Silvia Hodges Silverstein: "The involvement of procurement changes the nature of the firm/client relationship"
Silvia Hodges Silverstein, Chief Executive Officer at Buying Legal Council, an international trade organization for professionals, responds to The Impact Lawyers´ questions about Buying Legal Council.
The Buying Legal Council is the international trade association for professionals tasked with sourcing legal services and managing supplier relationships.
Our members are legal procurement and legal operations professionals of large global companies as well as in-house counsel.
Our purpose is to support our members and friends through education, research, and advocacy to help them become more strategic and sophisticated about legal spend management.
We have the largest repository of knowledge on buying legal services, with 1700+ minutes of best practice videos, 40 “Cheat Sheets”, 250+ conference decks, 8 primers, 6 templates, a Legal Lesson Mini Law School for those new to the legal category. We continue to add to this body of knowledge and best practice.
We also publish our annual Market Intelligence Report for legal services, the most comprehensive guide for the legal category.
And we are about to launch a professional certification program in legal procurement.
We organize weekly best practices webinars on a wide range of topics concerning the buying of legal services as well as expert and peer-to-peer roundtables. In normal times we also hold legal procurement conferences in North America, Europe, and Australia. Let’s hope that we are able to do this again in 2021!
Our primary target group is legal procurement professionals, legal operations, and in-house counsel on the client side as well as pricing directors, project managers, marketing and business development professionals from law firms and other legal services providers.
We are the only trade organization for legal procurement and facilitate a constructive, useful dialogue between buyers and sellers. Our sponsors are law firms, legal services providers and law companies, ancillary legal services providers, and legal tech companies.
The involvement of procurement changes the nature of the firm/client relationship. We see a more process-driven approach, more focused on measureable performance and results than perhaps in the past. For clients today, it has to make business sense to work with a particular lawyer or law firm. As a consequence, lawyers may need to amend the way they work, how they integrate technology in their delivery of services, they need to be prepared to work with other alternative providers of legal services, and of course, they need to be able to scope the work, to put together budgets and to deliver the work and results within the budget.
So to some extent, the involvement of procurement means that lawyers need to become more business and tech savvy. It may also mean they have to work more closely with the pricing professionals in their firms and the project managers.
Companies suffering a business crisis due to COVID cannot wait too long and many are already asking their law firms and legal services providers for rate relief, more favorable payment terms and other cost savings measures. In fact, when we asked buyers of legal services how their organizations handle COVID-19, the top answers were (1) pushing non-urgent work to a later date, (2) cutting all non-essential costs, (3) bring more work in-house, and (4) demand additional discounts.
Of course, procurement’s value extends beyond cost cutting and includes strategic spend management through alternative fee arrangements, project management, leveraged team structures for matters etc. It is cost, efficiency and results. Any organization with significant external legal spend that does not involve procurement in 2020 is not practicing best practice!
The recession of 2008/2009 changed how corporate clients buy legal services. This recession continues to bring procurement to the forefront. Procurement professionals support legal departments by bringing a data-driven business process approach to selecting and managing law firms, alternative and ancillary legal services providers.
Often referred to as “the last frontier” for procurement, legal services used to be excused from in-depth cost analyses and professional management exercised in all other parts of the organization. Legal work was generally was considered too risky and too complicated. Today, legal is no longer exempt in large corporations with significant legal spend. Big pharma companies, banks, and insurances, as well as other highly regulated industries and government agencies have brought in procurement experts to analyze legal spend and hiring practices. Procurement now works with in-house counsel and legal operations and supports them with strategic sourcing and supplier management.
While clients’ behavior is always dynamic, changing and evolving, the last decade has seen a particular shift in the law firm/client relationship. For years, clients worked with their trusted advisors and firms focused on relationship building with in-house counsel. Now a data-driven business approach and a new, additional set of buyers have been added to the mix.
To remain successful, law firms need to understand their clients’ new approach to buying legal and ancillary legal services: Who is involved in the decision-making process? How do clients identify potential providers of services? How do they evaluate competitors? And how do they ultimately make a decision and select a firm? Only through careful analysis and better understanding of the challenges, needs, and expectations of prospective buyers can firms be confident that they are engaging with the clients on their terms.