You know them. Enron, Merrill Lynch, Arthur Andersen. And how could you forget Martha Stewart? They are all clients that realised the importance of legal spend and put forth the money to secure first-rate legal counsel. While the typical global company’s total bought-out spend is in the range of 60%-70%, the spend on legal services can be up to 15% of this.
Professional purchasing involvement in negotiating the provision of legal services may or may not be a new threat, but it is definitely something law firms need to protect themselves against. Increasingly, buyers within client organisations are realising the importance and magnitude of legal services spend and are applying professional purchasing tools and techniques to these services. Because professional purchasers find legal services an ‘easy’ target, mainly due to the fact that they are deemed to ‘save’ the client or company as opposed to adding to its bottom line, law firms must build a robust defence. How can law firms protect their revenue, increase profit externally and at the same time control their own costs internally?
