Four Uses of Procurement Staff by Law Departments

For many companies in the Global 1000, true procurement influence over legal costs still represents one of the last frontiers of spend influence. However, I suspect this is a frontier that will increasingly come under procurement influence dominion, starting first with outposts and forts and eventually moving into sustainable settlements designed to last permanently. I will continue this analysis on Spend Matters looking at domestic legal spending in future posts, but I'll start by providing some evidence across the pond.

Two paragraphs from a survey report offer some insights into how European law departments use procurement personnel. The data comes from PLCLaw Dept. Quart., Vol. 3, Jan.-March 2007 at 23. Of the respondents to the magazine's 2006 survey, 18.3 percent of the law departments involved procurement staff, up from 12.9 percent in the 2005 survey. That's a significant increase in one year (See my post of March 1, 2008: procurement with 17 references).

Of the law departments that turned to procurement for assistance, half of them used sourcing specialists "to benchmark pitches". Perhaps that means they used them to extract information from the firms' responses to questions and then rank those answers. A third of the procurement users had procurement draw up the Request for Proposal. As to the other two uses, the magazine says that 16.7 percent of the law departments turned to procurement for "general advice" or "fee negotiations".

Later, at page 25, the article states that "11% of those who currently do not involve procurement staff intend to involve them in the near future". Legal's utilization -- in the role of stakeholder -- of Procurement is rather fascinating. Even more so if it continues to grow in these times when lean sourcing is permeating every corner of the corporation. Could this be a sign that the economy will play a role in diminishing "the old boy network", lawyers and all?

Rees Morrison

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