Introduction
Across corporations, legal services remain one of the most elusive procurement categories. While many procurement executives have established strong control and oversight over purchasing for areas ranging from direct materials to logistics, effective management of legal spend remains a challenge. This challenge is often routed in a false perception that typical procurement strategies do not apply to a category where relationships are of the upmost importance. While the legal space certainly requires a degree of specialized procurement knowledge and understanding of category nuisances, there is the potential for significant incremental value and savings when the procurement and legal teams collaborate.
The sheer amount of spend allocated to legal services is in and of itself enough to warrant the attention of most procurement executives. Legal industry revenues in the United States exceed $250 billion annually, and in the decade prior to the economic crisis, legal spending grew at twice the rates of inflation. These substantial cost increases can be counteracted by progressive procurement strategies focused on effectively measuring the value delivered from law firms.
This paper will outline key strategies that can be leveraged by procurement leaders to successfully engage with legal professionals and drive value beyond hourly rate reductions. A procurement organization that is equipped with strong understanding of emerging industry trends and best is class engagement strategies in the legal space is well positioned to build a sustainable, mutually beneficial interdepartmental relationship.