Situation

OMC’s client was reviewing its panel of 70+ law firms with a focus primarily on driving savings through renegotiating hourly rates and volume discounts. Firms were also asked to volunteer details of pre-set fixed fees they might offer (i.e. fixed fees that are pre-set by reference to a work type before a firm is engaged and without the need for further scoping discussions). Telco was disappointed by the limited range of activities actually offered by way of fixed fees.

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Telco asked OMC to help them expand the range of pre-set fixed fees i.e. moving from a supplier-led approach to a client-led approach.

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Solution

Leveraging OMC’s extensive database of prices, rates and volume discounts, we quickly compiled an inventory of 300 separate menu priced activities, spanning all in-house legal service areas. We then designed a light touch approach to enable lead service area lawyers to fine-tune the scope and definition of each activity to suit Telco, before inviting suppliers to provide prices for these 300 matter types.

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OMC also provided benchmark Menu Prices to allow Telco lawyers to compare firms’ fixed fee proposals to the market prices in-house teams are actually securing.  Telco lawyers could then identify what a ‘good’ price looked like for each of the 300 activities, selecting an appropriate supplier using a market example pre-set fixed price.

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Benefits

The result was an increase from 20 or so fixed price items to 300, and the identification of c.£500k+ cost savings based on market prices. Other benefits included helping our client’s in-house team:

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• demonstrate greater value to their internal business clients by improving cost certainty and budget setting

• collaborate with Telco Procurement to meet Telco’s wider cost objectives

• release substantial lawyer time from scoping/negotiation conversations both at the start of matters and when bills are received

• increased consistency of Pricing for all Telco internal clients