Legal Procurement Dialogue with Law Firms

Getting more and more RFPs from procurement? Corporations around the world now include procurement when purchasing legal services.

If you’re wondering what procurement professionals are looking for, dial into the Buying Legal Council‘s Legal Procurement Dialogue conference call for law firms on September 16.

Click here to sign up

As the organization for legal procurement professionals, the Buying Legal Council seeks a dialogue with law firms and wants to make sure that law firms have a clear understanding of what legal procurement is all about. The conference calls are “open mic” sessions where outside counsel, BD professionals, marketers — any stakeholder in legal — can ask a seasoned legal procurement professional anything they ever wanted to know about legal procurement. Get answers to:

  • How to best work with procurement
  • How procurement evaluates law firms
  • The do’s and don’ts when procurement is involved in selecting law firms
  • And anything else you want to know about legal procurement

The expert, seasoned legal procurement professional Jason Winmill has been working in legal procurement for over a decade and has been involved in many groundbreaking legal procurement initiatives in a variety of Fortune 500 comanies.

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Still a long way to go: Gender in the Legal Industry

Law firms around the country are failing female lawyers: “All the Pinot Grigio-fueled women’s networking events and anti-bias ‘training’ seminars notwithstanding, the gender gap has hardly budged,” says Julie Triedman in her article A Few Good Women in The American Lawyer.

There are not enough females in leading positions at law firms: In 2004, women constituted 15% of equity partners across the country; in 2014, the number barely went up to 16.8%. To put it in perspective, women make up 47% of law school grads, 44.8% of associates, 35% of newly promoted partners, and 5.5% of firm chairs.

There is no pay equality: According to a 2014 survey of more than 2,000 large law firm partners by Major, Lindsey & Africa, compensation for male partners was 32% higher than for female partners. Men reported an average compensation of $779,000, compared with an average of $531,000 for female partners.

There is no billing equality: At the highest billing rates, there are far fewer women billers, according to the Gender Billing Study. At firms of more than 1,000 lawyers, virtually no women bill out at $1,000+ an hour, but 2% of men did; 6% of men at the same firms billed at least $800, compared with 2% of female lawyers. While more than half of male partners charged $500 or more per hour, only 31% of women did.

Now that we have some metrics as benchmarks-how long will it take us to make a difference? Perhaps clients pushing for more gender diversity can tip the scale? According to Triedman, “Some 22.6% of Fortune 500 companies counted women as general counsel last December, up from 15% in 2005; more are just behind them on the corporate ladder.” She quotes DLA Piper’s Americas co-managing partner Anastasia “Stasia” Kelly, a former general counsel at American International Group Inc.: ”Women in-house counsel are looking at outside counsel and saying, ‘I don’t want to see all men.’” Discuss…

Read The American Lawyer Special Report: Big Law is Failing Women.



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Law Firms: Getting ready for Procurement (Part 3)

To help legal departments apply greater sourcing discipline, many companies involve procurement in buying legal services. Law firms are experiencing this shift as they work on pricing and answering RFPs. This series brings together recommendations on how to best work with procurement from articles published in the Legal Procurement Handbook published by the Buying Legal Council. It was first published as an article in the Legal Marketing Association‘s magazine “Strategies.” To read the previous parts, click here for part 1 and part 2.

Once you decide to participate in the RFP, you are likely to go through a multi-stage process, requiring you to provide responses to each stage. Each stage is aimed at assessing the competing suppliers, says David Clark, head of bid management at APS Group in Manchester, UK. In the article “Bidding to Win: Step by Step,” he explains that procurement draws up shortlists of firms who perform best on a scoring system. Procurement first looks for “bidders who have been trading successfully in recent years, have appropriate policies and processes in place, hold the required insurance and have robust business contingency procedures.”

Stage two typically measures expertise and experience in delivering similar services to peer organizations. The final stage is typically the pitch presentation. “At this stage, it is a matter of seeing if the parties can work together, whether the claimed level of expertise does exist, confirming that certain promises made in the submitted documents are realistic and negotiating commercial terms.” When pitching for panels, ‘chemistry’ is less important to the buyer, and the RFP is often awarded from paper, Clark says. “This makes the construction of a compelling bid even more important.”

Increasingly, clients also look for reciprocity, meaning business opportunities that the law firm can introduce them to. “Successful law firms offer such ‘added value’ through invitations to networking events, joint networking events, opportunities to joint bid and introductions to contacts in a given market. What’s new is that some buyers demand them,” Clark says.

In “Bidding to Win: Before, During and After the RFP Process,” Melania Wenstrup, global key account manager at Grant Thornton International Ltd. in London, recommends investing time, efforts and resources to finding out procurement’s objectives. “Learn what their business goals are and how the business is changing for them,” she says. “Explore what they believe to be the most pressing problems hindering them from achieving the success they seek. Arm them with the information they need to achieve these objectives.”

Large-scale opportunities are usually signaled long before an RFP is made public. Wenstrup says, “Surpass your competition prior to the RFP, and treat procurement as you would any other key stakeholder in the decision process. Demonstrate and convey your added value to procurement by helping them define the real business requirements and influence the parameters of the specification beforehand. See procurement as your partner, not your adversary.”

It is critical to understand how procurement evaluates suppliers and how this drives their purchasing strategies. Demonstrate your understanding of their organizations’ internal and external environment, e.g. through regulatory initiatives or industry themes, Wenstrup says. Arrange meetings to discuss developments in the business and projects that might be in the pipeline. Make sure your informal relationships are fresh, in case you are not allowed to contact those involved in the RFP when it arrives. Find out what procurement is trying to achieve through the RFP, which may not necessarily be the same as the business. Although cost will be important, they will have other key drivers. Ask questions so that you can demonstrate how your proposal will help them achieve their goals.

Be prepared to accept lower margins in exchange for future business or have the confidence to walk away and focus on opportunities with higher returns. If procurement’s driver is getting value for money, find the right balance between price and quality. To articulate your proposition, Wenstrup recommends that you focus on:

  • Better. Get across a definitive and tangible feeling of your service. What improvements can you offer? When can procurement expect to see these improvements? How will they be able to measure it? Does it drive sustainability?
  • Simpler. Simplify the process and service management: Procurement looks to eradicate any unnecessary added services, so avoid sounding too ‘salesy’ or pushing additional services.
  • More value. Price competitively. Do benchmarking and know your walk-away price.

Whether you won or lost an RFP, stay in touch with procurement and use this last RFP as an opportunity to cultivate a long- term relationship. “Anything you can glean from the scoring process and any peripheral elements of the decision can help you pitch more effectively next time,” Wenstrup says. Invite procurement to knowledge-sharing events, send relevant publications and newsletters, and share trends and issues that are critical to their success. Make it your priority to become the point of reference for your client’s procurement professionals.

In the end, only a win-win relationship will be able to endure the test of time. Good luck on your next pitch!

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