Myth or Reality — Eight Assumptions Procurement Professionals Harbor About US Legal Departments

As is often the case, there are kernels of truth in misconceptions -- perhaps even whole corn cobs. Nonetheless, I have heard a number of assumptions among sourcing experts when it comes to legal spend, not all of which hit the mark. And they're certainly worthy of discussion, so here goes:

Myth 1 - Legal departments don't know how much they spend.
Fact - Most departments know their total domestic legal spending reasonably well, or as well as the accounting department knows it. Outside the headquarters country it is a different matter.

Myth 2 - Legal departments don't analyze the components or trends of their spending.
Fact - Not a myth -- this charge hits home quite commonly.

Myth 3 - In-house attorneys are ignorant of tools and techniques to manage costs. Worse, they disparage such methods.
Fact - Some of this lack of interest may be true. "Managing lawyers is an art, not a science," lawyers will plead.

Myth 4 - In-house managers of external law firms are undisciplined regarding outside counsel selection, management and evaluation.
Fact - The charge is partly true, but partly unjustified.

Myth 5 - In-house lawyers are allergic to charts and tables that make numbers clear and useful.
Fact - Words dominate with lawyers, not numbers. They only want to deal with something that a spell-checker can handle.

Myth 6 - Lawyers think everything is so complicated, so special, so subtle and intertwined, so brainy that mere mortals should just leave them alone.
Fact - Lawyers tend to be smart and the law is often complicated, but it doesn't follow that hiring professionals for sophisticated services has nothing to learn from buying pencils. Arguments of irrelevance can be pushed too far.

Myth 7 - Corporate lawyers shy away from market-based competitions.
Fact - Mostly true, since they like choosing based on comfort, trust, subjective reputation, and familiarity.

Myth 8 - In-house lawyers don't feel they have much control over their budget.
Fact - Baseline spend by legal departments holds fairly steady most years in relation to corporate revenue though each year usually brings a costly surprise or two that was not predictable.

Perhaps articulating these assumptions and talking about them with your in-house lawyers will bridge the gap to improve communication, reduce conflict and enhance performance on both sides.

Rees Morrison

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