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How to reduce the number of law firms you retain — a convergence project

A number of posts on this blog have addressed aspects of convergence, but none of them have explained how best to accomplish it (See my post of Feb. 18, 2008: reprise of convergence and references cited.). Here are seven steps that cover one set of choices.

1. Start with a list of all the law firms your department paid during the most recent fiscal year (See my post of Aug. 21, 2005: what drives up the number of firms retained.). Then gather the amounts paid to them and in a table break out those amounts by areas of law.

2. Ideally, create the same table for the previous two fiscal years (See my post of Aug. 21, 2005: consistent use of law firms over time.).

3. Study the tables and pick out those areas of law which, in proportion to dollars spent, have more law firms. Those are your targets (See my post of Dec. 19, 2006: give a firm enough work.).

4. One approach is to speak with the two or three firms that handle the most work in an area of law and negotiate arrangements to concentrate your work on them.

5. Another approach is to conduct a competitive bid process to select firms (See my post of May 21, 2007: bidding vs. auctions and references cited.).

6. Once you select the firms, decide what matters currently underway might be transferred (See my posts of July 21, 2006: disputes putative losses from transition to a new firm; Aug. 14, 2005: costs of transferring matters underway; and Sept. 3, 2006 and Dec. 4, 2006 generally on the transition of pending matters.).

7. Monitor whether work is indeed going to the preferred providers (See my post of June 18, 2007: eleven panels and references cited.). A goal might be to spend approximately 80 percent of your outside counsel fees on the converged firms (See my posts of March 24, 2005: concentrate spend rather than converge; and Jan. 21, 2008.).