There is too much secrecy around panels

It's now more than a decade since major plcs began using the panel model to manage their relationships with law firms. As Legal Week has noted before, despite the rapid adoption of the model in Europe, it has plainly failed to deliver on one of supposed benefits: securing value and containing fee inflation. Obviously, clients are now robustly acting to gain better terms from legal advisers but that has precious little to do with panels – in most cases it is due to the recession and pressure from chief executives and finance directors.

But value aside, how successful has the basic model been at improving the process of buying legal services? Talking to law firms, it's obvious that they have a growing list of gripes with panels. For an industry that had grown used to high demand and little pricing pressure from clients, many of these complaints can be roundly dismissed. But not all of them. Some clients still seem to delight in tying advisers up in pointless process with little sense of obligation to actually send work to law firms that have made substantial commitments and spent considerable amounts of money winning a place on the panel. There are also instances where the combination of sprawling panels and tough non-compete clauses looks like clients pushing their luck.

Considering these issues, it is striking how little the debate has moved on regarding how major companies should manage legal service procurement, whether the model is defined as a panel, preferred advisers or whatever. We seem no closer to a best practice guide or even a set of commonly-accepted ideas that could make the process work better for both sides. Anecdotally, from discussions with senior lawyers, it is clear that some companies have developed sophisticated and effective tools to review legal services, while some are pretty cack-handed. Yet separating the good from the bad remains extremely difficult given the cloud of secrecy that hangs over many of these reviews. I guess some would respond that clients are entitled to confidentiality regarding their advisers. But we are talking about the broad terms on which advisers are engaged, not the substance of the advice given. And, since buying legal services isn't clients' actual purpose, this is hardly protecting commercially sensitive information.

What the lack of openness has contributed to is holding back the debate over how companies buy their legal services, something which clients in general could benefit from. It also denies the better-organised clients the chance to get better terms as most advisers would rather work for clients who are both reasonable and know what they are doing. Clients have been right to push advisers for more transparency but sometimes they should take their own advice.