Legal14 July, 2015

Smart sourcing: “Different legal services providers each have their own specific qualities.”

Luc van Daele on reputation management Legadex Managing Director  

This guest blog post is published in cooperation with Legadex, an official partner of Legisway.

Smart sourcing 

Many companies wonder what the best way is to organise their legal work. The crisis has compelled efficiency and cost-reductions – also in the field of legal services. We are convinced that smart sourcing provides an effective solution. Smart sourcing means the targeted allocation of legal work to different people and service providers. This is based on the principle that different legal services providers each have their own specific qualities and consequently offer distinctive advantages to companies. 

Continuous search

Setting up legal information management and structuring work processes are at the heart of an innovation such as smart sourcing. Companies that achieve improved storage and enhanced accessibility with respect to legally important information clearly have an advantage. Not only do the corporate lawyers benefit as a result, everyone within the company who needs corporate information quickly reaps rewards from this development. Because countless employees – primarily corporate lawyers – around the world spend an astonishing amount of time searching and searching day in and day out. They are looking for information that must be located somewhere within the company. Searching for solutions to issues that have already been resolved repeatedly – inside or outside the company.

Crucial knowledge

This endless searching is necessary because too little attention is often paid to a smarter way of managing legally relevant information and reusing knowledge that has been gained in the past at high costs. There is rarely a high-quality and up-to-date digital information system. Crucial knowledge is continually lost as a result. The corporate lawyer generally does not have the position or the possibilities to have a clear overview of the business processes. The result: an inconvenient working method, static in the communications with colleagues and externals and ultimately – despite all the personal efforts – an increased risk of mishaps and high legal costs.

New opportunities 

The above scenario prevails even though there is now an easy way to identify companies’ legally relevant information, make it transparent and manageable and then keep it well organised – all at low costs. Major steps forward have been made in the field of legal ICT services in recent years. Examples include applications that make corporate information, decisions and powers of attorney accessible or that provide access to key contracts and information within the context of risk management. But as long as this information is not properly available, the General Counsel will continue to operate in a vacuum. His or her possibilities for genuinely gaining control and working proactively will consequently remain limited. As will the possibilities for realising structural improvements in legal services and the mutual exchange of knowledge. Progress has also been made in this area through, for example, digital collaborative platforms for projects and smarter and faster ways of generating and subsequently managing contracts. In many cases, this is an easy way to achieve substantial time and cost savings.

ICT and information management

I am totally convinced that technological innovations and new forms of services still have tremendous potential in the European legal market. Particularly in view of the growing body of European laws and regulations that is impacting numerous areas such as the financial, real estate and private equity sectors. The American claims culture is also gradually gaining ground in Europe. Organisations can learn to address this in one of two ways. They can imitate the handful of large international companies in the Netherlands that do leverage the power of ICT and information management. Or they can learn from our Anglo-Saxon neighbours who have mastered the art of smart sourcing down to the last details.

Outsourcing, insourcing and smart sourcing

Outsourcing legal processes has been commonplace in the Anglo-Saxon world for some time now. It was, however, still a relatively one-sided process until a couple of years ago. For example, UK companies outsourced all their legal processes to lawyers in India. But the cultural and language differences proved to be insurmountable and so they repatriated many of these processes back to their companies in the UK. But the basic idea behind the move was not bad. A large proportion of the corporate legal work can be standardised. Or, at the very least, placed in standardised processes. This renders real benefits for companies. After all, if you succeed in capturing it in a standardised process once, it subsequently will take must less time. So the rule is: you are better off standardising whatever can be standardised.

Accessible and manageable

And once it has been placed into standards, it is also easier to allocate this work inside or outside the organisation. The process and the information within it are made accessible and manageable for everyone. The related big advantage is that during peaks in the legal work, parts of standardised processes can be carried out easily outside the organisation, while the company retains insight and control and has more time to carry out company-specific legal work more effectively in house. They might, for example, want support from specialised attorneys in some areas, including specialist consultancy work, M&A or litigation. Engaging these service providers is less expensive and more effective for the company than allocating all the complex legal consultancy work to attorneys. 

Luc van Daele – Began his career in 1989 as an attorney at Trenité van Doorne. – After working as an attorney, he served for more than seven years as an international corporate lawyer at Sara Lee/DE. – Had overall responsibility for the legal affairs of television and media company Endemol worldwide as General Counsel from 2000 to 2008. – Together with Hans-Martijn Roos, he founded Legadex that focuses on innovation in 2008.

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