Do you truly know whether your contract has the best terms and pricing compared to the market? How prepared is your firm for your next contract negotiation?
The number 1 priority of legal procurement is to better analyze and reduce legal spend according to the 2018 Buying Legal Council Survey. What this means for law firms is increasing price competition and a resultant downward pressure on price. Internally, this means every department within a law firm is under intense scrutiny to demonstrate value in terms of any business metric that measures how well the firm delivers client service at the most cost-effective price.
For legal information professionals, core to demonstrating departmental value is optimizing provider services and contracts. One of the biggest mistakes we see are contract renewals without application of the right leverage and industry knowledge. The value of firms’ online research platforms does not automatically increase 3-5% annually just “because”. To pay increases annually, it would be expected that the firm is receiving more value, content or features than the year before. Complacency or lack of diligence in managing information resources can have long-lasting unfavorable implications on both processes and costs, thereby hampering overall efficiency.
Simply consider the recent and rapid changes in the market for online research providers. It is unlikely that firms’ contract pricing and content are aligned with current products, strategy, and shifts in the market. Resources purchased in the past may no longer provide the necessary tools to remain competitive and cutting edge today. Legal information needs are continually in flux and should be reviewed periodically.
An optimized budget delivers the financial resources necessary to take advantage of new and exciting offerings currently emerging in the market, such as new AI and analytics tools. Having access to these products could be significant in creating new efficiencies and enhancing productivity at your firm. Asserting yourself in confidence, understanding your choices and making them clear at the negotiation table will ensure you reach the best outcome for your firm.
However, pricing knowledge alone is not enough to optimize pricing. Strategy and negotiation tactics are critical for success. Law firm administrators must understand their leverage and be able to utilize it a meaningful and timely manner. Gaining a clearer picture of your purchasing power is essential to achieving an optimized outcome.
Feit Consulting has developed detailed strategies and the industry’s most comprehensive benchmarking, that helps information professionals achieve the leverage required for successful vendor negotiations. You can see a preview of our comprehensive Optimizing Legal Information Pricing white paper here. Want to discuss your firm’s specific needs or have your contracts benchmarked? Contact us at email@example.com.