The past decade has seen many trends re-shape the legal landscape including the amalgamation of law firms, the growth of legal process outsourcing, the rise of digitisation and the influence of technology.
Of all of these, arguably the most significant for the future will be the ways in which technology and data will shape the way that legal advice and legal services are delivered and received.
The ways in which companies and government organisations buy outside legal services is also rapidly changing and this is the primary focus of this guide.
The increased sophistication of legal procurement is highlighted by the Boston Consulting Group in its 2016 report on Legal Technology, stating that increasingly, “general counsels are accompanied by professional procurement specialists during pitches.”¹
These specialists assist with the negotiation of fees and agreements. More than a perfunctory role, the procurement function brings process, rigour and a greater level of negotiation to the table as organisations strive to “get more for less” which is the theme of our post-GFC corporate world.
The Buying Legal Council, the official organisation for legal procurement professionals in the USA, highlights that most Fortune 500 corporations employ legal procurement teams, whilst many mid-size companies hire consultants to assist in this field.²
According to the Buying Legal Council, “Legal used to be off limits for Procurement. Legal services were deemed too special, too complex, too unique to be sourced by anyone other than the legal department. This view has changed and technology has made it possible.”²
In Australia, outside of the government sector, the data around the role of procurement professionals in the purchasing of outsourced legal services is unknown. However, our qualitative market research suggests that it is rare and certainly not becoming ubiquitous as suggested in the US.³
In sizeable companies from Australia, it is very common to have a procurement team that is responsible for all buying, except for legal services. Legal is considered highly complex and not easily catalogued. For these reasons, among others, it has stayed outside the remit of the procurement and purchasing function in this region.
References:
¹ Veith, C., Bandlow, M., Harnisch, M., Wenzler, H., Hartung, M., & Hartung, D. (2016). How legal technology will change the business of law. The Boston Consulting Group and Bucerius Law School. Retrieved 3 June, 2016, from: https://www.bucerius-education.de
² Silverstein, S. H. (2015). Research report: The state of legal procurement. In Silverstein, S.H (Ed), Legal Procurement Handbook (p. 126-132). USA: Buying Legal Council.
³ Silverstein, S. H. (20 February, 2016). Little is left untouched by Legal Procurement. Retrieved 3 June, 2016, from: https://www.silviahodges.com
