Please participate in 2016 Legal Procurement Survey

Procurement’s role in buying legal services keeps evolving. Three studies on legal procurement (2011, 2012, and 2014) clearly demonstrate that procurement practices gain more and more influence on the category. In 2011, legal procurement was limited to a small number of very large companies, almost exclusively from the financial services sector and the pharmaceutical industry. Only three years later, many corporations turn to procurement for help in sourcing legal services. Fortune 500 corporations tend to employ their own legal procurement team while medium-sized companies hire consultants that organize legal procurement consortiums to achieve greater buying power.

Here’s what else I found:

  • Procurement gets more and more influence on the legal budget
  • Procurement’s role is that of the buyer, influencer, and gate keeper
  • Procurement is moving into higher-value legal services
  • Procurement expects significant discounts
  • Procurement’s tools include negotiations, reverse auctions, and billing guidelines
How has it changed in the meantime? Please participate in the 2016 Legal Procurement Survey: Click here


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Mastering RFPs

RFPs (requests for proposal) have become common practice for legal services. Most large companies, in particular those in financial services or pharmaceuticals, no longer hand out new matters without having run an RFP to establish who offers the best proposal or who’ll be on their panel of preferred providers.

Procurement is typically involved in setting up and running the RFP process. It has the role of arbiter and guardian of an objective selection process: making sure corporate compliance standards are followed and their employer gets the best possible value (which may mean different things to different clients and situations).

Even though procurement is generally not the ultimate decision-maker, it typically has veto power and can cast a serious shadow on law firms. Procurement can express that the firm was difficult to work with during the selection process or convey that the firm appears to lack the necessary business perspective. So how can firms master RFPs? Jason Winmill of Argopoint advises law firms to demonstrate that you are truly interested in the client by giving thoughtful answers to the RFP questions and expressing your knowledge and understanding of the client’s situation by addressing the legal issues in a wider business context.

To read Jason’s list of do’s and don’ts for RFPs, you need sign into the Buying Legal Council Friend area.

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Legal Procurement: The Game Changer

In more and more corporations, legal procurement are taking over what is traditionally viewed as a central function of corporate legal departments: the sourcing and pricing of legal services., says Melissa Maleske in her article Legal Procurement Changes Rules Of Law Firm Engagement.

“As law departments continue to focus on spending, procurement has become a key piece of the puzzle, stepping into a role that many lawyers aren’t trained in — namely, making well-informed purchasing decisions and negotiating with and managing the work performed by outside service providers.”

“The legal department typically sees its role as managing the risk and keeping companies out of trouble, and they’re not typically trained to reduce cost. It’s not necessarily part of their mindset,” says Silvia Hodges Silverstein, the executive director of the Buying Legal Council, a trade group for legal procurement professionals. “Whereas when the CEOs and CFOs look at how much companies spend on legal services, they’re thinking, ‘That is so much money.’”

Across industries, corporations focus on disciplined, informed decision-making about law firms and law firm management that stresses value and efficiency. “That’s procurement’s wheelhouse to a T, so it’s no surprise that legal procurement is becoming another new normal, rather than the novel proposition it once was.”

Read the rest of Melissa Maleske’s article in Law360.

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