Compiled by Monica Bay
This is the first of a new series of “almost-raw press releases” of probable interest to our CodeX community. (It’s a faster way to get up important news when I don’t have time to do a heavy edit.) However, I will always remove “solution” and “revolutionary” [unless Steve Jobs is in the sentence]. I remain absolutely determined to eradicate these two utterly over-used and meaningless words. : ) I also have quickly trimmed it for style clarity and repetitive statements, for faster reading. —Monica Bay
Source: Leora Kaplan, Associate, Baretz+Brunelle
Corporate Procurement Departments Increasingly Leveraging Data and Technology in Selecting Outside Counsel, Survey Reveals
The Bloomberg Law/Buying Legal Council survey also demonstrates need for strong business intelligence
Arlington, Va. (Feb. 27, 2017)—A survey from Bloomberg Law and Buying Legal Council reveals that the top priority of corporate procurement professionals (who are charged with managing legal spending) is reducing the number of law firms used by their organizations.
The findings confirm the accelerating shift away from relationship buying and selling in the legal industry to decision making driven by data and technology. The 2017 Legal Procurement Survey also suggests that procurement professionals are having substantial success in reducing their employers’ legal spending. Respondents claimed responsibility for an 11% reduction in legal spending on average—a number that increased to 23% for those who self-identified as being highly successful. The full report can be accessed here.
“The survey underscores the increasing acceptance and effectiveness of procurement professionals in managing legal purchasing,” said Dr. Silvia Hodges Silverstein, Executive Director of Buying Legal Council. “It is
a revolution based on discipline, process controls, and analytics advocacy.”
The survey also uncovered a strong need for business intelligence technologies. More than 70% of survey respondents regularly engage in at least two activities that rely on business intelligence—pre-purchase evaluation of legal services providers and providing decision-grade data to the legal department. Additionally, those procurement professionals who identified themselves as being most successful spend most of their time issuing RFPs and evaluating RFP responses.
The survey points to multiple indicators that procurement professionals will be directing their work to fewer firms in 2017 and beyond. Respondents identified their top job priority over the next 12 months as consolidating their preferred provider list. Silverstein says this consolidation is driven by purchasing economies from using fewer suppliers.
“The survey results confirm the accelerating trends relating to heightened competition in the legal market,” said Scott Mozarsky, President of Bloomberg Law and Bloomberg BNA’s Legal Division. “In a market that is dealing with disruptive factors ranging from new technology to increased global consolidation among service providers, in-house legal departments and outside law firms are looking for ways to become more efficient and effective, including putting in place systems that deliver superior business intelligence and create efficiencies in their everyday work.”
“The increased use of procurement initiatives by businesses when considering their legal services needs is both a fact of life for the legal industry and indicative of smart corporate management, appropriately focusing on quality of service and cost management,” said David Scherl, Chairman at Morrison Cohen. “From the law firm’s perspective, it should be embraced as a way to communicate your law firm model, including its service offerings and value proposition. Ultimately, it provides those shops that can take advantage of the process an opportunity to differentiate between their firm and their competitors.”
Survey respondents covered a wide range of industries, with more than half concentrated in the regulated areas of banking/financial services/insurance; chemicals/pharmaceuticals/biotech; and energy/utilities. A majority of survey respondents worked for companies with more than $25 billion in annual revenue, while 16% worked at companies with less than $1.7 billion in annual revenue.
(Deleted: About: Bloomberg BNA, Bloomberg Law, Buying Legal Council.)
• The complete 2017 press release.
• CodeX Book Club: Legal Procurement Handbook March 23, 2016
• Calming Big Law/Clients Friction (March 21, 2016)
• Need to Know (“Tinder or a Match?”) March 18, 2016.
Monica Bay is a CodeX Fellow and a freelance journalist and analyst. She is a member of the California bar. Email: firstname.lastname@example.org. Twitter: @MonicaBay.
Cover image: Clipart.com