Why law firms should be celebrating independence on 4 July
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 implementers. 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.
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.
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.
If you have any questions about how 3Kites' can assist your firm then please contact Laura.Howells@3Kites.com