5 things you should do to succeed in buying legal services:

  1. Look beyond Discounts: In the legal category, value gains come through process improvements, service unbundling, innovation, risk reduction, and incentive alignment, and not via discounts. The real opportunity lies in identifying the ways in which firms & suppliers can help you better meet your organization’s business objectives, consume less, and become less expensive to serve. To read Gerard Chick’s LinkedIn post, click here. Firms create value by reducing costs, reducing waste, and improving process controls.
  2. Focus on their Strengths: What are different firms and suppliers best at? Use “requirement segmentation” as your key cost reduction driver. Which matters or phases require local knowledge? What could be offshored? To read Anupam Razdan’s and Vincent Gautheron’s slides from the Buying Legal Council Legal Procurement conference in London, click here: http://www.buyinglegal.com/formembers
  3. Phase your Goals: Divide your goals into smaller, phased outputs. Establish an agenda of recurring topics you discuss with your colleagues in Legal: e.g. in February, prepare a synopsis of what happened in the past year. In April, review Q1 and take a fresh look at your Billing Guidelines. In July, review Q2 and examine selection and evaluation processes. To read Magen McClintock’s Cheat Sheet on “How to Make Yourself Indispensible”, click here: http://www.buyinglegal.com/formembers
  4. Establish Reference Points: Develop/get access to a fully maintained rates database. Use reference points that cannot be argued (such as location and work type). Understand where the market is going, and what pressure the law firms are under at the time you are agreeing the terms of the contract. To read Nick Mirabella-Williams’ slides from the Buying Legal Council Legal Procurement conference in London, click here: http://www.buyinglegal.com/formembers
  5. Use the Right Metrics: “It’s becoming harder and harder for legal departments and law firms to ignore the useful data that modern technology can extract from the outputs that everyday operations provide. (…) Lincoln Financial Group has gone so far as to use metrics to calculate win rates. The company measured ‘wins’ by combining settlement costs with legal costs on similar high-volume matters. It discovered that the results combined with the legal costs varied markedly among external counsel. Consequently, it has started moving business to the firms with the best ‘win’ record.” To read the article “Using data to select external counsel” and other articles on legal procurement, access our article log on Legal Procurement. Click here: http://www.buyinglegal.com/articles If you have written an article on legal procurement or have read an interesting article on legal procurement we haven’t listed yet, please let me know! 



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Winning over your colleagues in the legal department

In-house lawyers are often not fans of Procurement and procurement processes, at least from the start. Many of them don’t think like business people, savings often don’t matter to them as much as they typically matter to you, and relationships to outside counsel are of utmost importance for them. Former general counsel Leah Cooper of Leah Cooper Consulting recommends ways for Procurement to win in-house lawyers over and drive improvements:

Build the relationship: If possible, sit with your colleagues in Legal and/or schedule regular meetings. Ask questions, understand their issues, learn lawyer-speak and avoid Procurement lingo. Relate and engage. Come with different options or scenarios. Lawyers are trained to argue and find fault. By showing them different scenarios they can reason about the most fitting solution and are hence more likely to embrace it. Also come to an agreement as to what is a “win”.

Be useful: In RFPs, show your skills and usefulness and do the “leg work” for the legal team. Learn what is important to them and research alternatives. Show that you are aware of their concerns and know what keeps them up at night. Use this in your approach when making suggestions for different processes, analyses or firm choices.

What else you should do:

Understand what keeps your colleagues in the legal department up at night and connect with your peers in other companies. See what path they have taken, learn from their successes and mistakes, and adopt legal procurement best practices.

Attend the next legal procurement conference in London on 9 May. Click here for the programme!

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Legal Procurement’s influence keeps growing!

Legal Procurement’s influence is quickly becoming ubiquitous. Legal services used to be largely exempt from the cost scrutiny other business units and functions have been facing for years. But no longer. Many companies, particularly those with significant legal spend and in regulated industries, involve Procurement when selecting outside counsel and ancillary legal services. The objective is to cut costs, ensure quality, and drive efficiency. And it is working.

This trend is not completely appreciated in the industry. It is rarely love at first sight, when the CEO or CFO introduces Procurement to the legal department to assist with selecting law firms and managing “supplier” relationships. But Procurement’s expertise in getting the best value for the company, managing the sourcing process, and finding the right suppliers for the right price at the right time, makes its involvement a compelling solution for top management.

The recent financial crisis and slow recovery acted as a catalyst and sped up the process for the adoption of Legal Procurement among many Fortune 500 companies and their international equivalents. Publicity about billing practices, big ticket spending, increased transparency, and profit pressure is at the root of this seismic shift.

The industry organization, Buying Legal Council, was formed in 2014 to support and educate Legal Procurement professionals and other buyers of legal services. It provides education and networking to its members and counts many Fortune 500 companies, multinationals, and government agencies among its members.

To better understand Legal Procurement practices and detect trends, the Buying Legal Council conducted a survey in January 2016 among Legal Procurement and Legal Operations professionals, in which 92 submitted their answers. This research represents the view of Legal Procurement and Legal Operations. In order to respond, the organizations had to have such a corporate function. Generally, Legal Procurement as a profession is still in its early days and while more common, is still not yet represented in every industry sector and/or region. We believe that the buying of legal services is still changing and likely to become more closely managed rather than less.

Please note that all findings should be seen as indicative, showing trends rather than absolute, representative data due to the sample size in a (still) unknown universe of Legal Procurement professionals, the effects of random sampling, and different mixes of survey participants in the different surveys.

Members and Friends of the Buying Legal Council access the White Paper on the “Members-only” (buyers of legal services) and “Friends-only” (sellers of legal services) part of the website.

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