A reflection on provider selection, pricing, and the case for a broader legal services ecosystem

I am not a lawyer, but I have worked alongside and serviced the legal profession for more than 40 years.

I began as a paralegal before founding an eDiscovery business in the early 1990s. Back then, the work was predominantly paper-based and we called it document management. As documents became electronic, the industry became what we now know as eDiscovery. Today, I work for a global law company.

Across that career, I have watched legal work change dramatically. What has changed far less is how organisations decide who is permitted to perform that work, and how it is priced once it has been allocated. That brings me to legal panels. Panels are intended to simplify purchasing, manage risk, and create commercial discipline. They do all of that well. But if a panel is built almost entirely around traditional law firms, it may also narrow the solutions a legal team considers before the problem has even been properly defined.

Something We Work Around Rather Than Question

When our COO, Steve Harmon, recently visited Australia and met with corporate legal leaders, he was struck by how central law firm panels are to the way legal services are purchased here. For many of us, panels are simply part of the landscape. We work around them. We accept that certain firms are on the panel and others are not. We rarely ask whether the structure itself still serves the full range of needs within a modern legal department.

Why is the Australian market so committed to this model? Is it because panels consistently produce the best combination of capability, service, and value, or is part of the answer simply inertia? And are procurement teams always equipped to recognise which work could be delivered more effectively by a law company, a managed service provider, or a multidisciplinary team?

Those questions are deliberately direct. If corporate legal teams want different outcomes, it is reasonable to examine whether their purchasing structures allow genuinely different providers and delivery models to participate.

What Legal Panels Do Well

A well-run panel provides real benefits. It can establish agreed terms, rates, and service standards. It can reduce procurement time, consolidate spend, strengthen relationships, and give the organisation confidence that approved providers understand its business, risk appetite, and expectations.

Panels are often divided by practice area, geography, risk, or matter type. Firms are typically assessed through a tender or RFP process covering expertise, coverage, pricing, relationships, diversity, technology, reporting, and service capability. The General Counsel and senior legal team commonly lead the decision, often with legal operations, procurement, finance, risk, and business stakeholders.

None of that is inherently problematic. The concern arises when the category being procured is defined so narrowly that only one type of provider can qualify.

Who Is Invited to the Table

When a legal panel is established or refreshed, who gets the invitation? Is it limited to law firms, or are law companies, flexible resourcing providers, legal technology businesses, and managed service providers also able to participate? There are valid reasons why some work must be handled by a regulated legal practice. Organisations must consider privilege, professional obligations, insurance, confidentiality, conflicts, and accountability. Major litigation, complex transactions, and sensitive regulatory advice may require senior law firm leadership and specialist legal judgment.

But not every legal need is the same. Contract review, eDiscovery, remediation, high-volume claims, compliance programs, legal operations, technology implementation, and temporary capability gaps may benefit from a different combination of people, process, and technology.

Why should all of those needs be purchased through the same channel?

The Categorisation Problem

When a problem is categorised through the lens of traditional law firm providers, it is unsurprising that the answer is a traditional law firm delivery model. Identifying solutions that are not law firm-centric requires other categories of providers to be involved while the approach is being developed, not invited later to deliver a small component of a model that has already been decided.

This matters because one legal business problem may cross several internal purchasing categories. Legal advice may sit with the panel. Flexible talent may sit with procurement or HR. Technology may require IT approval. Managed services may be treated as outsourcing. eDiscovery may sit with litigation, investigations, or information governance. The organisation may see one problem, but its procurement structure divides the solution across different budgets, decision-makers, and provider lists. By the time providers are invited to respond, the range of possible answers may already be constrained.

Law Firms and Law Companies

Law firms and law companies often serve the same customers, employ people with similar expertise, and solve many of the same business problems. In that sense, they can look ‘same same’. But the structures and delivery models differ. A traditional law firm is organised around practices, partners, matters, and professional advice. Its core value lies in legal expertise, judgment, advocacy, and responsibility for legal risk.

A law company combines lawyers with legal operations specialists, technologists, project managers, consultants, and flexible talent. Work may be delivered through secondments, managed services, consulting engagements, technology-enabled workflows, or multidisciplinary teams. Neither model is inherently better, and the two are not always substitutes. In many matters, the strongest solution may involve both: a law firm providing strategic advice and oversight, supported by a law company delivering the people, process, technology and operational capability required to execute at scale. The important difference is not the label. It is how the work is structured, resourced, managed, and priced.

Is Australia Different?

The reliance on law firm panels is not uniquely Australian. Similar structures exist in the UK and the US, although the language and maturity of alternative legal services markets differ. In Australia, panels are particularly visible and formalised across corporations and government. Law companies may be engaged, but often through a separate procurement channel or as a subcontractor to a panel firm.

In the UK, traditional panels remain common, but broader legal service ecosystems have developed alongside them. Alternative business structures and non-lawyer ownership have supported businesses that combine legal advice, consulting, technology, operations, and managed services.

In the US, organisations often run preferred provider or outside counsel programs. Large legal departments can have sophisticated legal operations, vendor management, and billing functions, and may use law companies extensively while still reserving core outside counsel arrangements for law firms. The terminology varies, but the pattern is familiar: the traditional law firm panel remains the principal gateway for legal advice, while other capabilities are purchased elsewhere.

Panels Influence Pricing Behaviour

Legal panels do more than determine who receives work. They influence how customers and providers describe, compare, and price it. Hourly rates are negotiated, discounted, benchmarked, and compared firm to firm. Blended rates bring different levels of seniority into a single average. These mechanisms may improve transparency and control, but the hour remains the underlying unit of value. That matters because the panel process asks firms to compete within the same input-based framework. A firm may offer a discount, a blended rate, a volume arrangement, or an alternative fee for selected matters, yet the commercial architecture remains anchored to time.

The difficulty is that clients need lawyers who understand their business, exercise judgment, identify risk, and stand behind their advice. Is elapsed time the best proxy for that value? An experienced lawyer may resolve an issue quickly because they have spent 20 years developing the judgment required to do so. A less experienced lawyer may take much longer. A purely hourly model can reward the slower route, even when the outcome is the same. If panels keep comparing providers principally through rates and discounts, it becomes difficult to move toward pricing based on outcomes, scope, risk, service levels, capacity, or value delivered.

From Panels of Firms to Portfolios of Capability

Perhaps the answer is not to abolish panels, but to redesign them. A modern legal services portfolio could include law firms, law companies, specialist technology providers, flexible talent businesses, and managed service partners. Providers could be selected according to the nature of the problem, the risk involved, the capability required, and the outcome sought.

That requires legal, procurement, finance, operations and technology stakeholders to work together earlier. It also requires assessment criteria that compare more than hourly rates. Customers could evaluate delivery design, expertise, accountability, service levels, scalability, technology, data, continuous improvement, and measurable outcomes.

The starting question would no longer be, ‘Which law firm should receive this work?’ It would be, ‘What combination of expertise, people, process, and technology will deliver the best outcome?’ That question does not diminish law firms or lawyers. It recognises their value while creating room for other providers to contribute where their capabilities are better suited to the work.

The Question for Corporate Legal Teams

Legal panels were designed to create order, manage risk, and strengthen buying power. They should not become a barrier to the innovation, flexibility, and commercial change that General Counsel say they want.

Before the next panel refresh, it is worth asking:

• Are we buying a category of provider, or solving a legal business problem?
• Who is missing from the conversation when we design the solution?
• Are our evaluation criteria encouraging different delivery models, or asking every provider to compete within the same hourly framework?
• And if we want legal services to be delivered differently, are we prepared to invite different providers to the table?

With thanks to Steve Harmon, whose observations from his recent visit to Australia, and whose detailed review of this article’s content, shaped the central argument on the importance of legal panels.