BIDDING TO WIN: HOW TO SUCCEED WITH PROCUREMENT.

• Author: Silverstein, Silvia Hodges
• Position: Cover story

To help legal departments apply greater sourcing discipline, many companies involve procurement in buying legal services. Legal marketers are experiencing this shift as they work on pricing and answering RFPs. This article brings together recommendations on how to deal with procurement from articles published in the "Legal Procurement Handbook."

Insights on Legal Procurement

In the article, "CEOs Love Procurement: How to Deal with the Consequences," Tim Corcoran of Corcoran Consulting Group LLC warns that in "most sectors, there are a few providers whose reputation for excellence allow them to set prices with nary a concern that doing so will limit demand. Pragmatic and realistic business leaders know that very few truly occupy this space, and, therefore, there will be pricing pressure. Managing costs is an effective way to maintain margins, and often to improve margins, when clients eventually demand more for less."

With procurement's focus on price, many firms who have lost an RFP assume their competitors offered lower rates, even predatory unprofitable rates, Corcoran says. "They don't realize that the bid is just as likely to have been awarded to a competing firm with higher published rates, but accompanied by a clear, well-designed project plan and budget. For procurement, the measurement of an effective selection of supplier doesn't start and end at the rate card price. A low cost supplier that imposes transactional costs such as inefficiency, a steep learning curve and endless scope creep generated by poor planning is a poor choice."

Andy Krebs, global strategic sourcing manager at Intel Corporation, acknowledges that some sourcing professionals are all about cost. In "What Legal Procurement Really Wants," Krebs says that "[unfortunately this 'cost is king' persona is painted across the profession with a wide brush." He believes that sourcing experts who look at the overall outcome, the effects on the corporation and how their actions shape the landscape of the industry are closer to reality. These procurement professionals are driven by the desire to create an advantage for the legal team and their employer. They apply their knowledge and skills garnered in other professional services areas to legal services.

Krebs believes that procurement can add value to RFPs, supplier management, market analysis, supplier negotiations and streamlining the buying process. RFPs are "a necessary evil in any spend area," he says. "They enable decision makers to view different ideas and strategies on how to resolve the issue at hand." Procurement professionally manages...