Law firm sourcing, managed strategically, has become an increasingly critical aspect and "must have" of legal department strategy at Fortune 500 companies.
Law Firm Sourcing (Legal Services Sourcing)
Law firm sourcing, managed strategically, is becoming a "must have" at many legal departments. Argopoint has worked with some of the world's most respected legal departments to develop and implement sustainable legal and law firm sourcing plans. Our approach allows companies to focus on “critical growth strategies” while cultivating effective business relationships with law firms and leading legal service providers. Argopoint’s proven approach with law firms uncovers competitive advantages for corporate legal departments leading to short-term savings and long-term value.
Law Firm Sourcing (Legal Services Sourcing): Objectives
Law Department Strategic Sourcing is a key area for corporate legal departments that are under pressure to deliver results in a high-risk environment and are often skeptical of corporate cost-management initiatives. However, particularly in the current economy, legal departments must keep costs down and maintain quality services that provide a unique entry-point for sourcing initiatives.
Legal department strategic sourcing is the process of continual assessment and enhancement of corporate legal spending. A systematic approach to corporate legal outsourcing has become an increasingly critical aspect of legal department strategy. When carefully designed and implemented, strategic legal sourcing can reduce outside legal costs by as much as 30 percent.
Law Firm Sourcing (Legal Services Sourcing): Overview
Under pressure to deliver results in a high-risk environment, large companies often lean on outside counsel and other legal service providers to help manage the unpredictable ebb-and-flow of work and efficiently maintain the required expertise. In seeking outside counsel, legal departments focus on reducing supply costs while leveraging legal relationships to drive innovation.
Where do companies go wrong? When under extreme pressure to manage costs, legal departments sometimes act rashly, taking a shortsighted approach to reducing expenses. Without a comprehensive approach to managing legal sourcing, companies search for the quickest way to meet immediate reduction targets. This can lead to the disruption of long-established relationships with qualified and conscientious service providers. In some situations, short-term savings pressures coupled with poorly-developed sourcing strategies can lead to a decrease in the quality of legal services.
In other cases, legal departments eager to find immediate cost savings rely on percentage discounts and other under-developed alternative compensation models. Without a holistic sourcing approach, service providers are able to find other ways to maintain their profit margins. Costs inevitably reappear when legal departments fail to design sustainable strategies supported by objective metrics. This often causes legal departments to become mired in an endless cycle of short-term cost cutting.
Law Firm Sourcing (Legal Services Sourcing): Solutions and Savings
Each legal department is a unique entity with specific sourcing needs and challenges. Keeping the inherent differences of each legal department in mind, Argopoint utilizes a tailored approach to meet our clients’ diverse needs. The depth of our experience in working with legal departments across a range of industries informs our ability to modulate the scope and intensity of our engagements. Among other criteria, we evaluate the existing approaches and capabilities of our clients to design unique sourcing strategies that are optimal for specific legal departments.
Our approach begins with a thorough understanding and assessment of the department’s current operations and specific legal service needs. We develop a focused diagnostic to identify sources of competitive advantage and rank opportunities based on quality and cost analysis. Through our client assessment, we are able to develop and deploy a department-wide methodology and toolkit for negotiating with outside counsel. Through these tactics, we are able to identify and secure long-term strategic partnerships with outside counsel based around the concept of value to the client and mutual interests.
Outside of our own direct experience, we have seen too many cautionary tales for us to take this process lightly. Sound operational strategies coupled with poor execution can result in millions of lost dollars. Argopoint provides its clients with dedicated support through the entire strategic sourcing process. From designing a practical and implementable strategy, to negotiating with outside legal firms, to making the organizational changes necessary to sustain results, our clients can be confident in our dedication to their department objectives.
Due to our innovative strategies and proven implementation approach, Argopoint has consistently helped clients achieve savings from 10-30% in their business relationships with top-tier law firms and legal service providers.
Law Firm Sourcing (Legal Services Sourcing) Key Questions
1. Does your corporate in-house legal department have a formal legal sourcing strategy?
2. What are the sourcing goals and major impediments your legal department is faced with?
3. Does your legal department face pressure to reduce costs while maintaining quality?
Read more about the way Argopoint utilizes deep industry experience and customized tools to maximize the value of legal relationships:
- "Working with In-House Lawyers: A Significant Sourcing Opportunity" from Inside Supply Management
- "Managing the High Cost of Legal Services" from Purchasing Magazine
"Legal Sourcing Steps into the Spotlight" from Argopoint Monograph