I have previously posted about General Electric’s experiments to use auctions to buy legal services. The experiment seems to be a success.
In “General Electric names 37 firms for UK panel launch,” LegalIT reported on January 19th that in the UK, GE selected 37 firms for £30m of work based on an online auction. “The review saw firms bid against each other in real time for mandates, primarily on price. A GE spokesman said: ‘[Using the new system] means we have appointed the best possible counsel at the best prices.’ ”
Apparently at least one lawyer is upset that some firms started their bids high and then matched subsequent lower bids. Oh horrors! Price competition in legal services! It could get worse; LegalIT reports that “the auction system is now being introduced to other parts of GE’s European business, with a national review currently underway in Spain.”
As I have argued previously, as competition and pricing pressure increases, forward-thinking law firms will look more to technology to lower costs and improve their ability to deliver service.