Succeeding with Vendors

Saturday, 19 July 2008 8:06PM

Succeeding with Vendors

SUCCEEDING WITH VENDORS

The issues facing inhouse legal departments.

Following on from defining the problem to be solved, the next most pressing issue facing legal department project managers faced with implementing legal technology is selecting the vendors who will help you solve those problems you identified.

Selecting a vendor or vendors to tackle your project seems a simple enough task. You look for an application that appeals to your eye, produced by a vendor with whom you have established an amicable relationship and whose product fits your price range. Of course the offering should have the functional capability to solve your problems as well but that is where it all starts to get tricky.

In the last issue we briefly explore a few of the pitfalls of vendor selection and how to avoid them. The key point to remember is that you are being sold to by your vendor. They are not trying to do you a favour and they are not your friend when it comes to solving your company’s problems. They are merely a source of possible help and it is your responsibility to separate the wheat from the chaff and serve your user’s interests – nothing more.

Pitfall #1 – Mass appeal

Most application providers do one or two things well. This is particularly true of smaller applications vendors as they only have the resources to focus in one or two key areas. Moreover, smaller vendors are typically more customer focused developers, which equates to solving customers’ core problems. This naturally translates into the development of select functional areas in which they have been encouraged to focus. Conversely, features addressing many disparate functional areas may show well but are likely to perform poorly.

In reality application providers who attempt to focus in many areas, trying to appeal to a broader market, typically do none or few of them well. One solution cannot be all things to all customers. So, while purchasers of systems from small vendors that have wide ranging functionality may get a lot of functional spin for their money, the functionality they get is not always worth the money they spend. Vendors who focus their businesses and software on specific areas will almost always be more competent in those areas and their client base will reflect it. These are precisely the reasons that niche and emerging markets tend to spawn competition from vendors who appear but then quickly disappear.

Legal is one of those markets. Eager to gain clients and grow, smaller vendors develop 'showy’ functionality rapidly (particularly in today’s world of rapid development tools) hoping to use quick hit sales to fund further development of their software. In essence they are ‘robbing Peter’ to pay for real development of the features they showed and sold but which were only barely real. This is the nature of most start-up software developers and it is of greatest risk to buyers at the mercy of their sales people.

Admittedly this is the way most non-dotcom era vendors build up their market share but the risks to the market, to buyers and to the unwary project manager can be crippling. The most sensible way to mitigate this risk is to look for successful vendors. The longer the period of success, particularly with companies like your own, the more likely that your implementation will be a success as well. Nothing breeds success like success.

Pitfall #2 – Too good to be true

Many of us receive offers in the mail for free products or services and simply toss them into the bin. When a telemarketer calls our natural response is a polite ‘no!’ or to hang up the receiver. When we are told that we will get not one but three-for- the-price-of-one we instantly sense we are about to be had. Yet all too frequently managers fall into this same trap and find themselves two years into an implementation project and feeling like they want to sell their legal technology kit at the next car-boot sale.

The first thing to remember here is that no legal technology is ever free; someone always pays. It may be your department, your law firms, or your company but the vendor will always get paid. This is a fundamental of business – a vendor must get paid for their products or services.

If law firms pay for your technology, you should remember that they too are in business to make money. Unless there is a fair return on the firm’s investment in helping pay for your technology, it is likely that somewhere deep inside some yet-to-be delivered invoice will be some part of the price they had to pay to help you. This is not law firm treachery, this is sound business. You pay for value received and charge for value given.

Wrapped into this too good to be true analogy is that every vendor has skeletons in their applications closet. The nicely choreographed product demonstration you see is never the entire story. In fact here I offer Hodge’s First Law of Application Selection namely: the usefulness and viability of any legal vendor or any legal application is directly proportional to the number of clients and users of that technology. In other words, an application is only as good as the number of customers that have already bought it and the number of users that run it. In this sense, customers always get what they pay for with legal technology. Or, as the commercial once said: ‘you can pay me now, or pay me later.’ There are no free lunches, only unwary project managers to be taken to lunch.