Intelligent procurement is not just about saving the firm monies; it’s also about properly evaluating the ins-and-outs of deals, so you end up with savings, yes, but also better quality service and improved vendor relationships in the long run.
This is especially important in Big Law, as these firms tend to engage in transactions across the globe. Vendors benefit by having one go-to person. As per Law.com’s Large Law Firm column from a few years back, which explained procurement beautifully, “Vendors can benefit…by having more centralized points of contact who are able to discuss…expanded strategic services that the vendor may be able to provide.”
Procurement is not only in charge of vendor management and relationship development. It works to help your firm, “as a whole, work more efficiently, to achieve your business objectives.”
If you asked a few colleagues exactly what procurement is, chances are they’d be a little lost. “The role of procurement is often misunderstood,” explains the author, White & Case’s Karen Asner (pictured here), commercial litigator and the global Administrative Partner from 2004 to 2007. “The procurement team is not a group of ‘spend cops’,” says Asner. Instead, she explains, they are concerned with achieving quality by “leveraging…spending to create strategic partnerships and pricing agreements with vendors that will deliver high-quality goods and services…”
And it does this while seeking competitive pricing and maintaining a high-level of customer service. By including the procurement team early on in the sourcing cycle—discussing requirements and needs—you’ll allow the team to adequately conduct RFP’s, perform necessary vendor and/or product due diligence, manage the negotiation process and arrive at all-around better prices on your behalf. As an example of what can be accomplished with fully-utilized procurement, in 2007, White & Case achieved $12 million to $15 million in annual recurring savings, reports, Asner.
What do you need to provide to your procurement team to get them to work most effectively? Again, do this early on. Give them background information and a history of the project. Are you interested in purchasing a commodity or a strategic service? What’s the budget? Are you looking to buy at “the best” possible price, and how do you plan to sustain competitive pricing?
And, as Asner explains, procurement’s job doesn’t end after a service/goods provider is selected. There’s still compliance to monitor. “[They check]…correct invoicing and [ensure that] payment for…services delivered is in line with the terms outlined in the contract.” And because procurement can help the firm trouble-shoot before the fact, they’ll “mitigate risk, [ensure that the firm] avoid[s] paying any unnecessary expenses and limit[s] duplication of services across groups or functional areas that otherwise might not communicate.”
When you add up all the administrative tasks being performed across the board by the procurement team, it’s easy to see why they can, without a doubt, affect your firm’s bottom line. For more, go to: http://www.law.com/jsp/llf/PubArticleLLF.jsp?id=1182243947655&rss=newswire