Case | HBS Case Collection | September 2013

GlaxoSmithKline: Sourcing Complex Professional Services

by Heidi K. Gardner and Silvia Hodges Silverstein

Abstract

Pharmaceutical company GlaxoSmithKline (GSK) uses an innovative new approach to procuring outside legal counsel: it replaces relationship-based selection and law firms' traditional time-based billing with data-driven decision making and an online reverse auction. In the case, GSK is hit with a potentially devastating suit and must hire a firm in time to respond. The recently hired managing attorney, Sophia Keating, grapples with GSK's approach. The GSK veterans assure her that the approach drives down costs and improves the quality of work by systematically increasing the rigor in the procurement process. Still skeptical, Sophia runs the process of systematically analyzing and comparing the competing firms' bids. This case also describes the process by which these tools were created and adopted. Beyond the implications for law firms and other service providers, lessons from this case are applicable for teaching about institutional change, procurement processes relevant to many fields, and how to increase rigor in typically informal business processes.

Keywords: legal industry; procurement; change management; professional service firms; pricing; competition; Competition; Change Management; Supply Chain Management; Legal Liability; Business Processes; Legal Services Industry; Pharmaceutical Industry;

Citation:

Gardner, Heidi K., and Silvia Hodges Silverstein. "GlaxoSmithKline: Sourcing Complex Professional Services." Harvard Business School Case 414-003, September 2013.