Don’t be afraid of the legal category

Legal services used to be outside the reach of the procurement department. For years, legal services were largely exempt from the intense cost scrutiny other business units and functions have been facing. But in more and more corporations, procurement is gaining influence in sourcing legal services and managing supplier relationships.

If you haven’t started tackling the legal category, get involved in sourcing legal services now. Attend the upcoming legal procurement conference in London (28 September) by the legal procurement trade association Buying Legal Council. It is the first legal procurement conference of its kind in Europe. (Schedule)

The Buying Legal Council’s one-day conference centres on clients’ demand for efficiency. 21 professionals from both the client and the legal service provider side will discuss EFFICIENCY in legal services:

  • Three TED-style talks will highlight different approaches to efficiency in the legal profession. Hear Leah Cooper, former GC at Rio Tinto and acknowledged innovator in the legal services industry, legal procurement expert Stacey Coote, and Mike Potter, head of Addleshaw Goddard’s transaction services team. Contrast and compare – which approach works for you and your firms?
  • A recent Boston Consulting Group research on trends in the legal market will discuss whether we are experiencing a disruption or an evolution – or whether it’s all just hype. Christian Sellmann, who conducted the study and Harmut Papenthin of CMS Germany will weigh in. What is your opinion? How do you need to prepare in either case?
  • Law department management consultant Richard Stock will take the buyer’s point of view on increasing efficiency in law firms. What can be done? What should be done?
  • Pricing expert Richard Burcher will look at efficiency & effectiveness: What is their impact on pricing? Do firms pass on efficiency gains?
  • A procurement-panel and a law firm panel will debate what efficiency means for them. What do clients expect in terms of efficiency? And how do firms intend to deliver efficiency? Hear what they have to say and decide for yourself: Do clients and law firms see eye-to-eye? What –if anything- do you need to adjust in your approach when sourcing legal services?
  • Professor Stephen Mayson will shed light on the future of buying legal services. Who will be in the driver’s seat? Who will make decisions?
  • I will look into the future development of legal procurement. Based on experiences from other professional services, what challenges or opportunities may you face next?
  • Legal Project Management experts Catherine Alman McDonagh and Tim Corcoran will challenge the panelists –and the audience– to an efficiency challenge. Who is more efficient? Clients or law firms?

The involvement of legal procurement is one of the side effects of a ‘power shift’ to clients. Procurement applies business discipline to legal services. Procurement holds legal services to the same business standards like the rest of the business world. The decision-making process for selecting firms used to be subjective: work would go to firms without a formal sourcing process based on subjective measures. The firms would do the work for the client from beginning to end, often without a budget and without any performance metrics to monitor outcomes and efficiency. After the work was done, the firms would present an invoice “for services rendered” without details of the work.

This has changed. Legal procurement has quickly established itself as a player in the legal world:

  • It is common today for clients to demand efficiency, transparency, and predictability from their law firms.
  • It is common today for clients to have a say in how their services are delivered, how their matters are staffed.
  • It is common today to unbundle the work process and source parts of the work to non-traditional legal service suppliers.
  • It is common today that parts of the work are automated with the use of technology.
  • It is common today to use typical procurement tools like RFPs for selecting firms and keep a level-playing field among the different competitors.
  • It is common today to establish performance measures and hold firms responsible for meeting performance targets.

Join your peers, other legal procurement professionals, as well as in-house counsel, private practice lawyers, and law firm executives for a day of intense discussions and sharing best practices. Learn, network, exchange thoughts and experiences at the Buying Legal Council conference.

With procurement’s push for business discipline in legal services, more and more law firms have invested in the delivery of legal services and hired experienced project managers and other business people. They are prepared to provide you with budgets and discuss how they can add value to your business through Six Sigma, Lean, ISO, and other tools. They are prepared to discuss business aspects with you such as:

  • Ways to reduce cost, increase transparency and efficiency
  • Suggestions for change your company can implement to make their work for you more cost-efficient
  • Approaches that ensure the highest quality outcome for your matters with the most efficient use of your resources
  • Recommendations for measuring firm performance against your business requirements

Get new ideas from your peers. See you 28 September in London at the Buying Legal Council legal procurement conference! Click here for the programme.



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Do it before the #Activist investors call for #Cost-cutting

Bill Ackman, Nelson Peltz, and other activist investors have been in the media for some time now, demanding companies to cut (more) costs in addition to growing revenue. They are not alone with their demands for cutting costs. We can see a clear trend in the legal industry: For years, legal services used to be largely exempt from the intense cost scrutiny other business units and functions have been facing for years. This is no longer the case.  Legal spend has become a line item that few CEOs or CFOs can ignore. In more and more companies around the world, legal procurement – the purchasing department or corporate function responsible for acquiring goods and services  – is quickly gaining importance in sourcing legal services and managing relationships with law firms.

Procurement applies business discipline to legal services. It is generally much less focused on relationships with trusted firms than the legal department. It compares and contrasts law firms, uses data and develops evidence-based rationale for major reductions in legal spending.

According to studies of the trade organization Buying Legal Council, the main drivers to bring in procurement are the desire to:

  • Managing cost/reducing supplier spend
  • Ensuring that the company buys goods and services in compliance with company policies
  • Making sure the company gets good products and services from reputable suppliers.
  • Achieving more objective comparisons of legal service providers through measuring and benchmarking outside counsel’s value
  • Streamlining operations
  • Improving efficiencies
  • Finding better ways to structure fee arrangements
  • More reliable budgeting
  • Increasing predictability and transparency.

Why legal procurement? Could the legal department itself not apply business discipline? Yes, however, many CEOs and CFOs believe that the legal department benefits from procurement’s core competencies in getting better value from its suppliers. Top management is convinced that legal procurement can make value-added contributions that go beyond what any functional department like legal could accomplish by itself. Involving procurement in the sourcing of legal services has worked in other functional areas and there is no reason to believe that this won’t hold true for legal.

Learn more about legal procurement approaches and join us in London on 28 September to discuss EFFICIENCY in legal work and in Chicago on 19 October to discuss METRICS & BENCHMARKING.

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Ken Grady: How To Get Law Firms To Change

The legal category is a buyer’s market, clients today have more power than many of them realize. However, client must be strategic about getting law firm to be more efficient, more cost-effective, more transparent or whatever else is the client’s goal. In the Buying Legal Council‘s most recent Legal Procurement in Brief conference call Ken Grady of Seyfarth Shaw recommended enticing firms to change through a benefits-for-change strategy (“what’s in it for them?”) rather than threatening with negative consequences.

When negotiating with firms, be aware of what motivates the firm, Grady said. Does your work fit the firm’s strategic plan? Are you a “dream client” for them? What drives a firm to take on low margin commodity work is not the same as what attracts another firm to high margin bespoke work. Clients today have the most opportunity to drive change for middle-range work as many firms are still trying to figure out how to succeed in this highly competitive market.

Members of the Buying Legal Council can access the Cheat Sheet “How to Get Law Firms to Changeshere.

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