Legal procurement vs legal operations

Want to run an agile, responsive legal department? Then you need legal procurement. Or is legal operations more important? In this current environment of change, it’s difficult to know which discipline will deliver more for your team.

Here’s a simple guide to separating your legal procurement processes from your legal operations and how both can help drive positive, long-term change in your organisation. (You can also check out the infographic version of this post here)

What is legal procurement?

Mainly originating in the United States, legal procurement’s primary focus is helping organisations purchase the best value legal services available. As it replaces more traditional value based purchasing models it hasn’t been without controversy, but is steadily finding support given its focus on striking a practical, measurable balance between price and value.

What is legal operations?

By contrast, legal operations is an internally focused, multi-disciplinary function. As such, it’s concerned less with the purchase of external legal services and more with optimising the delivery of legal services from within the organisation. Its primary components include strategic planning and financial, vendor and legal project management.

Who works in legal procurement?

Given legal procurement’s focus on tying value and price to the sourcing and purchase of external legal services, professionals in the field generally come from a professional procurement background. Legal training or experience is not a requirement for the role and responsibilities generally include:

• Advising on tender processes
• Managing fee negotiations
• Monitoring compliance with agreed engagement terms
• Collecting and evaluating data on service delivery

Who works in legal operations?

By contrast, legal operations professionals do tend to come from a legal background, although it isn’t a strict requirement. Their responsibilities include:

• Evaluating and implementing technology solutions
• Managing external service providers
• Monitoring and managing internal and external costs
• Understanding and balancing the role legal plays in the larger organisation

What are the challenges for legal procurement?

The challenges for legal procurement professionals generally come from within. Given the risk averse nature of the legal industry and its distrust of change, those working in the field must contend with lawyers’:

• Fear of damaging long-standing provider relationships
• Frustration with the time required to identify and brief new providers
• Distrust of non-legal professionals working in a legal environment
• Apprehension of new processes and fear of losing power and influence

What are the challenges for legal operations?

Like legal procurement professionals, legal operations specialists must also contend with the sometimes slow moving pace of the traditional legal environment. Their challenges include:

• Lawyers’ reluctance to separate legal practice from delivery
• A lack of resources to properly support the function
• Silos and a lack of collaboration and clear communication between lawyers, firms, corporate teams and technology providers

What are the benefits of legal procurement?

Despite the challenges attached to its institution, legal procurement offers a range of potential benefits, including:

• A practical and repeatable way of measuring and demonstrating the value the legal department delivers to the organisation
• Establishment of dedicated processes designed to ensure external legal service providers deliver value for fees charged, and in accordance with market rates
• Unbundling of legal services while matching them to the most appropriate provider
• Identification of opportunities for innovative costs arrangements and other cost savings initiatives

What are the benefits of legal operations?

Given its broad focus, the benefits of legal operations cover everything from decreased operating costs to increased efficiencies. Specifically, legal operations can help:

• Predict legal costs and provide an accurate forecast of the internal and external costs of running the legal department
• Collect and collate data used to identify trends, opportunities for savings and increased efficiencies
• Identify technology solutions designed to support efficient department and matter management
• Create a centralised repository of knowledge and establish repeatable, automated processes for the use and management of contracts, precedents, templates etc

The best approach may be a combined approach

At Lawcadia, we don’t think you should have to make a choice between legal procurement and legal operations. That’s why our Platform has been developed to give you the best of both worlds. Covering everything from sourcing and engaging the right providers, to how you manage your matters and control your spend, it delivers benefits that can be realised throughout your entire organisation.

For more information on how the Platform works, book a demo below or get in touch to arrange a confidential chat about your team’s needs.