Wednesday, December 19, 2012

Guest post: Procurement's increased role in sourcing Legal Services

Legallyours welcomes a guest post from Jason Winmill, Partner at Argopoint Consulting LLC. Argopoint has designed award-winning, nationally recognized legal sourcing approaches for leading Fortune 500 companies.

Sophisticated sourcing professionals are introducing innovative sourcing solutions to their legal departments, and in doing so, delivering millions of dollars in savings. Successful collaboration between sourcing and legal can manifest itself in many ways (e.g., exploring alternative supplier models, introducing alternative fee arrangements, issuing RFPs, introducing supplier competition through e-auctions). Legal Process Outsourcing (LPO) is among the beneficiaries of strategic interactions between sourcing and legal. Introducing an outsider perspective (i.e., sourcing) can often help drive legal department conversations away from “How can we preserve what we have?” and towards “How can we continue to capitalize on opportunities in the legal marketplace?

The media is gradually beginning to pick up on these successes: a recent article in the Wall Street Journal noted that several companies (including GlaxoSmithKline, Toyota, Sun Microsystems, and eBay) are using competitive bidding and e-auctions to purchase legal services. As with other important services, effectively sourcing legal is a delicate process with major upside.

“Compared to a few years ago, legal sourcing is now an area where I see major companies investing. Doing legal sourcing properly does require a real investment. It’s not a category where you can watch a few episodes of Law and Order and fake it,” notes Justin Ergler of GlaxoSmithKline Legal Services Procurement, a rising star in this emerging field.

Legal services are highly complex, sensitive, and high-risk; supply management professionals face the difficult challenge of building credibility in the legal department and moving along a steep learning curve without losing sight of short-term savings goals. In spite of these difficulties, savvy sourcing and procurement departments are earning the appreciation of their legal colleagues and guiding meaningful change in their legal departments.

Potential Benefits to Including Sourcing in Legal Projects:

1.     Tools to Facilitate Rigorous Provider Selection: Leading sourcing departments typically have tools and processes (e.g., RFPs, e-auction technology) that can simplify the legal sourcing process. When customized appropriately, these tools can help legal departments obtain greater visibility into their provider network while collecting decision-grade data from alternative providers.

2.     Exposure to a Wide Range of Provider Models: Seasoned sourcing professionals tend to have experience across a range of categories and service areas. While not all of these experiences will translate directly to success in legal, sourcing professionals are often well-positioned to see opportunities for increased efficiency within legal provider models.

3.     Detachment from Long-Standing Provider Relationships: Sourcing professionals are typically not burdened by professional or personal relationships with legal service providers. This outsider status can be appealing when communicating competitive sourcing initiatives to potential and existing providers.

-Jason Winmill, partner at Argopoint LLC
Read this article to learn more about legal sourcing.