2 comments

A found this article interesting. Question is, what is a company buying when it seeks out legal counsel? How do you measure value?

Most of corporate America still uses predominantly in-house legal counsel. I find it fascinating. Each company writes their own standard clauses for areas like Returns, Disclaimers, Export Regulations, Remedies, Indemnifications, etc.

Why? Are they really that different? How are best practices shaped?

Contract management systems are shedding new light onto the corporate contracting process. And it's not pretty. In both CRM and Procurement, lawyering seems to "find a way" to bottleneck commerce. And it need not be that way.

Increasingly, corporate contract repositories are helping companies understand the cycle time problems associated with legal re-invention of the wheel. It's yet another example of standard practices enabling a self-service approach to a traditionally centralized and bureaucratic process. (How can we mitigate risk but eliminate legal review for 90% of the contracts?)

Simple contract respositories and their cousins, full-blown contract management systems, seem like a very good investment. But perhaps you're not convinced. Let's say you like the added security of a large central "lawyer bank" doing contract reviews and the authoring of custom clauses by the bushel. Here's what you get for spending all that extra dough: 75 per cent of US companies cannot find 90 per cent of their contracts!

Look at the marketing and positioning of iMany and DiCarta, 2 contract management specialists. It's a no brainer! But oddly enough, these companies and the many, many other dedicated contract management folks out there haven't been knocking the cover off the ball (i.e. customers aren't lining up around the block).

It's a tough space and a tough problem. Never argue with a lawyer unless you want to lose. :) Eventually, the chasm will be crossed & these systems will become more commonplace. And I can't wait. Perhaps this is the one application, the one system that can be used to send the lawyers home with pink slips. You see, Andy Kyte, a Gartner procurement analyst, once speculated clause subscription services from premier, brand-name law firms would soon follow. Corporate lawyer downsizing. Cool!

In the meantime, as you consider how to buy legal services & what to value, I'm no help at all. But I love the idea of putting lawyers in "reverse auction position" and watching them squirm. But be careful! They might get you back!

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Written by Dave Stephens

03/27/06 6:34 AM at 6:34 am

Posted in Opinion

2 Responses

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  1. From what I’ve seen — the issue right now isn’t about applying procurement principles… yet. Right now, they’re still in the dark ages on invoicing and billing. Think core purchasing and AP about 10 years ago, and that’s where legal services is right now.

    Henry

    03/27/06 8:58 AM at 8:58 am

  2. When I was at FreeMarkets, I remember bidding out corporate legal services. As I recall, the savings were significant. Alas, we could not do much marketing around it, as the customer did not want it publicized.

    Jason Busch

    03/27/06 6:29 PM at 6:29 pm


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