2 Replies Latest reply on May 25, 2010 7:33 AM by Lauren Denton

    Sourcing in Legal

    Lauren Denton Journeyman

      I am looking to use ARIBA for a legal RFx.

       

      Does anyone have:

       

      1. Any examples where this has worked

      2. Information on using ARIBA for legal processes.

       

       

      Any feedback would be greatly appreciated.

        • Re: Sourcing in Legal
          Sharon Horton, PMP Master
          Lauren,  We've assisted a couple of customers use Ariba to source legal services.  There were 3 specific services we worked with:  Immigration, Intellectual Property (Pattent Litigation in particular) and Legal Support suppliers (research, investigation and paralegals).  As usual, the list of requirements and qualifications would direct the specifics of the survey.  For the outside counsel RFPs, we focused both on the qualifications of the firm and the qualifications of the individual attorneys proposed for work.  A small practice was acceptable, as long as the attorneys proposed had substantial experience.  For example, we had one very small practice that applied, but their practice was 50% appellate court experience for the past 15 years in precisely the field we were looking for (patent litigation).
          • Re: Sourcing in Legal
            Nick Cherrone Newbie

            Hi Lauren,

             

            As you are probably already aware, the market conditions are very favorable to legal buyers at this time so great job initiating this effort. Ariba has been active in this space for a while; however, interest from clients has really gained traction as internal counsel begins to feel the pressure to control costs while also being asked to do more with less.

             

            So now where do we start?  First of all, we recommend building cohesion and support from your lead counsel or CLO.  Often this step is the most challenging part of the process yet without this necessary due diligence, project success becomes highly unlikely.  Remember the goal is actionable results with implementable savings, not just identified savings from a sourcing effort.  Cost reductions are fairly easy to achieve while driving value is much more difficult. Support from your counsel will add credibility to your results and help ensure your focus is on value, and not cost reduction alone. 

            Counsel involvement on your team is vital to the construction of RFx documents that reflect the unique legal needs of your business while also meeting value expectations.   Procurement professionals are tremendous at providing framework and facilitating process but the devil is in the details when it comes to content development. Key stakeholder assistance helps uncover specifics that often go unnoticed by those not involved with the day to day.

             

            Now that you have built a cohesive team it is necessary to base line requirements, historic spend, and project goals prior to drafting RFP language.  Ariba approaches this step through data collection and collaboration with stakeholders.  Our process involves the use of standardized templates to gather necessary data from incumbent firms.  The goal of this step is to identify, at a minimum, all spend by firm and by practice area.  The level of data granularity helps guide strategy.  Most likely, all of your legal spend will not be addressed in one single sourcing initiative so it may be necessary to develop a wave plan.  The next step is to classify spend as strategic or routine.  As part of the data analysis process, firms who provide very specialized or strategic services (that may not be able to be competitively quoted) should be identified for potential partnering through direct negotiation.  Request that these firms prepare an action plan to help you meet your business, financial and legal objectives.  Spend identified as routine is generally preferable to address at the front end of your wave plan, especially in situations that involve reluctant buy-in from stakeholders.

             

            Further strategic decisions may be made from data results as well, such as, convergence opportunities, remuneration changes, and even “make vs. buy” opportunities.  Additionally, by segregating projects into smaller buckets you can best support the inclusion of boutique or specialty firms and your RFx content will be much more focused.  For example, we often segregate IP from other legal services given the accessibility of specialized firms and given the frequency of alternative fee structures in this area.  We have also sourced labor, real-estate, and other practice areas independently; however, other client situations support multi-practice area sourcing through one project.  This is generally the case when clients identify convergence, or reduction of firms, as a primary opportunity to drive savings. 

             

            Lastly, content inclusion in your RFx documents will be driven by the practice areas you choose to target but there are a few primary items to consider for inclusion.  Be sure to address budgeting requirements and other cost controls such as early care assessments (when addressing litigation).  Remember, this is your opportunity to not only address price factors such as hourly rates, but also project costs, remuneration models and ancillary fees such as travel, copies, and telecom.  Utilize SLAs to ensure the correct levels of resources are provided for the correctly corresponding level of work.  SLAs also help new firms provide the most accurate quotes based on expected future service requirements.  Providing less specific the information to firms will mitigate their ability to provide the most competitive rates.

             

            I hope this helps you start the process.  Please let me know if you have any questions.

             

            Regards,

            Nick Cherrone