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The lawyer/client relationship has just gotten a little more impersonal. Where outside counsel once solicited business over long dinners and endless rounds of golf, one company has decided that Internet chat rooms and online auctions will work just as well. In a September letter to many of the nation’s largest law firms, GE Commercial Finance general counsel J. Keith Morgan invited them to participate in a Web-based competitive bidding process. The auction (scheduled to be completed by early December) was hosted by Procuri.com, which describes itself as a provider of “self-service strategice-sourcing solutions.” Different online “competitive bidding rooms” were set up for each area of expertise. Large firms were invited to compete in multiple bidding rooms. Morgan’s letter added, “Our ultimate goal is to create a shortlist of approved law firms in each competitive bidding room that will handle all of [GE Commercial Finance's] legal work for a two-year period starting in January 2004.” GE Commercial Finance spokesman John Oliver declined to comment on the ongoing process. The company � a division of General Electric Company � is a leading provider of financing and leasing for aircraft and capital equipment. According to spokeswoman Andrea Soltysiak, Atlanta-based Procuri.com has previously hosted online “events” for companies needing lawyers to handle bankruptcy or due diligence matters. Procuri.com’s customers have saved an average of 24 percent, she says. “Our philosophy centers on the cornerstone that companies can auction any material or service, as long as it’s [in] a competitive marketplace,” Soltysiak adds. As unorthodox as an online legal bidding process may appear, many law firm partners say GE Commercial Finance’s approach is only the most extreme illustration to date of how corporations view lawyers as being just as interchangeable as any other outsourced service provider. Indeed, many law firms already take part in a form of off-line bidding, since they routinely receive requests for proposals (RFPs) from companies. Firms frequently respond with offers submitted via post or e-mail. The managing partner at one firm says the hiring process has become so impersonal that he sees little difference in moving it to the Internet. (He, as well as every other law firm attorney interviewed for this article, declined to be identified.) “Instead of sending an RFP, they do it online,” he says. “What’s the difference? One way involves a lot fewer dead trees.” This partner adds that companies will probably prescreen the firms they invite to bid online, in order to ensure that each one can do the job. “I think it will work out fine,” he says. A partner at another firm has greater reservations about electronic auctions. “Cost and value are not always the same thing,” according to this partner, who was invited to take part in GE Commercial Finance’s event. “The problem with competitive bidding is it assumes all lawyers are created equal, and they’re not,” he adds. “[Auctions] tend to create a lowest common denominator. They don’t value relationships. They don’t value unique skill sets.” However, this partner thinks it’s “unfortunate but inevitable” that corporations will use the same approach that they take with other service vendors. The GE Commercial Finance bidding process did include questions that covered noneconomic reasons for selecting a law firm. According to one of its examples, the company would consider a firm’s expertise, support capabilities, and conflicts in addition to hourly rates.

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