Is it time to work with, instead of against, procurement for outside counsel services?

Comment Legal Spending Operations
8 November 2019
261
3 minutes read

There’s a battle going on. A polite one, to be sure, at least most of the time. But it’s a battle nonetheless, between general counsel and corporate procurement professionals. The two sides’ stances can be summed up like this: The general counsel wants the legal department, and only legal department, to hire outside law firms. And procurement says it has the expertise to do so, and why should Legal be different from any other department, anyway?Two procurement pros, Silvia Hodges Silverstein, executive director of Buying Legal Council, and Evelyn Paetsch, with Deutsch Bahn AG, have written an open letter to their legal department colleagues. In it, they attempt to overcome Legal’s objections to their calling the shots in hiring outside counsel.

They start with a statistic: “Companies using procurement to buy legal services on average save 17.1% on their outside legal spend. Here are some questions to ask yourself.” And, they say, they aren’t coming in from Mars—that procurement already plays a role in some corporations: “In the United States, United Kingdom, and Switzerland, as well as in certain industries, including big pharma, large banks and insurance companies, legal procurement managers work alongside their colleagues in the legal department and legal ops to get more value from their providers. They are brought in when the organization needs to buy legal services, alternative legal services, ancillary legal services, and legal technology. Procurement helps and supports. Procurement professionals analyze and negotiate.”

Then they trot out the usual arguments made to keep them out. Legal is different, only lawyers understand the nuances of buying legal services. You know the drill. But they say it’s no different from procuring other corporate services. They have guidelines, they follow them, they’re disciplined and get a good deal as well as good service. Plus, they gently tell their lawyer-colleagues, don’t you have better ways to spend your valuable time?

Besides, they continue, think about hard negotiations with your firms. Was it good for you? Or was it complex and did it involve a lot of wrangling to get, for example, alternative fees? It probably left some injured egos. Is that how you want to do business?

You can read the entire letter here, on Bloomberg Law.

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