Think your panel firms are giving you the best rates? Think again.
Many legal operations teams invest significant time and effort into building panel programs, expecting predictable pricing and volume discounts. On paper, it makes sense: consolidate work with a select group of firms, negotiate favorable terms, and watch the savings roll in. (If you are interested in optimizing law firm relationships, you may also appreciate my recent blog on law firm panel management, featuring insights on structuring, measuring, and maintaining high-value panels.)
But here’s the reality: when those same teams finally compare their negotiated rates to industry norms, the surprise is real. Rates are often higher than expected and quite possibly even higher than peers who don’t have panels. Why? Because rate negotiations for panel selection often happen in a vacuum, without the full picture of how firms price their services or how those rates stack up in the market.
The assumption is that volume equals leverage. Yet, law firms are sophisticated businesses. They know how to balance discounts on one matter type with increases elsewhere. They may also anticipate annual rate escalations that outpace your expectations. Add in the complexity of multiple practice areas, geographies, and associate promotions, and the “discount” you negotiated can quickly erode.
Another common challenge: panels often start strong but lose momentum over time. Without regular performance reviews and data-driven insights, firms can drift from agreed-upon terms, and legal departments may not notice until budgets are already strained. Even well-intentioned efforts to reward loyalty can backfire if they’re not grounded in a clear understanding of market dynamics.
So, what’s the takeaway? Building a panel is not the finish line; it’s the starting point. To truly capture the value you expect, you need more than a list of preferred firms and a spreadsheet on rates. You need visibility, context, and a strategy that evolves with the market.
My short paper, Gaining an edge with legal rate analytics, explores why traditional approaches fall short when it comes to using analytics for rate management and what leading legal operations teams are doing differently. It’s not just about controlling costs—it’s about looking at a wider set of metrics and positioning your department as a strategic partner to the business.
Download the paper to learn three practical steps that can help you turn your vendor management practices into a true competitive advantage.
