Legal departments are experiencing increasing pressure to explain their outside counsel hiring practices (and resulting costs) to management, while still bearing responsibility for securing high-quality legal services. Despite the procurement department's expertise in contacting suppliers of goods and services, legal departments often dismiss their ability to add value in sourcing legal services. At the same time, Procurement finds fault with Legal's alleged lack of business understanding in selecting and negotiating contracts with outside counsel. Recognizing this inherent tension, Corporate Executive Board analyzed how legal departments work with procurement departments in obtaining outside counsel.
The following list summarizes key recommendations CEB developed in conducting this research:
Build a collegial relationship--Law firm selection can be a "touchy" point of conversation for lawyers who often choose law firms based on prior personal and working relationships. Procurement and Legal must build trust establishing mutual objectives to lay the foundation for a successful partnership. Agreeing upon initial objectives may allay any concerns Legal has about losing control of the selection process.
Institutionalize the partnership through the creation of a mixed team--Prior to partnering, Legal and Procurement should create a team that manages and oversees their collaboration, preferably with executive support.
Test the partnership--In order to overcome key objections, Legal and Procurement should conduct a non-binding test phase prior to establishing a fixed framework defining the partnership. During this period, aspects of the partnership can be adjusted to uncover roadblocks, surface unspoken assumptions and ensure that the roles of each department are clearly defined.
Establish a clear partnership framework--Legal and Procurement should meet to discuss the framework for their sourcing partnership, discuss roles and set expectations. The legal department may choose to use the initial meeting to educate the procurement function as to its priority selection criteria for outside counsel. Additionally, Legal may choose to create a roster of preferred vendors for each matter type, which Procurement could then use to disseminate RFPs.
Identify and harness core strengths--The different strengths Legal and Procurement possess can yield valuable benefits when combined, provided that the two functions identify the unique abilities of the other...