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Can Procurement be an effective collaborator in selecting outside counsel?
Yes, but…
First, a story.
Several years ago, I worked for a procurement firm handling sourcing for a client’s large law department. The client’s CXOs decided to require the law department to use a well-known consulting firm to run a major panel RFP.
The management team at my company was disappointed and did not want me to help. I convinced my superiors to let me provide assistance. I knew the client had plenty of important work that could be shared between the consulting firm and me. I also had an open mind. If the consulting firm had effective techniques, I could learn them.
A year later, the client and consulting firm finished the RFP. The client asked me to negotiate the resulting engagement letters. I immediately determined that the consulting firm structured the rate cards in a way that was incompatible with the client’s eBilling system. There were other errors as well.
I identified all issues, fixes, and next steps. I worked with the client’s head of contracting and eBilling manager to structure engagement letter templates and ensure the system was ready for the new arrangements. Then I got to work negotiating the engagement letters.
Two months later, 90 percent of the engagement letters were executed. Negotiations with one holdout dragged on for another month, but it resulted in more than $1 million of cost avoidance beyond the consultant’s RFP and eAuction results.
The consultant did not return again. My team handled RFPs going forward.
Understanding key parts of the law department’s operations function spelled the difference between the consulting firm and my effort. This acumen included the client’s outside counsel management program’s maturity and pricing, eBilling system processes, engagement letters, and savings levers.
This series spotlights Legal and Procurement’s relationship. We will elaborate on conditions where Legal can leverage Procurement’s skills and add more impact to a business’ cost management.
