Category Management: Sourcing Legal Services

Spend Matters welcomes a guest post from Jason Winmill, partner at Argopoint Consulting LLC. Argopoint has designed award-winning, nationally recognized legal sourcing approaches for leading Fortune 500 companies.

Sophisticated supply management professionals are making inroads into legal departments, and in doing so, delivering millions of dollars in savings. The media is gradually beginning to pick up on these successes: a recent article in the Wall Street Journal noted that several companies (including GlaxoSmithKline, Toyota, Sun Microsystems, and eBay) are using competitive bidding and reverse auctions to purchase legal services. As with other important services, effectively sourcing legal is a delicate process with major upside.

"Compared to a few years ago, legal sourcing is now an area where I see major companies investing. Doing legal sourcing properly does require a real investment. It's not a category where you can watch a few episodes of Law and Order and fake it," notes Justin Ergler of GlaxoSmithKline Legal Services Procurement, a rising star in this emerging field.

As legal services are highly complex, supply management professionals face the difficult challenge of building credibility in the legal department and moving along a steep learning curve without losing sight of short-term savings goals. In spite of these difficulties, savvy sourcing and procurement departments are earning the appreciation of their legal colleagues and earning public recognition.

Three Tips to Effective Legal Sourcing:

  1. Learn the Language of Legal: Attorneys are often put off by standard supply management terms and concepts. Find ways to learn their language and translate sourcing ideas into their vernacular.
  2. Understand When to be Deferential: Strategic legal sourcing can transform legal departments. However, most supply management professionals recognize that legal strategy is the exclusive purview of in-house counsel and avoid sourcing initiatives that may disrupt vital legal matters.
  3. Invest Time and Don't Give Up: Supply management professionals who have succeeded in legal don't quit – they persevere. They invest considerable time in getting to know their legal clients' issues and concerns.

-Jason Winmill, partner at Argopoint LLC.
Read this article to learn more about legal sourcing.

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Voices (3)

  1. Jamie Crump:

    I took the approach of providing bench strength. Trying to find a legal professional when you need one is a terrible time to go shopping. I met with legal and asked for one day a year – legal day. I set up a series of conference calls with potential suppliers. If the call went well, the initial paperwork was set up so they could engage them, if needed. When I left the company, we were three years in and had a number of successes. This helped get the relationship to look at other opportunities and provide savings and diversity in the supplier base.

  2. Ron:

    I am curious if other sourcing professionals have had as much trouble making progress in the legal category as we have. It seems to be a different beast than any other indirect category. I think we have a decent savings opportunity but it’s been difficult to get my legal "counterparts" on board.

  3. Theodore:

    This article hit the nail on the head. I handle procurement measures for a mid-sized biotech firm, and it is near impossible to reduce the legal department’s budget. Last year, I noticed this legal procurement trend appearing in my firm, and this article has reaffirmed my belief in this trend. Took my team a year, but we ended up reducing the legal budget by 5%. My advice is similar to the tips listed above. Talk to lawyers in their own language, pick your battles, and make it happen.

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