Vodafone case study: using an alternative legal service provider

April 26, 2021

Originally published on The Law Society

More in-house counsel are turning to alternative legal service providers (ALSPs) to help them with high volume or very routine work to reduce costs and achieve efficiencies. Diana Bentley speaks to Vodafone about embedding an ALSP into its legal function and the benefits it has brought.

Employing 500 legal professionals worldwide, Vodafone has plenty of legal support. But its legal team is constantly honing how its services can best be delivered. The use of in-house service centres and alternative legal service providers (ALSPs) now plays a crucial role in its function.

Creating a seamless service is a key objective here, as is achieving cost savings. Wayne Spillett, head of legal – commercial operations, Group Legal, explains how this team works closely with their panel firms: “We challenge them to run our matters as efficiently as possible, including making use of low-cost centres and new technologies where possible.

“But we also partner with the lawyers in Vodafone’s shared services centres to bring them into our in-house legal family, a collaboration which has worked very well. In certain circumstances, it also makes sense for us to partner with ALSPs and our relationship with them has evolved over time,” he says.

Several shared service centres, which provide an array of support to the group globally, have been established in numerous locations including India, Hungary and Egypt. “The centres’ lawyers are locally recruited and there is no ‘us’ and ‘them’ mentality about it,” Spillett remarks. “Our colleagues in these teams play an important and integrated role in complex projects. We have cross-secondments between the teams and the people in our service centres also enjoy career mobility and can move into sister legal teams as opportunities arise.” 

Enter Factor

The use of ALSPs is also embedded into the workings of the group’s legal team, but the way in which they are used is evolving. Headquartered in Luxembourg, Vodafone’s global procurement function has its own dedicated legal team, led by Matthias Kreutzer, head of legal, Vodafone Procurement Company (VPC). Kreutzer and his 15-strong team use a legal team in the service centre in Budapest to support them in their work, but also send selected matters to ALSPs.

“We used to outsource high-volume, more straightforward work in the past, but have stopped that as our thinking has moved on,” Kreutzer explains. This has involved a careful consideration of the skills needed for the work of the VPC, which is split into four main categories – networks, IT, device operations, and commercial and services. The work of commercial covers the procurement of products and services like marketing, media, property management and travel, and it is supported by Factor, which has offices in in London, Belfast, Chicago, New York and Wroclaw in Poland.

“One of the main reasons in deciding to outsource this work was that it wasn’t really part of our core telecommunications business, and we wanted to free up some internal capacity so we could keep supporting these other areas with our in-house lawyers,” Kreutzer says.

Factor’s record in delivering complex legal work at scale made it an attractive partner. As well as using traditional ALSP features like tech enablement, workflow and process orientation, Factor works with domain experts in legal and contracting talent. The Factor team Vodafone works with is based in Belfast and has five UK- and Irish-qualified lawyers, who undertake the same sort of work as the rest of Kreutzer’s team. “Unlike the work we once outsourced, this can be complex. They do end-to-end work for us, so it includes negotiations, drafting and risk assessments.”

“They attend meetings with us, and we have a lot of regular interaction and have built up a very good rapport with them. The element of trust is high. The people in external law firms we use aren’t normally so integrated into our legal team.”

Why not use a law firm?

“Law firms usually use daily rates and are less flexible in their approach,” Kreutzer explains. “We use law firms primarily when we need to access expertise that we don’t necessarily have in-house. With Factor, we negotiate an agreement for their services for a fixed period and a fixed amount. This provides both parties with certainty.” 

Importantly, too, Kreutzer’s team now know the Factor team well. “They attend meetings with us, and we have a lot of regular interaction and have built up a very good rapport with them. The element of trust is high. The people in external law firms we use aren’t normally so integrated into our legal team.”

When commercial colleagues ask for legal support, the request is considered by Kreutzer and his team and a decision is made as to who can best handle it. Some of the higher volume work may still be dealt with internally, including the internal service centre in Budapest which, Kreutzer notes, has highly skilled lawyers. But efforts have been made to reduce this kind of work. “We’re using transformation, digitalisation and automation as much as possible. We have more templates for contracts and playbooks and we’re providing non-lawyer colleagues with more guidance and training. All this has helped cut down on much of this type of work.”  

The use of ALSPs for more complex work is certainly an interesting and notable step forward, he agrees. “There is possibly scope for more development. It will be interesting for groups like ours.”