Vendor Client Relationships

Listened in this week to the Buying Legal Council Session on Vendor Risk Management (VRM) and Community of Legal Innovators Session on What Clients Really Want (WCRW). Both sessions had worthwhile and complementary content and were recorded - so check them out at the links above.

In the VRM session, the goals of a legal procurement program were stated to be minimize risk*, while at the same time improving the depth of relationship, pricing leverage and better outcomes. 

With 4,000 client interviews informing the content and a focus on how clients define "added value", the WCRW session had a lot to offer.  The top 4 client-defined value adds were: understanding the company and industry, keeping the client informed, CLE and education, and personal relationships.  

That said, there are reasons for concern around the nexus of compliance and personal relationships. 

The reason companies' legal departments have committees for rate review, RFPs and so forth is to leverage data and multiple perspectives to ensure an objective decision based on the qualifications of the service provider, and to minimize individual subjective bias. 

As was noted in the VRM session, increasingly legal departments either partner with enterprise procurement programs or to address needs of privilege, adopt parallel practices that follow a comparable standard.  In some heavily regulated industries, this is regulated, as is the case with the US Office of the Comptroller of the Currency (OCC) vendor guidance for banks.

There were points in the WCRW presentation that implied an individual attorney as the client in a corporate setting.  (e.g. can you fix my problem? do I like you as a person?")  Instead when working with inside counsel, outside counsel is always partnering to serve the business client. That client is a corporate entity comprised shareholders/boards of directors, executive management teams and so on.  The client is almost never an individual.

Is it important to have a solid working relationship based on mutual respect and trust? Yes. Do we need to be mindful of reaching a point where a personal relationship makes it difficult for us to act in full alignment with the interests of the business client? Also, yes.**  Fiduciary responsibility towards one's corporate client requires attention to this boundary and putting additional checks and balances in place as needed.   

* The dimensions of covered risk is a long list: Location, Reputation, Operations, Regulatory Compliance, Concentration, Impact on Strategy, Legal and Financial/Credit.

**When I volunteered in a woman's prison for many years there was an applicable term called "overfamiliarity." The concept was that service providers could not form personal relationships with the clientele without jeopardizing the integrity of the program and the facility.