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Six years ago, I wrote an article for Law.com called “Procurement Process Embraces Legal Services” and concluded that “procurement professionals have become much more active and influential within their corporate legal departments because the general counsel is under tremendous pressure to reduce costs in the economic downturn.” While chief legal officers still bear that weight, the conversation around law department management is a much richer one, as evidenced by the themes of innovation, value, client service, and transparency, which the Buying Legal Council's 2018 Legal Procurement Conference showcased on September 5 and 6.

Innovation and Transparency

Software AG general counsel Dr. Benno Quade captivated the audience with his discussion of designing his own dashboard for tracking and evaluating legal spend. “Lawyers are born coders because we are taught to work with yes and no questions,” he advised.

Despite the challenge of internally managing 400,000 lines of code, he noted, “Transparency is critical and data-driven discussions of invoices are far more productive.” At his company, legal is perceived as one of the organization's most innovative groups. “Lawyers and procurement leaders should be interested in coding because it is part of the future of work,” he remarked.

Client Service

Justin Ergler, the director of alternative fee intelligence and analytics at GlaxoSmithKline (winner of the Buying Legal Council's 2018 award for innovation), and Keith Maziarek, the director of pricing and legal project management at Katten Muchin Rosenman, offered an insightful presentation on empowering the relationship between legal departments and their outside counsel. “Law firms should present their new technology and describe how it benefits the client's work,” the duo suggested in discussing the alignment of communication and transparency. “Law firms should also provide a value report to their clients,” they added.

Value

International legal pricing consultant Richard Burcher, the founder and managing director of Validatum, highlighted the inherent challenge of procurement. “There is a very real disconnect between price and value,” he said. “Understanding the pricing of risk is critical,” he added.

The need for collaboration in harmonizing these factors was the focus of a panel discussion moderated by Rebekah Mintzer, an editor at ALM's Corporate Counsel. “Legal services procurement should be part of a broader approach,” advised Marty Harlow, the procurement director for global legal services at GlaxoSmithKline. “Procurement is Switzerland; we focus on managing the process, providing decision-grade data, and staying in our lane,” he added. In terms of getting started, “court reporting and labor and employment outside counsel spend are the easiest areas in which to begin applying procurement to legal services,” noted Vandana Dhamija, the founder and CEO of Legal Operations Consulting.

Despite the variety of ways to apply procurement, it is critical to focus on where the organization will realize the greatest benefit. “There are challenges to swinging for the fences in procurement,” said Alan Bryan, the senior associate general counsel for legal operations and outside counsel management at Walmart, who encouraged coordination and a balanced approach with the legal department.

“I think it's the reality that in-house counsel – working closely with procurement professionals – are quickly becoming the 'lawyer as general contractor,' assembling the right mix of legal service providers, outside counsel, and in-house resources to handle their legal needs efficiently and cost-effectively,” says Christopher Schultz, the general counsel of Level 2 Legal Solutions, a provider of managed review services and signature sponsor of the conference for the second consecutive year. “Law firms that are focused on offering to their clients defensible, repeatable processes with robust quality and cost-control built in are the firms of the future.”

While the thesis of my six-year-old article remains as current today as it was in 2012, there has been a remarkable alignment of procurement and the provision of legal services that is fueling a robust conversation about innovation, value, client service, and transparency. In fact, “The conference was another illustration of the significant progress the BLC community is making in shifting from supplier-driven to buyer-centric in the legal services space,” concluded attendee, Jim Delkousis, the founder and CEO of Persuit, a software platform designed to streamline the procurement process for corporate legal and procurement teams and their law firms.

 

Attorney and legal industry analyst Ari Kaplan presented “Beyond the Numbers: What Pricing Professionals Can Learn from a Decade of Legal Industry Benchmarking” at the 2018 North American Legal Procurement conference. He is an inaugural Fastcase 50 honoree, serves as the principal researcher for a variety of widely distributed market research reports, and has been the keynote speaker for events worldwide. Learn more at AriKaplanAdvisors.com.