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The law firm panel starts with good intentions: the GC of a large company looks at the number of firms retained each year, realizes how fragmented the company’s spend is and reacts by kicking off a firm consolidation initiative. Everybody jumps on board, sweeping in the head of legal operations, senior lawyers, support staff, and perhaps finance and procurement. Several months (or a year) later, the legal team anoints a “preferred provider panel” of a smaller number of firms, and looks forward to deepening relationships, marked by eager and responsive service and across-the-board savings.

According to the latest data from the GC Thought Leaders Experiment, that’s not how things typically work out. To the contrary, looking at law firm performance on over 1,400 actual legal matters for 28 large companies, law firms on client panels don’t appear to excel. While panel firms perform well on a client’s legal matters, they don’t outperform the same client’s non-panel firms. In the graph below, we see that non-panel firms perform slightly better than panel firms on all key criteria.

While the statistical significance of these gaps is minimal, the overall trend of overperformance by non-panel firms can’t be ignored. At the very least, it’s clear that panels are not delivering on their promise.

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