Discuss The Global External Legal Relations Team: A Procurement Approach for Professional Services.
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The Global External Legal Relations Team: A Procurement Approach for Professional Services
Introduction
Procuring professional services has become an increasingly important issue for companies in various industries, including healthcare, finance, and technology. In particular, companies are seeking to optimize their procurement processes for legal services, given the high costs and complex nature of legal work. One company that has successfully implemented a new procurement approach for legal services is GlaxoSmithKline (GSK), a global pharmaceutical company headquartered in the United Kingdom.
GSK’s Global External Legal Relations Team (GELRT) was created in 2013 with the goal of improving the efficiency and effectiveness of the company’s legal services procurement process. The GELRT approach involves centralizing the management of legal services procurement and using a range of metrics to evaluate the performance of external legal service providers. Since its implementation, the GELRT approach has led to significant cost savings for GSK, while also improving the quality and consistency of the legal services provided to the company.
The success of the GELRT approach raises important questions about the applicability of this procurement approach to other professional services, as well as the key elements required for success in other departments within GSK. Furthermore, it highlights the need for companies to use appropriate metrics when selecting and evaluating professional service providers, and the potential benefits of collaboration between in-house counsel and procurement. Finally, the GSK case also raises important questions about why law firms would choose to participate in a company’s sourcing event, and what the long-term benefits might be.
The purpose of this paper is to explore these issues in more detail, drawing on the GSK case and existing literature on professional services procurement. Specifically, the paper will be structured as follows:
Section 1 will examine the applicability of the GELRT approach to other professional services outside of legal services, and will identify the key factors that determine the transferability of this approach to other industries.
Section 2 will analyze the elements that must be in place in other GSK departments to ensure the success of new procurement processes, and will discuss the risks and challenges that may arise during the implementation process.
Section 3 will focus on the metrics that companies should use to select professional service providers and to evaluate their performance after selection. This section will compare various metrics used in the industry and their effectiveness.
Section 4 will examine how in-house counsel might react to collaboration with procurement for professional service procurement, and will explore the potential benefits of collaboration and the challenges that might arise.
Section 5 will analyze the reasons why law firms would choose to participate in a company’s sourcing event, and what the long-term benefits might be for the firms.
Overall, this paper seeks to provide a comprehensive analysis of the GELRT procurement approach and its potential applicability to other professional services. By examining the key elements required for success, identifying the appropriate metrics to use, and exploring the potential benefits of collaboration between in-house counsel and procurement, this paper aims to provide insights that will be valuable for companies seeking to optimize their procurement processes for professional services.
Section 1: Applicability of GELRT to Other Professional Services
The Global External Legal Relations Team (GELRT) is an innovative approach to legal services procurement that has been highly successful for GSK. However, the question remains as to whether this approach can be applied to other professional services, beyond legal services. In this section, we will explore the applicability of GELRT to other professional services, and consider the potential benefits and challenges of adopting a similar approach.
The GELRT approach is characterized by a highly centralized and strategic approach to legal services procurement, which involves a dedicated team of procurement and legal professionals who work together to identify and select external legal service providers. This approach has several key elements that are central to its success, including:
A focus on strategic partnerships: GELRT prioritizes long-term relationships with external legal service providers, rather than short-term or transactional engagements. This allows the team to build a deep understanding of the firm’s legal needs and priorities, and to identify external providers that can deliver high-quality legal services over an extended period of time.
A data-driven approach to procurement: GELRT uses a range of data and analytics tools to evaluate external legal service providers, including metrics related to pricing, efficiency, and quality of service. This allows the team to make informed decisions about which providers to select, and to negotiate more favorable pricing and service terms.
A commitment to diversity and inclusion: GELRT places a strong emphasis on diversity and inclusion in its procurement process, and seeks to identify external legal service providers that have strong track records in this area. This includes a focus on the representation of women and minorities in leadership positions, as well as a commitment to hiring diverse teams of legal professionals.
While the GELRT approach has been highly successful for legal services procurement, it is not clear whether this approach can be applied to other professional services. There are several potential challenges and risks associated with applying this approach to other service areas, including:
Variability in service quality: Different professional service areas have different levels of standardization and regulation, which can make it more difficult to assess and compare service quality. This could make it harder to identify high-quality service providers and negotiate favorable pricing and service terms.
Differences in pricing models: Professional service providers may use different pricing models and fee structures, which can make it more difficult to compare pricing and evaluate the cost-effectiveness of different providers. This could make it more challenging to achieve cost savings through strategic procurement.
Limited focus on diversity and inclusion: While diversity and inclusion are important considerations in many service areas, they may not be as central to procurement decisions as they are in legal services. This could make it more challenging to identify and select diverse service providers, and to ensure that diversity and inclusion are embedded throughout the procurement process.
Despite these challenges, there are also potential benefits to adopting a GELRT-style approach to other professional services. These benefits could include improved quality of service, greater cost savings through strategic procurement, and a more diverse and inclusive pool of service providers.
Overall, while the applicability of GELRT to other professional services remains an open question, there are clearly potential benefits and challenges associated with adopting a similar approach. As companies seek to improve their procurement processes and build strategic partnerships with external service providers, the GELRT model could serve as a valuable source of inspiration and guidance.
Section 2: Elements Required for Success in Other GSK Departments
In order to successfully implement the GELRT approach in other departments at GSK, there are several key elements that must be in place. These elements include:
A clear understanding of procurement objectives: The first step in implementing a successful procurement process is to have a clear understanding of the department’s procurement objectives. This includes identifying the specific needs and priorities of the department, as well as any regulatory or compliance requirements that must be met.
Strong internal collaboration: The success of the GELRT approach is due in large part to the collaboration between procurement and legal teams. In order to implement a similar approach in other departments, it is essential to establish strong collaborative relationships between procurement and other functional areas, such as finance, IT, and human resources.
Data-driven decision-making: The GELRT approach relies heavily on data and analytics to evaluate service providers and negotiate favorable pricing and service terms. In order to successfully implement a similar approach in other departments, it is essential to establish robust data collection and analysis processes, as well as to provide training and support to staff to ensure they are comfortable working with data.
Strong supplier relationships: Like the GELRT approach, successful procurement in other departments relies on building strong relationships with suppliers. This includes identifying and selecting suppliers that are a good fit for the department’s needs, as well as establishing open lines of communication and regular feedback mechanisms to ensure the relationship remains strong over time.
While these elements are essential for success in implementing a GELRT-style approach in other GSK departments, there are also several risks and challenges that must be considered. These include:
Resistance to change: Implementing a new procurement process can be challenging, particularly if it involves significant changes to existing practices and procedures. Resistance to change can come from both internal staff and external suppliers, and it is important to have a robust change management plan in place to address this risk.
Variability in service quality: As noted in Section 1, different service areas may have different levels of standardization and regulation, which can make it more difficult to assess and compare service quality. This could make it more challenging to identify high-quality service providers and negotiate favorable pricing and service terms.
Lack of internal expertise: Implementing a successful procurement process requires specialized knowledge and skills, particularly in areas such as data analysis, contract negotiation, and supplier relationship management. If the department does not have staff with these skills, it may be necessary to invest in training or hire external consultants to provide support.
Overall, while implementing a GELRT-style approach in other departments at GSK may be challenging, it is also a valuable opportunity to improve procurement processes and build stronger relationships with external service providers. By identifying the key elements required for success and addressing potential risks and challenges, GSK can continue to drive innovation and excellence in procurement across the organization.
Section 3: Metrics for Selecting and Evaluating Professional Service Providers
When selecting and evaluating professional service providers, it is essential for companies to use a set of metrics to ensure they are making informed decisions and driving value for the organization. In this section, we will discuss some key metrics that companies can use to select and evaluate service providers.
Quality of service: One of the most important metrics for selecting and evaluating service providers is the quality of the services they provide. This includes assessing the service provider’s expertise, experience, and reputation in the industry. Companies can use a variety of methods to assess service quality, including conducting reference checks, reviewing case studies or client testimonials, and seeking out industry awards and recognition.
Cost: Cost is another important consideration when selecting and evaluating service providers. Companies should seek out providers who offer competitive pricing while also delivering high-quality services. This requires a careful balance between cost and quality, and companies should be willing to invest in higher-priced service providers if they offer a better overall value proposition.
Service level agreements (SLAs): SLAs are an important tool for setting expectations and ensuring accountability when working with service providers. SLAs should clearly define the services being provided, the expected level of service quality, and the consequences for failing to meet these standards. SLAs can help ensure that service providers deliver on their promises and provide a consistent level of service over time.
Cultural fit: Cultural fit is an often-overlooked metric when selecting and evaluating service providers, but it is essential for ensuring a productive and effective working relationship. Companies should seek out service providers who share their values and culture, and who are willing to work collaboratively to achieve shared goals.
Innovation and thought leadership: Another important metric for selecting and evaluating service providers is their ability to innovate and provide thought leadership in their field. Companies should seek out service providers who are willing to challenge conventional thinking and offer new and innovative approaches to solving problems.
Once service providers have been selected, it is also important to establish a set of metrics for evaluating their performance over time. These might include:
Timeliness of delivery: Companies should assess whether service providers are able to deliver their services on time and within the agreed-upon timeframe.
Service quality: As noted above, service quality is a critical metric for evaluating service providers over time. Companies should monitor service quality and provide feedback to service providers to ensure that they are meeting expectations.
Cost: Companies should track the cost of services provided by service providers and assess whether they represent a good value proposition.
SLA compliance: Companies should monitor whether service providers are meeting the expectations set out in their SLAs and take action if necessary to ensure compliance.
Customer satisfaction: Finally, companies should seek out feedback from internal stakeholders who work with service providers to assess overall customer satisfaction. This feedback can help identify areas for improvement and ensure that the company is getting the best possible value from its service providers.
By using these metrics, companies can select and evaluate professional service providers in a way that drives value for the organization and helps build strong, productive relationships with external partners.
Section 4: Collaboration between In-House Counsel and Procurement
Collaboration between in-house counsel and procurement is critical for the success of any new procurement process, including the Global External Legal Relations Team (GELRT) approach used by GlaxoSmithKline (GSK). In this section, we will explore the challenges and benefits of collaboration between these two departments.
Challenges:
Different goals and priorities: In-house counsel and procurement often have different goals and priorities. While in-house counsel is focused on ensuring legal compliance and mitigating legal risks, procurement is focused on cost reduction and maximizing value for the organization. This can create tension and conflict between the two departments.
Lack of understanding: In-house counsel and procurement may not have a clear understanding of each other’s roles and responsibilities, which can lead to miscommunication and misunderstandings.
Resistance to change: Collaboration requires a willingness to change and adopt new approaches. Some individuals within both departments may be resistant to change and may prefer to stick with the status quo.
Benefits:
Improved outcomes: Collaboration between in-house counsel and procurement can lead to improved outcomes for the organization. By working together, the two departments can identify opportunities for cost savings and risk mitigation that might not have been apparent if they worked in isolation.
Greater efficiency: Collaboration can also lead to greater efficiency in the procurement process. By working together, in-house counsel and procurement can streamline processes, reduce duplication of effort, and eliminate inefficiencies.
Stronger relationships: Collaboration can help build stronger relationships between in-house counsel and procurement, which can lead to more effective communication and better outcomes over time.
To overcome the challenges and reap the benefits of collaboration between in-house counsel and procurement, it is important to establish clear lines of communication and build trust between the two departments. This might involve:
Regular meetings: Regular meetings between in-house counsel and procurement can help ensure that both departments are aligned on goals and priorities.
Cross-training: Cross-training can help in-house counsel and procurement develop a better understanding of each other’s roles and responsibilities.
Joint projects: Joint projects, such as the GELRT approach used by GSK, can provide an opportunity for in-house counsel and procurement to work together and build trust.
Clear processes: Clear processes for decision-making and dispute resolution can help ensure that collaboration between in-house counsel and procurement is effective and efficient.
By overcoming the challenges and building a collaborative relationship between in-house counsel and procurement, companies can ensure the success of new procurement processes like the GELRT approach used by GSK. Collaboration can lead to better outcomes, greater efficiency, and stronger relationships between departments, all of which contribute to the overall success of the organization.
Section 5: Benefits of Participating in GSK’s Sourcing Event for Law Firms
GSK’s sourcing event for legal services is a unique opportunity for law firms to build relationships with the company and potentially secure long-term business. The event is typically held every three years, and involves a competitive bidding process among pre-selected law firms. The firms are evaluated based on a range of criteria, including their expertise in relevant areas of law, their pricing models, and their commitment to diversity and inclusion.
Participating in GSK’s sourcing event can provide several benefits for law firms, including:
Access to a large and prestigious client: GSK is one of the largest pharmaceutical companies in the world, with a presence in over 150 countries. Participating in the company’s sourcing event can provide law firms with access to a significant and prestigious client, which can enhance their reputation and potentially lead to other business opportunities.
Opportunities for long-term relationships: GSK’s sourcing event is designed to identify law firms that can provide high-quality legal services over an extended period of time. As a result, successful firms are likely to secure long-term contracts with the company, providing a stable source of revenue for the firm.
Exposure to other potential clients: Participating in GSK’s sourcing event can also provide law firms with exposure to other potential clients in the healthcare industry. GSK’s sourcing event is widely publicized and attended by representatives from other pharmaceutical companies and healthcare organizations, providing an opportunity for law firms to showcase their expertise and potentially secure new clients.
Insights into best practices for legal services procurement: GSK’s sourcing event is widely regarded as a leading example of best practices for legal services procurement. Participating law firms can gain valuable insights into the procurement process and the criteria used to evaluate potential service providers, which can be applied to other clients and industries.
However, participating in GSK’s sourcing event also comes with some potential challenges and risks. For example, the competitive bidding process can be time-consuming and costly for law firms, particularly if they do not ultimately secure a contract with the company. Additionally, the rigorous evaluation criteria used by GSK may not align with the priorities and strengths of all law firms, which could limit their chances of success in the bidding process.
Despite these challenges, the potential benefits of participating in GSK’s sourcing event for law firms are significant. By securing a contract with a large and prestigious client, building long-term relationships, and gaining exposure to other potential clients, law firms can position themselves for sustained growth and success in the competitive field of professional services.
Conclusion
In conclusion, the Global External Legal Relations Team (GELRT) at GlaxoSmithKline (GSK) has successfully implemented a procurement approach for legal services that has yielded significant cost savings and improved service quality. This paper has explored the applicability of this approach to other professional services, the key elements required for its success in other GSK departments, the metrics that companies should use to select and evaluate professional service providers, the potential benefits of collaboration between in-house counsel and procurement, and the benefits of participating in GSK’s sourcing event for law firms.
Overall, this paper suggests that the GELRT procurement approach could be adapted to other professional services and industries, provided that certain key elements are in place, such as strong leadership, effective communication, and appropriate metrics. Collaboration between in-house counsel and procurement can also be beneficial for both parties, although it may require overcoming some initial resistance.
Finally, law firms should seriously consider participating in GSK’s sourcing event, as it could lead to long-term relationships with the company and other potential clients. In summary, the GELRT procurement approach provides a valuable case study for companies seeking to improve their procurement processes for professional services, and there is significant potential for further research in this area.