A US study into the impact of advanced procurement strategies on the purchasing of legal services has concluded that the business bottom line is being substantially improved by these endeavours.
The study, Buying Legal Services Survey – Insights into Legal Procurement, shines a light on the purchasing decisions, cost reduction efforts, spend analytics and emerging trends among 153 legal procurement professionals. The findings are impressive: legal procurement is transforming the way companies do business.
With the intervention of these procurement professionals, companies saw a 14.6% cost reduction in their legal spend. In instances where procurement teams were well-aligned with in-house legal teams and worked collaboratively with them, the savings rose to an average of 21%.
Dr Silvia Hodges Silverstein, Executive Director of the Buying Legal Services Council which produced the study, commented: “When procurement teams pair with the general counsel and legal department, the costs go down and the effectiveness goes up. The survey shows the savings can be measured in the hundreds of millions of dollars.”
The study found that legal procurement was no longer viewed as an “unchartered territory”: most of legal spend is now firmly under company review and active spend management courtesy of skilled procurement professionals. The convention of relationship-only business approaches to purchasing and vending legal services has, thanks to the rise of shrewd procurement expertise, largely been related to a minority practice.
The legal profession, in the form of both in-house legal teams and law firms, is now facing the reality of adapting to what is effectively a procurement-driven disruption to their conventional methods of doing business.
While this increases the pressure on them as never before to deliver as efficiently and economically as possible, there are opportunities as well as threats in the new trends toward efficient cost reduction crafted by procurement teams.
The Buying Legal Services Council states in the report that: “Legal procurement professionals contribute the most after five years of buying legal services.”
Steve has over 28 years of success as CPO, MD and Procurement BPO leader in a range of industries. Steve is COO at Odesma, responsible for Odesma’s delivery capability & infrastructure.