Why are GC’s sceptical of their procurement colleagues adding value when buying legal services? Last month further evidence emerged from the US that when it comes to buying external lawyers’ services, the procurement team is not usually on the email invite list.
I have had the pleasure of working with procurement colleagues on a number of occasions. Indeed I have run a legal team supporting a Global Supply Chain function. Their input is invaluable. I am astonished by the fact that so many GCs seem resistant to the concept of working with procurement: let alone inviting them to be part of the team.
Why is this the case?
The US article raises looks at the idea held by many GCs that you could not use procurement because buying legal services is some how different. The hoary old chestnut is quoted that purchasing them is not the same as buying widgets. Those who hold the view are taking a an approach that is too narrow and out of date.
Just because you cannot compare apples and pears does not mean that procurement has no role in purchasing legal services. The science of buying has moved on immeasurably in the last 20 years. The world is changing. Organisations are buying more and more services, particular in the post-industrial knowledge economies of the western world.
In-house lawyers often have to work on contracts for their organisations that purchase mission critical services such as HR, Facilities Management, IT support and Finance. The idea that legal services do not fit similar purchasing patterns is both wrong and patronising to our colleagues in other teams.
Then there is the idea that procurement managers are only interested in cost. Some may be, but many now recognise that there is more to “value” than “cost”. The GC must talk to their procurement managers and explain the elements in “value” that they need. In my experience, my procurement colleagues listened. In fact they were just as concerned with the risk profile of purchasing as they were with the costs element.
It is also said “one size does not fit all”. That is a crazy notion. Firstly, modern procurement teams are unlikely to have one size that they use. For those who are sceptical, I suggest that you read “The Purchasing Chessboard”. Secondly, all contracts have common issues, but they are all unique.
Finally there is the idea that legal teams are not spending the amounts that other parts of the organisation spend: as if this disqualifies the use of procurement. These days we are seeing legal fees being spent by in-house teams that make up a significant proportion of the £25 billion spent on lawyers in the UK alone. There must be scope for better purchasing in that number.
It is time for GCs to rethink their position Working with procurement will help you look objectively at the supply chain that you have created. A good purchasing strategy can actually assist you as a GC if you are implementing change management. You will also gain greater credibility with your finance team. Your procurement team may even champion you as a great example of teamwork within your organisation.
Don’t overlook procurement. They are there to help.