04 Jul 2022

Why law firms should be celebrating independence on 4 July

Don’t assume consultants’ advice is unfettered by supplier relationships, warns Paul Longhurst of the ‘fiercely independent’ 3Kites

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fran_kie; Shutterstock

When a law firm engages a consultancy like 3Kites, it may not consider if the advice is unfettered by any of the potential suppliers that are going to be evaluated, assuming that this would be the case for all advisors. 
 
One of our alumni, Duncan Ogilvy, told us that he made this assumption when he was managing partner at regional law firm Mills & Reeve and was surprised to find out later that this was not always the case. 
 
For the record, 3Kites is fiercely independent with no formal or informal connection to any of the products or vendors we evaluate, allowing us to provide clients with advice and product recommendations which are matched to their needs rather than a finder's fee.
 
It is important to note that we are not unique in this position, but neither is it the default for all consultants.
 
For those that are not independent, some may be transparently tied to suppliers of products, acting as resellers or as implementors. Others may claim independence but have consultants who are trained to work with specific products – the problem here is that any product evaluation is likely to favour a product where additional, specialist services can then be offered. This is a key point as the client’s needs must always be the primary consideration for a truly independent consultant, both consciously and unconsciously.

Client’s needs must always be the primary consideration for a truly independent consultant

Why am I telling you this? Partly, it is out of self-interest. If a product-aligned consultant is getting a finder's fee without making this clear, it can provide lower costs to undertake an evaluation which requires less due diligence as the outcome is known at the start. We take the time to understand the needs of our clients and then to identify the best fitting solution which is likely to take more time (= cost) but can make the difference in terms of a successful outcome.


Click here to read the first seven columns in the Navigating Legaltech series


We spend a lot of time understanding the products available on the market and have good relationships with suppliers, but are rigorous in ensuring there is no commercial arrangement which could prejudice our independence.
 
What should you do as a law firm looking for independent advice? Explicitly ask your consultants to give you an undertaking that their advice is matched to your needs and that selections will not result in a payment from any supplier.
 
There is nothing wrong with a consultant receiving payments from suppliers, or with having individuals trained to provide follow-on services for particular suppliers, as long as this is clear to all of its clients so that they have the chance to decide if that is the right route for them. In some cases, it will be… but that must remain the client’s choice.

Paul Longhurst is a director of 3Kites. This is the eighth article in the series Navigating Legaltech, written by 3Kites and Kemp IT Law in partnership with The Global Legal Post


About 3Kites and Kemp IT Law
3Kites is an independent consultancy, which is to say that we have no ties or arrangements with any suppliers so that we can provide our clients with unfettered advice. We have been operating since 2006 and our consultants include former law firm partners (one a managing partner), a GC, two law firm IT Directors and an owner of a practice management company. This blend of skills and experience puts us in a unique position when providing advice on IT strategy, fractional IT management, knowledge management, product selections, process review (including the legal process) and more besides. 3Kites often works closely with Kemp IT Law (KITL), a boutique law firm offering its clients advice on IT services and related areas such as GDPR. Where relevant (eg when discussing cloud computing in a future article) this column may include content from the team at KITL to provide readers with a broader perspective including any regulatory considerations.
 

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