Benchmark Success Using a Holistic Vendor Management Program



Are you measuring your law firm vendors against correct evaluation metrics at regular intervals? Engaging with the right law firms is critical to the success of legal departments, yet many departments lack structure in selecting vendors, assessing their performance, and providing consistent, standardized scoring and feedback. All of this can be accomplished through a vendor management system.

Many mature law firms recognize how important vendor management is to an effective sourcing strategy.
In sprawling environments with multiple providers, vendor management is essential to overseeing the delivery of each vendor’s contractual, financial, and operational responsibilities. By driving a deliberate, consistent, and standardized process, the vendor management program enables an integration of a holistic, outcome-based service model—the pinnacle of sourcing strategies.

This LexisNexis® CounselLink® white paper presents holistic vendor management best practices. It also covers challenges and solutions to help legal departments “fill in the blanks&edquo; for each vendor’s profile and performance, providing for a consistent and end-to-end, outcome-based template across the firm’s vendor matrix.



What is Vendor Management?

It’s a system of processes that allow organizations to control costs and drive service excellence to get increased value from their vendors throughout the relationship lifecycle.

Understanding how well each of the law firms in your vendor matrix meets (or exceeds) your expectations
and how they all measure up against each other in KPIs is an important management insight. These insights can help control costs, improve legal outcomes, and increase your legal department’s value to the entire business.

According to the 2020 ACC Chief Legal Officers Survey, “One in 3 CLOs are terminating law firms for failing to meet expectations. Most companies are redirecting work to new law firms with roughly 10% permanently moving the work in house. CLOs say you need to stay involved in matters with law firms, communicate regularly, and monitor their work.” Yet…“One-third of CLOs anticipate outsourcing more work to law firms” in 2021.1



Why is Vendor Management Important?

Many legal departments have focused on spend management and matter management over vendor management. But a properly structured vendor management process that is aligned with corporate objectives provides many benefits, including:Many legal departments have focused on spend management and matter management over vendor management. But a properly structured vendor management process that is aligned with corporate objectives provides many benefits, including:

  • Measured law firm performance—objectively and consistently
  • Integrated VM with expectations clearly stated in outside counsel guidelines
  • Strengthened relationships with law firms
  • Managed costs associated with outside counsel
  • Improved business outcomes that matter
  • Selected the best law firm mix

Effective vendor management programs incorporate metrics, goal-setting, reviews, communication, and accountability into workflows and processes. Establishing a process to select and assess vendors with tools that both improve and demonstrate value helps legal departments demonstrate their greater value to the organization.

Ask yourself the following questions when reviewing your law firm vendor matrix:

  1. Who should get assigned to critical matters?
  2. Who are your top, average, and low performers?
  3. Is the vendor complying with billing guidelines?
  4. Is the vendor producing the desired outcomes?
  5. Is this a valuable relationship?
  6. Is the vendor meeting your diversity targets?



Facing the Challenges of Vendor Management

Companies of all sizes face challenges with vendor management processes. For small companies, vendor management starts as a simple process, covering a limited number of relationships. But without a scalable program in place, organizational growth can breed ad hoc processes, inconsistent evaluations, and generally poor or an altogether lack of insight. By the time a company becomes mid-sized, bad habits are entrenched.

“Whether an organization’s mandate is to protect customer information, provide reliable business services, or prevent financial fraud, best practices and public expectations dictate that a company catalogs its vendors, assess their services for gaps, and records those assessments in an auditable manner.”2



Managing and Evaluating Vendors

How can I get a complete view of the work performed by my vendors?

Our legal department has limited insight into vendor data, hindering our ability to make informed decisions when managing and evaluating our vendors.

Gain insight via a holistic, visual dashboard view where legal departments can see high-level and detailed metrics into vendor costs, matter type distribution, efficiency, diversity, and timekeeper performance.



Better Sourcing Decisions for Legal Work

How can my legal department make the best decision when matching a vendor to work a matter?

We don’t have the right reports to measure vendor performance, so we can’t decide which firm is right for each matter.

Leverage tools to evaluate the best ways to allocate work. Select the right vendor with:

  • Vendor scorecards that rate law firm performance and matter outcomes
  • Rating benchmark tools to compare and negotiate rates
  • Law firm diversity report that aligns with the ABA Diversity Survey to help meet diversity targets
  • Several reports to help legal departments match firms to the right type of work
  • Strategic consultants provide guidance and best practices



Collaborating with Vendors

How can I best collaborate with everyone on my vendor matrix?

We don’t have the right tools to communicate and collaborate with vendors.

Utilize tools to allow interaction with law firms on matters, documents, fees, and early payment terms. The right vendor management tool should also serve as an engagement and communication tool to help the legal department stay on top of matter status and costs, establish budgets, share and enforce billing guidelines, negotiate fee offers, and offer vendors an early invoice payment program.



Characteristics of a Successful Vendor Management Program

Although the specifics of vendor management programs vary widely from one organization to the next, there are certain common characteristics that distinguish the ones that work the best. In general, the most successful programs:

  1. Secure the buy-in of in-house lawyers throughout the development process
  2. Manage vendor management as an ongoing process, periodically reviewing data with operations management and lawyers
  3. Reassess metrics periodically, adding or removing metrics as needed
  4. Recognize that a small, focused number of metrics is more effective than pages of data
  5. Share expectations and scores with outside counsel to improve relationships and performance3



What to Look For

When you are at the point of choosing a vendor management program, there are distinct service offerings that will help pinpoint a successful strategy.

  • Health check
  • Billing guidelines advisement
  • Rules optimization
  • Alternative fee advisement & fee structure optimization
  • Budget implementation program
  • Vendor management program
  • KPI advisement
  • Dashboard advisement
  • Pricing strategy
  • Analytics fundamentals
  • Diversity program



Choose the Metrics: Subjective or Objective?

Developing and implementing a vendor management system is a multi-step process. The first step is to choose the metrics that will feed into the evaluation scorecard, and ultimately, affect the law firm selection process.

Often, the first metric considered is price-related, such as partner billing rates paid to each firm in the company’s panel. That’s a good start, but managing price is merely one objective of legal operations. A more comprehensive set of metrics is required, one that compares firms across all of the factors that are important when it comes to managing vendors.

The challenge is to select metrics that will allow you to understand which firms meet expectations in terms of relevant variables such as price, matter cycle times, outcomes, adherence to billing guidelines, etc. To arrive at a comprehensive, concise set of metrics, it can be useful to conduct discussions with in-house counsel.

Asking what sets a trusted, “go-to” law firm apart from other firms often produces information about expectations that can be translated into metrics. It’s important not to frame the discussion as asking for recommendations for what to measure, but rather, as simply asking the in-house counsel to articulate their expectations regarding the firms that work for them.

Once you’ve established expectations, brainstorm all the different ways that you might measure against those expectations. There are always going to be multiple ways that you can measure something, so your ultimate goal is to get to the one metric that’s the best proxy for what you’re trying to measure.




Law firm vendors are critical to the legal department’s success. Having a tool to assess your vendor management programs and identify improvement and collaboration opportunities will help strengthen those relationships.

A properly structured vendor management process is beneficial, as it helps corporate legal departments:

  • Control vendor costs, while strengthening service
  • Select the best mix of law firms
  • Objectively and consistently measure law firm performance
  • Strengthen relationships with law firms
  • Extract more value from vendors
  • Deliver and demonstrate greater value to the organization

Look for a vendor management program that allows both a granular and a 360-degree view of your legal department’s vendor matrix with tools that:

  • Compare and analyze historical timekeeper rates
  • Allow clients to rate law firms on their key attributes with a vendor scorecard
  • Ensure your vendors are meeting your diversity goals
  • Review firm performance and communicate these findings

A robust Vendor Management program such as CounselLink can help you catalog, assess, review, and engage the vendors you count on to move your legal business forward every day.



About CounselLink

LexisNexis® CounselLink® is the leading cloud-based enterprise legal management solution designed to help corporate legal departments gain 100% visibility into their work, matters, and invoices. CounselLink delivers Work Management, Financial Management, and Vendor Management solutions in one easy to use platform to help you to control costs, maximize productivity, and make better decisions. Gain access to meaningful data around the work your legal team does so you can demonstrate the value your department brings to the table.



About LexisNexis

LexisNexis® Legal & Professional is a leading global provider of legal, regulatory, and business information and analytics that help customers increase productivity, improve decision-making and outcomes, and advance the rule of law around the world.




1 2020 ACC Chief Legal Officer’s Survey Key Findings [PDF file]. (2019). Retrieved from

2 Miller, Ross. Rethink Your Vendor Management Program to Protect Customer Data [PDF file]. (2016). Retrieved from

3 Getting Analytical — Best Practices for Creating a Vendor Management Process. (2018). Retrieved from

4 CounselLink Strategic Consulting Services. Vendor Management Program: Design and Implement [PDF file]. (2018). Retrieved from

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