At Some Companies, Purchasing Agents Help Choose Outside Law Firms
Some corporations are so intent on cost-cutting that their purchasing or procurement departments are involved in decisions to hire outside counsel.
Ron Friedmann, president of Prism Legal Consultants Inc., told GC Mid-Atlantic that more purchasing departments are getting involved because corporate managers believe lawyers aren’t watching the bottom line.
“When purchasing departments see how lawyers operate, they see low-hanging fruit,” he said. He doesn’t believe such involvement is a bad thing, if cost-cutting is balanced with the general counsel’s preferences for outside lawyers.
“It’s clear that corporations are increasingly looking at ways to save money, and law departments are cost centers and need to be managed as cost centers,” he told the publication. “A forward-thinking general counsel should look to the purchasing department for help.”
Not everyone is happy with the emphasis on cost-cutting. “There’s a movement right now, across the board, to pay the lowest price you possibly can,” said Ed Hansen, a partner with Morgan, Lewis & Bockius. “On the surface, it seems like a good idea, but companies aren’t able to differentiate what’s a commodity and what’s not. You can’t buy outsourcing services like you buy pencils,” he told the publication.