Business of Law

How GlaxoSmithKline changed the way it buys legal services (video)

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Silvia Hodges Silverstein, adjunct professor at Columbia Law School, and Heidi Gardner, assistant professor at Harvard Business School talk with Bloomberg Law’s Lee Pacchia about how pharmaceutical giant GlaxoSmithKline introduced procurement practices into its retention of outside counsel.

Silverstein describes GlaxoSmithKline’s sourcing room events, which firms are invited to after the RFP submissions. “The quality has been decided at that point in time, so it’s not anymore that you choose between firms who are higher in quality and lower in quality. GlaxoSmithKline at that point in time sees that they’re all pretty much at the same level, so then it really becomes a matter of price,” she says. “And then when the sourcing event is over, then the procurement takes all this information back to the in-house counsel, they can look at all this information. And sourcing makes some suggestions, but it’s actually the legal department, the in-house lawyers, who make the final decisions. So, procurement is really there to help them speed up the process and help them make it more efficient and more objective.”

In response to Pacchia’s question about how the new process could hamper the company’s response time to a critical legal matter, Gardner says it’s not a huge concern. “I think they’re smart enough not to be slaves to the system,” she says. “This system is not meant to replace judgement and wisdom. And I think they’ll veer off the track if they absolutely need to. That said, the system is robust enough that they can gear it up and gear it back, depending on the needs of the matter. And so I think they can move very quickly with this kind of system, if the case demands it.”

See the video interview here.

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