The Quiet Power of a GCs Legal Spend

This quarter, Squared Group CEO Demetrio Zema writes an open letter to GCs on the power of their legal spend, and what happens when in-house teams decide the default no longer serves them.

Revolut recently retired its static law form panel, replacing it with something more fluid. The US fintech’s external firms are now reviewed on performance, and data and AI inform who gets the next brief, and no one’s place is guaranteed.

The move drew a lot of attention, some of it sceptical. What stayed with me was not the mechanism (which i’ll leave others to argue over), but what it signals: a large in-house team looked at the way it bought legal services, decided the default no longer served it, and made a change.

That is worth sitting with, not because the power Revolut used is radical, but because it’s a reminder of what you already have at your disposal. You are using your legal spend, whether you realise it or not, to either reinforce the status quo or accelerate genuine change in the profession.

Most of the time, that power goes unexercised. Not through any failing on your part, or that of your team, but because the system is built to make the default feel like the only sensible option.

The Quiet Power of Legal Buyers

GCs and their in-house teams are the largest buyers of legal services globally, and that’s not a trivial fact. The choices you make, collectively and individually, shape how firms behave more than any regulator or internal reform effort within the profession has ever managed.

It matters because the profession has real problems, and you probably see them more clearly than most. Too many capable people burn out and leave private practice early, and, as a buyer, you feel the downstream every time an invoice doesn’t reconcile, or a firm puts its third different lawyer on your matter in two years.

But you also have the power to do something about it, because where you direct your spend is a quiet but meaningful form of influence. When you back firms whose values and ways of working you genuinely respect, you’re doing more than securing better service. You’re helping shape a profession more people want to work in, and stay in.

Built for a Different Time

Static three-year panels made sense when pre-qualification of a roster of trusted firms mattered for speed, and relationship continuity was the best available proxy for quality. For large in-house teams, they offered a practical way to manage a complex services category, and for a long time that was a reasonable trade-off.

But that logic was built around managing procurement risk rather than optimising for legal outcomes, and the conditions that justified it have moved on. You are more commercially sophisticated than the in-house teams of a decade ago, data is more accessible, and AI is reshaping what good external legal support looks like. A process designed around a three-year-cycle was never going to keep pace with that, and the evidence suggests it hasn’t.

The 2018 GC Thought Leaders Experiment studied more than 1,400 legal matters across 28 large companies and found that panel firms did not outperform non-panel firms on cost, quality, responsiveness or solutions focus. Brand and panel status, it turns out, are surprisingly poor predictors of how a firm will actually perform for you.

That’s not a reason to abandon your panel, but it is a reason to hold it to a higher standard, and to ask a more useful question than simply keep or scrap. The better question is whether the panel you have is still shaped around what your business needs now, or around what was practical to set up a few years ago.

The Information Gap Has Closed

For most of my time in practice, the firm held the data. You saw the invoice, but rarely the work behind it. Even when a matter felt overstaffed, or the billing didn’t quite stack up against the effort, proving it often cost more than the dispute was worth. Responsiveness, advice quality and scope creep all lived on instinct rather than evidence, and that imbalance is a large part of why it has always been easier to renew a panel than to question one.

AI changes that calculation. You can review invoices at scale and notice patterns that would otherwise go easily missed. You can direct a matter to the firm best suited to the work, rather than defaulting to whoever happens to be on the list. You can track responsiveness and outcome over time, turning what used to be one heavy review every few years into something closer to an ongoing conversation, grounded in what really happened, rather than what anyone remembers.

Revolut’s model is the most public expression of this shift, but the tools driving it are accessible well beyond a billion-dollar fintech with deep budgets and large procurement functions. Even as a SLO, you can run a version of this analysis today. The competitive advantage in your external legal relationships is moving away from brand recognition, and toward something more demanding: firms that ask sharper questions and have the data to back their advice.

The Trouble with the Billable Hour

A note of caution before the tools get all the credit, because this is where a lot of the enthusiasm goes astray. These tools are only as useful as what you point them at, and if you aim them solely at hourly rates and turnaround times, you will get cheaper and faster, which is not the same as better. A performance ranking weighted heavily toward price tends to push your strongest firms away, the ones with the leverage to simply decline, and leave you choosing amoung those that most need the work, rather than those that do it best.

The more meaningful question is alignment, between how a firm is paid and what you want from it.

Time-based billing creates the same fundamental problem on both sides of the relationship. From your side of the table, it means paying for effort rather than outcomes, carrying the cost of inefficiency, and working with a firm whose commercial incentive points in the opposite direction to your own. From the firm’s side, it means a lawyer’s worth is measured in hours recorded rather than work done, and that persistent pressure is one of the genuine reasons good people leave private practice early.

Fixed and outcome-based pricing resolves both problems: you get cost certainty before the work starts, and the firm is incentivised to solve your problem rather than extend it. And when lawyers work in an environment that values judgment over utilisation, the relationship itself changes, because the kind of deep client knowledge that understands your risk appetite, your commercial priorities and your preferred ways of working doesn’t accumulate on an hourly model, it gets billed out.

When a firm retains its people, you retain the lawyers who understand your business, and that continuity compounds in ways no brand reputation can replicate. It starts with a commercial model that makes staying worth it, for the firm and for you.

Where to Start

Your panel isn’t going away, and a well-designed one remains the right structure for plenty of businesses. But it does require intentionality, and there are a few questions worth asking at your next panel formation or review:

• Does your current arrangement reward time or outcomes?

• Could a continuous, data-informed view of your firms do the work of the three year review, with lighter check-ins along the way?

• Are you using the tools now available to match each matter to the right firm, or still defaulting to the roster?

• When firms talk about investing in AI, is it showing up in the work delivered and your bills, or only in their pitch?

• What kind of behaviour are you rewarding with your spend, and is it the kind you want more of?

The answers won’ t always mean changing firms. More often, they’ll simply bring clarity about what your legal spend is really buying, and for a team tasked with doing more with less, that’s worth a good deal more than another scheduled review.

A Real Opportunity

The best relationships with external firms are never transactional. They’re built with firms who understand your business well enough to anticipate problems, and who work alongside you rather than billing against you. Rethinking how you buy legal services is a way of finding more of those partners and fewer of the rest.

Revolut has opened a conversation worth having, and the tools that allowed it to do so are within your reach now too. But this was never really about one company’s panel. The profession changes when the people who pay for it decide to should, and few are better placed to lead that change than you.

The opportunity is real, and a hopeful one. Used well, it has the chance to genuinely improve the profession, for the benefit of private practice and in-house lawyers alike.