How did GAMs come about?

GAMS came about after we won a tender to advise Tyco International on their outsourced legal work for Europe, the Middle East and Africa. The company were looking to replace 282 different law firms with just one. They wanted to develop a new business model for instructing lawyers, based on value for money, coverage and competency.

We pioneered GAMs within Eversheds. The intention was to provide the client with a system that could deliver control and visibility, and provide analysis of legal spend. This would enable the client to make strategic decisions about resource and trends in legal spend.

How does GAMs help clients?

Tyco’s internal legal team needed to establish to their own internal clients that instructing lawyers delivered value for money to the company. To do this they needed a combination of quality service and data to measure performance. This is what GAMs is designed to provide.

What data does GAMs deliver?

It probably produces more information on a client’s legal spend than they have ever had access to before – all available 24/7 via the web. GAMs isn’t about cutting the cost of external counsel. It’s about control and analysis. It is staggering how often something which is measured and controlled delivers an improvement in performance and value

GAMs can provide “maps” of legal spend or highlight spend by country, business unit, type of legal advice or partner time – the combinations are almost limitless. For example, companies can compare the cost of conducting litigation in Spain with other jurisdictions. In some cases, GAMs can be used to indicate whether legal work should be moved from a high to a low cost jurisdiction.

Going forward, it indicates which of a company’s business units are spending most money on outside counsel. This can indicate to the company’s legal department where additional legal training may be required. We want to help a company’s business units become more efficient in how they instruct lawyers.

Reducing a business’s appetite for legal advice is one of the key goals of GAM. Traditionally, this would have been counter-productive for a law firm stuck on hourly billing. However, GAMs gives such detailed information about spend and trends that it enables Eversheds to work in partnership with its clients. This allows us to move away from hourly-based billing, to rewarding behaviours – which benefit the client. Examples of this could be bonuses for reducing the number of litigation cases.

Once we have collated between 6–12 months worth of a company’s billing information, we can begin to predict their future legal spend. Armed with this information, we can begin to become more imaginative in terms of alternative billing arrangements, such as blended, fixed or capped fees.

What else does GAMs offer?

For companies who want it, GAMs also provides an online approval mechanism, which allows the company to approve any piece of legal advice before it is started. This gives them far more control over their budget than they have ever had before. We have incorporated all the principles of DealTrack and Rapid, which Kevin Doolan talked about in issue two, to provide clients with reliable estimates on every matter we deal with.

The system operates across all of Eversheds’ international offices. Everyone working with Eversheds knows that, if the client wants this level of control, they must use the GAMs methodology – or they will not be paid for any legal work they do.