Partnerships With Procurement Will Lead to More Savings for Legal Departments, Survey Says
New data shows that making friends with procurement can be a big net positive.
April 10, 2018 at 12:27 PM
3 minute read
Procurement professionals can boost a legal team's efficiency and savings—but according to new data, their best work comes when they're partners with the legal department, not strangers siloed away.
A survey of more than 150 legal procurement professionals released by the Buying Legal Council on Tuesday revealed that the procurement teams that described their relationship with the legal department as “partners” reported saving their companies an estimated 21 percent in legal spend per year.
On the flip side, procurement teams that reported in-house lawyers were “reluctant” in their relationship with procurement only saved an estimated 7 percent. There were also increased savings reported when procurement and legal operations had a stronger relationship.
“Procurement is definitely trying to work very closely with legal and legal operations,” said Silvia Hodges Silverstein, the executive director of Buying Legal Council, an international trade organization for procurement professionals. “What we've seen in the past, is [the department is] not necessarily totally welcoming procurement in.”
While this relationship's improving—25 percent of respondents said they're partners with legal, up from 17 percent last year—Silverstein said there's still a disconnect between procurement and the rest of the legal team that may stem from a perception of procurement as inexperienced in the legal field. She said because some procurement professionals don't have a legal background, in-house lawyers may dismiss their input on new initiatives.
But even those without legal experience come to their jobs with a background in business—and that's their main role. According to Silverstein, in-house lawyers at a company can strengthen their relationship with procurement by introducing the latter to business aspects unique to law.
“If you are in an in-house position and you have a procurement team with no knowledge of legal, sit down with them and see if they can share some approaches that have worked in other professional services,” Silverstein said. Then, the two sides can collaborate on a new approach to legal spend that incorporates both of their knowledge.
Another hurdle to procurement's relationship with the legal department may be a perception that the two have conflicting objectives. There may be concerns that procurement will cut costs along with quality—but Silverstein said the best procurement teams emphasize quality for “sustainable success.”
“The goal needs to be get to better results for the company at the right price,” she said.
Other interesting findings in the survey include:
- More experience led to more savings. Procurement professionals with 10 or more years' experience saved companies 19 percent last year, compared to the 15 percent saved by first-year professionals.
- All survey respondents said they used a combination of traditional law firms and ancillary legal service providers, and 76 percent also used alternative/new law firms.
- Better capturing and analysis of spend data and reducing legal spend proved to be the most common goals of procurement respondents.
- Half of legal procurement respondents are planning to use legal project management tactics in the future. Some 27 percent of respondents already use these tactics.
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