Legal
Procurement… Tired of the Status Quo?
By
Reda Bennani: Consultant
There
has been much debate, in the legal sphere, about the emerging technologies and
the panoply of innovations embracing the practice. Law firms are looking for pathways
and routes that can sustain net income and manage legal and corporate spend. Yet
Procurement and Purchasing solutions are trailing far behind in mindshare.
So
first, let’s better understand the concept.
In a
traditional business context, the biggest source of cost in organizations is procurement
of capital items that are needed to run the everyday operations. Purchasing
solutions roles are hence well- defined as cost saving drivers. They deploy
analytical tools that keep track of firm’s spending and overall management of
vendor relationships and contracts.
There
is unanimity that when managed effectively, procurement can deliver substantial
benefits. As we know, the law firm business model is different. While other
industries benefited from the harmony of Finance, IT, Six Sigma lean processes
and procurement, decision makers within law firms don’t see how the benefit to their
bottom line. They are focusing on the lucrative single unit of the “ Magic
Billable hour”.
While
many would think of it as an eye opening process, many law firms are still
unwilling to implement metrics that keep costs down. Replacement of paper
forms, spreadsheets, and email with online tools, workflow and reporting
metrics that raise quality and productivity levels within the firm is a distant
pursuit. In concert many law firm decision makers would argue that cost
control processes would be a burden for employees with excessive controls for
low value items.
Within
a typical procurement solution communication is subject to a certain
pre-defined standards, and this is, in my view the missing dimension of the
whole subject, the existing solutions need an intermediary. One who can support
both parties to achieve the desirable goals. Negotiation of fees need to be
automated to a certain extent , but keep a subjective human implication that is
unique to the legal industry, owing to the fact that clients want commercial
and economic values while forging a solid relationship for the long term.
The current
procurement process within law firms, hmmm, actually there isn’t one… you might
ask why? Because it has always been that way , and there is A MUST for IT
solution providers as well as decision makers within the industry to cooperate
together to make procurement part of the law firm mentality, say, philosophy
and that requires a real input from CHANGE MANAGERS!