When Richard Burcher and I first met at a breakfast seminar on legal pricing, he had no idea I was a procurement professional managing legal services provision. I’d gone along to the session aimed at GCs to see what the ‘other side’ (Richard) thought, and when the questions turned to the role of procurement in the firm-client relationship, I was somewhat dismayed to find that Richard and several of the GCs present weren’t exactly extoling the virtues of my profession…
After several minutes of 'strategies to manage unreasonable procurement teams', I could no longer sit quietly, and with barely disguised outrage launched into a rather passionate monologue on how unreasonable procurement teams were not the cause of client/firm relationship issues, and that we had an important role to play in that triumvirate.
I firmly believe that to be true. As organisations face ever increasing pressure to reduce third party costs, procurement's role has never been more important. We are the gatekeepers of supplier expenditure, and legal firms are, after all, a supplier just like any other. Yes, the relationships are important, and the service delivered is often complex and time critical, but you can say that about most areas of supply.
Legal services are subject to the same rules of value assessment as all other expenditure; on-time provision of the right service at the right price, and the ability to prove successful delivery to the people paying for it. The role of procurement is to source this service, and ensure that success can be measured objectively. And that's a challenge for everyone involved without positive engagement between the GC, legal firm and procurement…
So how do we build positive engagement between the three? In my experience we look for common ground in our objectives and go from there. Richard writes that:
'Pricing is a complex amalgam of traditional disciplines including cost accounting, statistical analysis, micro economics, macro economics, psychology, project management…'
Procurement is also all of these things, and therefore logically we should be able to build a strong, mutually beneficial working relationship, from that solid foundation of shared disciplines.
Practically, both sides need to invest time in getting to know each other and build an understanding of the sourcing process, from both the client and the supplier's perspectives. Successful organisations understand what is driving a client's demands at any given time.
Firms may occasionally perceive procurement demands as unreasonable but there will always be key drivers behind the position, supported by the GC, even if that support isn't overtly apparent.
An open, trust-based relationship with procurement allows you to find out what's driving those demands, and ultimately to decide whether you want that piece of work. Mature procurement functions understand that suppliers make value based decisions just as we do; and will respect your decision.
Sharing your rationale for choosing whether to bid will help us understand you better, and deepen our relationship – it may even change the way we scope opportunities in future. One thing is for certain, avoiding us will achieve none of those things, and ultimately a lack of engagement will damage the firm/ client relationship.
This leads me back to Richard's breakfast session. Different organisations have varying levels of engagement between Procurement and the GCs they represent, and firms need to invest time getting to know the team, and to understand that relationship.
Formulating strategies to avoid procurement will not work in the long term. It may not be visible to you but we play a pivotal role in helping GCs manage their external expenditure and demonstrate fee control.
So is procurement friend or foe to a legal firm? You'll need to invest the time to find out!
Steph is a highly experienced procurement professional who has worked within the Financial Services Sector for the past 15 years, and is one of a handful of Legal sourcing specialists in the UK.
Specialising in Legal Services procurement and now working with us at Validatum® exclusively assisting law firms, Steph has worked with FTSE 100 company Aviva's GC team for the last 4 years to source and manage complex Legal Panels, and is passionate about world-class value propositions and relationship management.