Introduction
According to a Procurement Leader survey, 67% of law firms have a procurement function. By focusing on supplier risk management, supplier relationship management, and supplier diversity, procurement can bring significant business value and achieve strategic goals.
Supplier risk management
Despite regulatory pressure and client expectations, a significant number of law firms lack a formal, third-party risk management policy. The procurement function can play a crucial role in assessing supplier risk by:
- conducting preliminary risk scoring,
- facilitating processes,
- monitoring compliance, and
- maintaining visibility into the firm's overall risk profile.
The procurement function is a natural nexus for ensuring that proper supplier risk management processes and policies are followed. Clients increasingly expect law firms to demonstrate maturity in risk management strategies and processes.
Supplier relationship management
Law firms often handle supplier relationships reactively. They lack regular reviews and neglect SLAs and KPIs.
To address this, formal processes should be established for monitoring KPIs and holding suppliers accountable, meeting service level expectations.
Procurement can contribute by conducting quarterly reviews involving key stakeholders and aligning with a third-party risk management program. These reviews evaluate KPIs, SLA performance, end-user feedback, and other relevant issues for comprehensive improvement.
Supplier diversity
Law firms prioritize diversity in recruitment, hiring, and promotions, and engage in sustainability and pro-bono initiatives. However, they lag behind corporations in implementing strong supplier diversity programs.
Clients now expect firms to support local communities by working with diverse suppliers. Requests for proposals commonly include inquiries about supplier diversity policies and statistics. To meet these expectations, firms should establish a supplier diversity program, including a policy, diverse supplier identification, and reporting.
Conclusion
A law firm's suppliers greatly impact daily operations and client service quality. Risk events and service failures can harm the firm's competitiveness. In 2019, pressure increased to maintain quality, continuity, and minimize risk.
The procurement function can address these challenges by prioritizing supplier risk management, relationship management, and diversity. These should be key goals for the upcoming year.
For the full report, download the PDF.
- Procurement
- Vendor governance
- Cost & spend management
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