Glaxo Smith Kline: Sourcing Complex Professional Services Case Solution
Alternatives & Solutions
Through the long-standing relationship, the companies are engaged with the same law firms, and are leading the long relation with them. Through this alternative, the company would incur extra cost on the legal matters, but get a professional legal help through the firm. This is because the firm would have idea about the matters, and problems, of the company.
On the other hand, with this type of long-standing relationship, the company would not be able to meet the intention of lowering the spending cost on the legal matters that has been increasing annually.
In some other approaches to reduce the cost of legal matters of the company, like negotiating for the discounts, and froze rates as well as demanding alternative fees arrangements to AFAs rather than being billed for the number of hours worked by the law firms, which included fixed fees, and contingency fees, and so on; in this way the company could reduce its legal matters fees, while getting the quality of work by the firms.
Legal outsource Service providers
Through this approach, the company can shift its work to the less costly and more efficient firms. However, this is a non-traditional legal service providers, like the overseas legal-process outsourcing companies. Moreover, through the overseas outsourcing alternative, the company would be able to reduce the cost associated with the legal proceedings, and would also shorten the life of the case, and thus lower the legal spending on the case. Furthermore, the company can also set up the billing guideline system along with the invoice review process, in this way the company would be able to monitor the legal spending.
Selection of the alternative
The company’s main issue is spending on the legal matters, which is being a burden on the company. It is also spending annually million on the legal matters. Furthermore, the alternative of outsourcing the counsel firms is a feasible option to adopt.
The company would reasonably reduce the cost, and would be able to carry out qualitative operations. On the other hand, it is also matter of concern for the company, because outsourcing the process might result in poor services. However, the quality is very important in legal matters
In addition to this, under the new procurement process, firms would be hired based on their experiences, and professional expertise on the legal matters, but the way they would be hired remains a question.
The process by which the sourcing firms would be hired would take three steps; the first step would be the selection of the firms based on their experiences, and expertise; secondly, the fees would they charge would be less and effective; third step would be to short-list the firms, and conduct reverse-auction.
The firm which is priced less means that it had placed less bid, as a result, it would win the race to manage the company’s legal matters. However, the company might not provide the quality of work, or it may seem to be less interested in the work.
This is because, during the reverse-auction system, firms were bidding for the work, thus in competition with each other, they might have under priced themselves, and later they might have realized that they under priced the work.
Recommendation & Conclusion
GSK is facing serious problems of over spending on the legal matters, where the company is spending millions on legal matters, as well as it is incurring costs, which are considered unnecessary. Therefore, it is recommended for the company to adopt an alternative to hire a law firm, and source all its legal matters, whereas, it would pay less, and would get quality work. On the other hand, selection of the firms would be based on the pure competition, which will allow the company to adopt the reverse-auction system.
Thus, it is feasible for the company to outsource its complex matters to the law firms, which would enable the company to save the cost, and achieve the intention of outsourcing. However, the question remains regarding the proposed option that the company might fail to receive the proper, or incomplete work from the firm, since the law firm might have undervalued itself during the bidding process………………
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