|Jeff Carr in his Race Car|
His retirement, combined with other recent challenges got me thinking. A recent trend has been the involvement of the procurement department in helping legal departments control costs. The use of procurement is obvious, since their role is controlling costs and saving money for clients. Silvia Hodges has done a lot of work on this subject, and the role of procurement continues to evolve in this aspect.
If you look at what Jeff has done to drive his success, procurement is not the driving factor. Instead, if you dig into his "budget with consequences" thinking, what you will find is not procurement, but instead project management.
Jeff began developing his approach based on a few core ideas. One of them was the lack of feedback built into the purchase of legal services. For years he had noticed that when law firms performed poorly, instead of giving them constructive feedback, clients would just stop sending those firms work. This meant opportunity for new firms to come in, but eventually the new firms would make some mistakes (since everyone does eventually) and then they would be marginalized too. The result was not good for Jeff as a client. There was never much improvement, only a stream of new faces.
So Jeff's approach was designed to change this aspect. If you have ever heard one of his presentation (and I have been privileged to actually present with him), he will note that if you do one thing as in-house counsel to change things, it is to implement after action reviews of matters. This one thing will drive a lot of positive changes.
After action reviews are all about project management. These efforts drive better planning and budgeting for the next engagement, creating a project management life-cycle.
So in thinking about Jeff's approach and contrasting it to the rising trend of procurement in the legal space, a thought occurred to me. If I were a client looking to better control my legal spend, I would not be knocking on Procurement's door. Instead I would be calling up the Project Management Office and getting them involved pronto. Effective project management will drive sustained cost savings, as clearly demonstrated by Jeff. Procurement will work to understand the cost per unit of service, and then drive down that per unit cost as best it can. And we all know what "per unit cost" is in the legal space: Billable Hours.
I rest my case. And I wish Jeff the best in his future endeavors.
P.S.: I shared a preview copy of this post with Jeff to make sure I wasn't full of it. He responded with this wonderful comment:
Like most things law-related, we tend to complexify things. Perhaps it’s because we make money from complexity – either because it take more time to navigate the complexity and ambiguity, or because we’re needed to play the role a Sherpa through the mist (or more likely both). As I’ve gotten older, I’ve tended to become more of a Zen GC – there is beauty in de-complexification (what the non-law world might call simplification). Project Management is one of those things – it’s really a quite simple three step process – Who, does What, When. This is then the first step of the grander P3 process of Plan, Perform, Perfect. The after action part you focus on occurs in the Perfect stage. The interesting thing to me is that the Perform step is relatively unimportant – just follow the plan with zero defects or deviations. It’s the Plan and Perfect stages that actually matter.
But then again, as Confucius might have said: The solution to the problem is simple. But those with the Power to solve the problem find it quite difficult.