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Briefing

How to maximise value from legal procurement reviews

9th January 2019

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Reviewing legal procurement arrangements can be a bittersweet process.

On the one hand, there’s the alluring potential of reduced costs, improved services and efficiency gains. On the other, there’s a lot of  work to set the process up, trawl through responses and manage some awkward conversations. Not to mention trying to assess whether all these technology solutions you keep hearing about would help or hinder you.

Too often the panel reviews we see, both as a law firm bidder or when consulting on process improvement, fail to deliver the intended benefits because crucial information is never collected.

Before starting a legal procurement review, ask yourself – ‘If I was responding to this tender, what information would I need to propose my best possible offer?’

Needs analysis

A great place to start is collecting data on your current legal needs, focusing on your priorities to address identified deficiencies and explore new possibilities. This data should be both qualitative and quantitative.

Relevant qualitative data includes:

  • Interviews with legal team members, internal clients and external lawyers.
  • Legal team strategy – how will this review help achieve your priorities (and key organisational goals)?
  • Work types
    • What are your most important work types, by reference to legal & organisational strategy?
    • Is your legal team’s time being spent on the most important work, or are they getting bogged down in low impact work?
    • What work should be done internally to deliver the best outcomes?
    • What level of quality & speed do you need for each work type?
  • Systems & technology – what do you already have that could be better used to achieve wins? (e.g. most teams don’t use their Microsoft suite to anywhere near its full potential).

Relevant quantitative data includes:

  • Historical internal vs external legal spend – many organisations are roughly 1/3 internal, 2/3 external spend; whereas better teams tend to be the reverse.
  • Market rates and ‘value adds’ – get reliable data on these from a source outside the firms.

Establish the right team to run the process

Look at your pipeline of work and consider who’s best placed within your legal team to lead and participate in the process. Consider the team head’s availability and the extent to which it may be awkward for them to play hard ball with existing relationships. If you have a procurement team, involve them and leverage their strengths.

Tender strategy

Decide what sort of strategy you want to run e.g. full tender, EOI, informal proposal.

Choose who to invite. Who would you love to work with? Who are you curious about?

Invite a mix of tenderers to give you a good cross-section of solution options. A good blend might include 2-3 top tier firms, 1-2 mid tier, <5 specialist and 1-2 secondment/’outsourced internal’ providers to enable you to flex as needed.

Tender content

Tell tenderers what sort of information you want, and in what level of detail, to avoid wasting your time and theirs. Key areas to consider include:

  1. What are your existing challenges?
  2. What are the key areas where you want to see improvements or efficiency gains?
  3. What sort of work do you want done internally vs externally?
  4. Are there any work types where you want fixed fees or other non-hourly rates?
  5. What are your expectations on service levels, fee estimates and variations?
  6. What data do you need to assess how well things are working, and adjust as needed?

Make it clear you want offers capable of acceptance, not fluffy answers requiring more work to progress to a binding contractual obligation.

Ask tenderers to provide their best price for the core requirements you’ve identified. Don’t get sucked into discussions about ‘value adds’ – they’re not actually free.

Managing the new arrangements

Once your review is complete, establish processes to manage the new arrangements, including:

  1. Ensuring the panel is adhered to unless there’s a good reason to go off-panel.
  2. Getting reliable data (both from external vendors and your internal team) to help you demonstrate the benefits you’ve achieved, or address any issues that arise.
  3. Monitor and respond to this data:
    • Reward good performance
    • Manage issues
    • Promote your wins!
  1. If you have a high volume of work, consider using a system other than Excel to help track, report and demonstrate value to your non-legal colleagues in terms they value and respect.

If you’d like any help with reviewing your legal procurement arrangements, please get in touch.

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