Page 90 - Leaders in Legal Business - PDF - Final 2018
P. 90
What You Should Know
About Legal Procurement
Dr. Silvia Hodges
Silverstein1
Executive Director,
Buying Legal Council
In many large companies, legal procurement professionals now work alongside in-house
counsel to buy corporate legal and ancillary legal services. They analyze, use data and develop
evidence-based rationale for major reductions in legal spend. Choosing a law firm has to make
business sense. The 2008 financial crisis accelerated the process for the adoption of legal
procurement, but publicity about billing practices, big ticket spending by large corporations, and
corporate profit pressures are at the root of
this change. The same development
happened in other professional services,
including management consulting and tax
and audit services.
Companies with significant legal
spending were the first to involve
procurement in the purchasing of legal
services providers well before the crisis, in
the early/mid-2000s. Highly regulated
industries first embraced legal procurement,
particularly the pharmaceutical industry and
financial services, as well as energy
companies and utilities.2 Today, many large companies around the world from a wide range of
industries employ legal procurement professionals. There is no reason to believe that large
corporations will return to the traditional approach of in-house counsel as sole buyers of legal
services.
Why Do Your Clients Involve Legal Procurement?
It is typically the organization’s top management, often the CFO, who mandates
procurement’s involvement with the buying of legal services. The goal is to help in-house
counsel better manage cost and reduce supplier spending, and to ensure that they buy legal
services in compliance with company policies. Other drivers of bringing in procurement include
1 Dr. Silvia Hodges Silverstein is executive director of the international trade organization Buying Legal Council (www.buyinglegal.com), a
lecturer in law at Columbia Law School, and an adjunct professor at Fordham Law School.
2 See, e.g., Heidi K. Gardner & Silvia Hodges Silverstein, GlaxoSmithKline: Sourcing Complex Professional Services 2, 4 (Harv. Bus. Sch. Case
No. 414-003, rev. 2014); Silvia Hodges, Power of the Purse: How Corporate Procurement is Influencing Law Firm, LAW PRACTICE TODAY (Jan.
2012), https://www.americanbar.org/content/dam/aba/publications/law_practice_today/power-of-the-purse-how-corporate-procurement-is-
influencing-law-firm.authcheckdam.pdf [hereinafter Power of the Purse].
76
About Legal Procurement
Dr. Silvia Hodges
Silverstein1
Executive Director,
Buying Legal Council
In many large companies, legal procurement professionals now work alongside in-house
counsel to buy corporate legal and ancillary legal services. They analyze, use data and develop
evidence-based rationale for major reductions in legal spend. Choosing a law firm has to make
business sense. The 2008 financial crisis accelerated the process for the adoption of legal
procurement, but publicity about billing practices, big ticket spending by large corporations, and
corporate profit pressures are at the root of
this change. The same development
happened in other professional services,
including management consulting and tax
and audit services.
Companies with significant legal
spending were the first to involve
procurement in the purchasing of legal
services providers well before the crisis, in
the early/mid-2000s. Highly regulated
industries first embraced legal procurement,
particularly the pharmaceutical industry and
financial services, as well as energy
companies and utilities.2 Today, many large companies around the world from a wide range of
industries employ legal procurement professionals. There is no reason to believe that large
corporations will return to the traditional approach of in-house counsel as sole buyers of legal
services.
Why Do Your Clients Involve Legal Procurement?
It is typically the organization’s top management, often the CFO, who mandates
procurement’s involvement with the buying of legal services. The goal is to help in-house
counsel better manage cost and reduce supplier spending, and to ensure that they buy legal
services in compliance with company policies. Other drivers of bringing in procurement include
1 Dr. Silvia Hodges Silverstein is executive director of the international trade organization Buying Legal Council (www.buyinglegal.com), a
lecturer in law at Columbia Law School, and an adjunct professor at Fordham Law School.
2 See, e.g., Heidi K. Gardner & Silvia Hodges Silverstein, GlaxoSmithKline: Sourcing Complex Professional Services 2, 4 (Harv. Bus. Sch. Case
No. 414-003, rev. 2014); Silvia Hodges, Power of the Purse: How Corporate Procurement is Influencing Law Firm, LAW PRACTICE TODAY (Jan.
2012), https://www.americanbar.org/content/dam/aba/publications/law_practice_today/power-of-the-purse-how-corporate-procurement-is-
influencing-law-firm.authcheckdam.pdf [hereinafter Power of the Purse].
76
