Legal businesses occasionally make the wrong decision on the choice of supplier when buying new technology. This may be evident immediately when getting grips with the new tech, or an increasing dissatisfaction over time following persistent poor performance. Causing frustration, possibly even a few angry words, and at the very least disappointment that something like this has happened.
Read our practical guide NOW, to discover tried and tested remedies to address the situation, irrespective of any feathers that have been ruffled.
What exactly is poor supplier performance?
Rod Linsey reports on the Gatekeeper blog, that poor supplier performance: "…can be defined in many ways. As a general concept it is typically anything related to a service delivery failure of some kind that has, or has the potential to have, an unacceptably detrimental effect on the organisation."
He adds that risk analysis can be a good indication of performance in the early stages of a relationship with the supplier, and the points where this will be likely to occur.
There are examples too of when you can't blame the supplier for things going wrong. Situations may happen that frustrate the contract, which are beyond the supplier’s control. Such as flooding; fire, or war. When "the best anybody can do is to be as prepared as practicable, expect the unexpected, react quickly and minimise the damage."
Is it a case of better the devil you know?
If there is a chance that matters can be resolved, only you can decide on whether it is worthwhile trying to sort things out; or preferable to cut your losses – getting out of contract as quickly as possible, in the hope of finding something better. Checking your written agreement for a clause allowing an early exit is the first step to take. Or if the dispute could potentially lead to arbitration or litigation, you have sufficient reason for leaving.
Again, obvious as it sounds, thinking everything through beforehand can pay dividends in the long run. However tempting it might be to rush into a heated discussion with the supplier, all guns blazing. Understandably so if the list of complaints you have is endless: The system took longer than you thought to install; your team has lost valuable time in trying to get to grips with it, and this is when alarm bells really began to ring, your profit cost figures have fallen. Whilst all of it is down to the supplier’s underperformance, and poor quality standards.
However, are you sure that this really is the case?
As a legal manager you may also be a trained mediator, so appreciate the value of taking one step back now to gain more ground later. Even if you aren't, there are two sides to every story.
Why not discuss this in more depth with your lawyers, and support staff first? Possibly ask them to provide a written account of their experiences in working with the product supplied. If for example, it is a case management system, they will presumably have also been using it to try and sort the problems out, and can give you specific examples of exactly what they believe has gone wrong.
You may find the following questions helpful to ask all those involved in trying to mitigate your losses at this early stage:
- How do your lawtech users feel about having more training, to help them use the system correctly, and optimally? Or, do they believe this will be a waste of time, since for example, so much is incompatible with the processes you use? Or, perhaps, it clearly doesn't deal with the more mundane, albeit essential time-consuming jobs, like effective onboarding.
- Are your employees' concerns justified? The reasons given could be due to something else. A fall in profit costs could be because of them trying to handle a heavier caseload than usual and meet key dates when a colleague has left the department.
- Remember that you get what you pay for! Are you expecting the software you bought to be all singing and all dancing, when its functionality doesn't allow it to do everything that you want it to? The sort of service you are looking for attracts a premium price, which you aren't currently paying.
- Is this only a temporary blip, and possibly even an industry standard? Making it too soon to form a view that things aren't going well. Maybe your staff need longer to settle into using the new system, before you come to any conclusions on how well it is working?
- What is your relationship with the supplier like? Are they slow in answering your calls for assistance? You may have got the impression by now that all they were interested in was making the sale, aren't particularly good at after-sales service, or may actually be in financial difficulty. Even facing insolvency.
- Maybe the person you appointed to deal with the supplier isn't the right one for the job. Does he or she fully understand the issue(s), and the supplier's position, or is it something outside his or her remit? Has there been a clash of personalities, and making a change here could allow things to run more smoothly in the future?
Contract turnaround or termination can be a difficult choice
Before committing to that decision to fight on or ‘tear up the contract’, there are a number of other resources you might like to consider which contain useful information.
Stephen Dilley, the commercial litigation partner at Womble Bond Dickinson, produced a two-part Guide in 2017 on how to manage underperforming contracts which is still relevant today.
Part 1 of which addresses turning the situation around. In addition to the points mentioned earlier, he makes the suggestion that if there is a dispute resolution clause in the parties' contract this could be used. If all else fails Part 2 gives an exit plan, and dives into possible termination strategies. Also, some other helpful questions to ask in moving forward with a new contract.
Do you have a contract management system?
Melanie Chan and the team from Unleashed Inventory Management Software recommend setting up a contract management system, to help manage agreements made with suppliers.
As, for each agreement, this can "keep both the supplier and buyer organised. It puts both parties on the same page, and provides a detailed level of contract visibility. If a contract isn't fulfilled and the supplier is underperforming, this can be a wake-up call for both parties."
Again the contract can provide guidance, and help both parties understand their rights, so "from the beginning, both sides should outline what their contractual obligations are to each other."
Later, in a 2nd article dated 10th October, 2019 she states that:
"Communication between the buyer and supplier should be straightforward and effective to ensure that any issues are dealt with quickly.... Where a supplier fails to meet expected standards, companies need to have a process in place to quickly remedy the issue... The key to supplier performance is to undertake regular reviews and to introduce action plans where appropriate. Review supplier performance against service level agreements and give the supplier a few months to demonstrate sustained improvement."
What is the best way forward?
Sadly, there will always be suppliers who perform better than others, or aren't the ones which specifically match your needs. However convinced you were at the outset that their product or service would do a good job. And of course, there will also be any number of reasons why things go wrong.
Given the increased use of technology in the legal sector along with human error, in most instances, it probably isn't about something like this not happening again, but more a case of when it is likely to.
The best way forward has to be to minimise the risk of poor supplier performance whenever possible throughout the process. Starting as early as the research you do into which supplier to contact, which will be well before you enter into a contract, to after the product or service has been installed. Also have a quick, and efficient, strategy to deal with situations when you aren't entirely happy. Preventing the matter from escalating.
As your journey into buying legal tech will more than likely be ongoing, you might like to read an inCase article which gives a 3-step plan for procurement, and concludes that:
"Getting procurement right requires a great deal of due diligence upfront. Creating your very own plan, 3 stages or otherwise. Building good relationships with your potential supplier; IT staff or consultant; and employees in the process.
As for most legal businesses, procurement is likely to be an ongoing iterative process. Using learnings from past lawtech purchases to inform the next. Not too dissimilar to how many technology vendors enhance their software iteratively – through agile methods of product development. The key is to document the improvements to your plan, so it can be of benefit to everyone in your firm, time and time again."
As a result, what you have experienced on this occasion may now be added to, or used to amend an existing procurement plan or policy. Including the latest strategies you used. Alternatively, it could set the wheels in motion for you to put a plan or policy in place.
A question of self-help?
"Company performance is only as effective as the smooth running of suppliers' operations. No matter how advanced your own production capabilities are, if a supplier misses a delivery or produces sub-standard goods, you will feel the cost."
This quote taken from a Forbes article dated May 29th, 2017 by Jonathan Webb puts the situation in a nutshell. He mentions again the need to have a process to remedy supplier underperformance quickly, and tools in place to do this. However, he then reports that:
"improving the performance of your company’s suppliers will often stem from actions you take within your own organisation. The more a company investigates the issue, the more that the supplier problem may appear to originate in your own lack of process."
The article provides 4 quick steps to help improve supplier performance, which are briefly as follows:
- The buyer needs to understand the improvements which are required, to define what the supplier needs to do to improve.
- Find indicators to measure performance. Such as increased costs, or better client feedback.
- Explain your intentions to the supplier. If there is an issue, whether you wish to remedy it, or possibly seek an upgrade. What the implications of the supplier failing to improve performance will be, including the potential loss of the account. If innovation is involved, the supplier needs to know what the incentives will be for them to follow this path.
- Monitor the data obtained in the preceding step, during an agreed time frame, and hold meetings. At the end of this step, it should be clear whether or not it is time for you to switch suppliers.
Finally, to make the process as seamless as possible, you might like to have a look at the CIPS website. The Chartered Institute of Procurement & Supply, a global membership organisation, is: "dedicated to the procurement and supply profession, helping to support, improve and raise standards."
It offers a means for buyers to develop their own best practices in procurement, through education and training. Including a corporate award, and qualifications programme.