Jason Winmill is a Partner at Argopoint Consulting LLC. Argopoint has designed legal sourcing approaches for leading Fortune 500 companies that have been nationally recognized by The Wall Street Journal, Bloomberg News, and the Association of Corporate Counsel.
So – how should sourcing proceed? As an attorney and an accomplished sourcing professional, Krissa Kean Spence, Vice President, Strategist and Counsel at KeyCorp, points out that “legal sourcing is not just ‘nuts and bolts,’ as some procurement professionals want it to be, because to a Law Department, it can represent a radical change.”
Our work with Fortune 500 companies that have achieved the highest levels of legal sourcing success suggests that there are several things a sourcing professional seeking to be effective in the legal category should consider:
Let Legal Drive, but Help Navigate: Most successful sourcing initiatives we have been involved with are “attorney driven.” However, since a sourcing approach will often involve bringing the in-house legal organization a new perspective and new approach, sourcing must take care to help guide legal from reflexively falling back into “traditional” approaches. Sourcing can be effective when it:
Providing legal with options – rather than exclusively campaigning for a single approach – ensures legal stays in the driver’s seat. The conversations that follow will shed light on legal’s comfort level with various sourcing strategies and tactics. For example, is the General Counsel hungry for significant savings now or still just getting comfortable with the concept of implementing low-risk alternative fee arrangements?
Data and hard information are critical resources for procurement. “Market intelligence and benchmarking are part of what procurement can provide. ‘Decision-grade data’ provides visibility and a leg for procurement to stand on. Our legal colleagues don’t often have the time to get information themselves. Procurement can play a vital role helping legal get a sense of the trends sweeping the marketplace, and help position their organization to get on the advantageous front end of those trends,” offers GSK’s Ergler.
Legal professionals are often (rightly!) focused on the details of legal matters and specifics related to legal services. As a result, in-house counsel is not always able to “see the big picture” in the same way that procurement can. Procurement can help by bringing to the table robust benchmarking data that shows meaningful comparisons with relevant peer companies and by performing “landscape scans” to identify non-traditional vendors, billing models, and other opportunities on the horizon. Procurement is often the first to spot cross-category savings opportunities. At one Fortune 200 company, a sourcing professional was able to point out that the highly secure document management services that the legal department was about to purchase were being purchased in high volumes elsewhere in the company, enabling legal to bundle its volume and achieve greater discounts.
Work with Legal’s Deadlines, Not Procurement’s: Legal departments frequently have non-negotiable deadlines. Some skeptical in-house attorneys hold the notion that procurement could cause legal to miss these deadlines and therefore jeopardize the outcome of critical legal matters. It is important not to validate these misconceptions.
One example of procurement nearly missing the boat comes from a Fortune 500 company where the legal department had called on the IT Procurement team to help source some critical technology. Much to the shock of the legal department, procurement responded saying that any project support would have to wait until the next year; IT Procurement claimed to have too many projects already on the queue. Disappointed not to have any sourcing expertise, legal was prepared to move ahead by itself – and would have done so – had a conscientious procurement professional not intervened and taken personal responsibility for the project. Successful procurement professionals have learned how to act quickly when necessary in order to keep up with the tight timelines of the legal process.
Find Unlikely Allies: It may sound strange, but outside law firms can be potential allies for procurement. Some procurement professionals report that they have developed productive relationships with outside counsel professionals, usually those in more senior relationship management role. Though these professionals are sometimes (but not always) attorneys, they tend to be less involved in case strategy and more involved in improving case management and the health of the overall relationship.
Stay tuned for the final segment, which predicts what is to come for the future of legal sourcing.