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Cost Savings Through “Legal Procurement”
Silvia Hodges Silverstein, Buying Legal Council
For many years, GCs and in-house attorneys resisted the influence of legal procurement. Meantime, legal spending for many companies grew as litigation risks increased, government oversight required more detail, and rates increased as major firms competed on pay for top legal minds. Now resistance to the concept is softening, and it is not uncommon for a Fortune 500 company procurement department to have multiple individuals dedicated to sourcing legal services. This is particularly true in some tightly regulated industries, such as pharmaceutical and financial services.
The Buying Legal Council’s 2017 survey asked legal procurement professionals how much, as a percent of total spending with legal services providers, they believed their efforts have helped save the organization. According to the survey, companies making even minimal use of procurement professionals save an average of 11 percent on their legal spend. That number reaches 23 percent for companies that devote more effort to the process. Length of tenure correlated with greater success.
Legal procurement is still a new profession. However, it is clear that when legal procurement professionals are supported, they can be successful and contribute to a company’s success; and the longer they are in these positions, the more valuable they become. GCs that give them a chance to prove themselves will find them to be an asset. Success comes when year-to-year spending is decreasing, average paid rate is improving and unnecessary legal work is avoided.Read the full article at:
Today's General Counsel