This past weekend, I caught up with a bunch of friends on a visit to Mt. St. James. One friend is now a partner in the corporate section of the business services group of a large law firm based on the west coast of the US. He specializes in counseling corporate clients on a wide range of business and legal matters, including corporate governance, securities law, SEC compliance, negotiating mergers and acquisitions, and capital financing.
We talked about the difficult business environment for corporate law over the past few years, particularly in the financing area, and some of the new business challenges facing corporate law practices. I asked if his firm was starting to see the involvement of procurement during the bid process for new business. ‘Not yet’ was his quick answer, but noted that procurement is all over the client management and billing process at some companies. “There are a few clients where every project, no matter the size, is now linked to a PO [purchase order] with a targeted budget,” noted this Legal Eagle (slang term for a law professional). “We’ve had to institute a more formal type of project management on some of the larger projects and think through our staffing and hiring in a much more comprehensive way.” As we talked more, it was clear to my friend that this was the start of a big trend in corporate legal services.
What was most instructive from the conversation was my friend’s rather matter-of-fact tone about the evolving landscape of his primary line of business. He wasn’t wistful or complaining, just describing the ‘New Normal’ as applied to legal services. It made sense to him that clients wanted to apply a level of rigor to the management of his firm and that his staff would be held accountable for its fees and quality of service. This wasn’t viewed as disruptive or problematic because it makes good business sense for his clients to do this. His firm had already taken the necessary steps to prepare for this new type of client/project management and plans to be proactive in how it internally manages and delivers its projects.
Although it didn’t make our list of Top 10 Categories to Source in 2010, sourcing legal services presents a good opportunity for savings for many enterprises; improving the supplier relationship management of outside counsel also presents a good opportunity. In my mind, there are no ‘sacred cow’ categories, so legal services spend is fair game – the complexity in sourcing this category was a main reason why it did not make this year’s list. And, a good number of enterprises are focusing on it – like BT which is outsourcing part of their in-house team and Rio Tinto which is working with a legal service provider to handle some outside counsel work in India. Even if the savings estimate (in the link provided) for Rio Tinto is off by 50% for this upcoming year, the financial impact is still huge.
If you have recently sourced this category or have started looking at it (to source or manage), we’d love to hear about your experiences – Please reply below or send an email to abartolini (at) cporising dotcom.
