‘Procurement is Not the Enemy’, But Understanding the Process is Crucial for Law Firms
By Gregg Wirth
As today’s legal marketplace becomes more competitive and clients themselves become more savvy and demanding, no issue is more at the pinch-point of the lawyer/client relationship than procurement. While procurement is simply the client’s selection process for which firm will be put forward based on the firm’s pitch to the client, for the legal industry, it is the essence of the business.
And few know how vital procurement has become better than Nancey Watson of NL Watson Consulting, a procurement and proposal writing specialist, who has seen how a law firm’s pitch can be the determining factor in whether the firm gets a certain piece of business or not.
“There is definitely a disconnect between law firms and a client’s procurement process,” Watson said. “Procurement specialists at companies recognize this and law firms recognize it. And I want to open a dialogue between the two.”
Part of that dialog occurs at regular seminars Watson organizes. Her next one, entitled “How Procurement Impacts Law Firm Selection”, will be held on Feb. 8 in Houston. Speakers include Vincent J. Cordo, Global Sourcing Officer at Shell Global; Marco Perez, Senior Director and Head of Procurement USA & Legal Global Category for the Royal Bank of Canada; and Toby Brown, Chief Practice Officer at Akin Gump Strauss Hauer & Feld.
Part of the seminar is going to cover exactly how law firm proposals are evaluated by a client’s procurement people, Watson explained. “We want to discuss what does a company’s procurement professionals do with a proposal once they get it at their end. How do they analyze it? What are they looking for? What do they want — and don’t want — to see? And how do they transmit the results to the general counsel?”
“There is definitely a disconnect between law firms and a client’s procurement process. Procurement specialists at companies recognize this and law firms recognize it.”
— Nancey Watson, NL Watson Consulting
All important — and somewhat daunting — questions to be sure, but Watson explains it’s crucial for law firms to understand the other end of this process. “I want the law firm to know that procurement is not the enemy,” she said. “A client’s procurement people have a job to do, but their job is not just to cut prices — it’s to find the best law firm at the best price.”
Nuts & Bolts of Procurement
The panel is also going to analyze the nuts and bolts of the procurement process, including how companies craft their request for proposals (RFPs); the different types of pricing structures and alternative fee arrangements; and how to survive the dreaded reverse auction. “They are brutal, I don’t care what anybody says,” Watson noted.
Another facet of the process to be discussed — and one that many lawyers may not be aware of — is performance tracking done by the client. Companies will measure whether a law firm had delivered on time and on budget in the past, where the pricing came in, what the end result of the matter was, and other factors all of which get put into a performance metric that’s used by the client for evaluating the firm. “I think this is news to a lot of lawyers,” Watson said.
“I think a lot of law firms are surprised that procurement doesn’t only put their recommendations forward as to which law firm to choose, but they also monitor the service they are getting from the law firm, right down to the lawyer.”
With procurement’s growing importance in the relationship balance between law firm and client, the more the lawyer side understands of what goes into a client’s procurement decision-making process, the better for both sides.