Stacey Coote talks us through his career background, from his entry into Procurement to what he has learnt along the way, as well as his highlights so far.
Please provide us with a summary of your career background.
I am one of the few Procurement people I know who consciously decided to start their career in the industry. I was lucky to find a great company to work with - CSC – who sponsored me to complete my CIPS Graduate Diploma. After CSC, I spent time at PWC, Nabarro (law firm) and then joined Accenture in 2001 to work on legal spend management. After Accenture, I continued to focus on legal spend management and took roles at AstraZeneca, the Home Office and Royal Bank of Scotland before making a move into the Legal Department and becoming the Director of Legal operations EMEA & APAC at AIG. Prior to starting Coote O’Grady I was the UK CEO for a small consultancy where I worked on legal spend with Roche Pharmaceutical and other large global clients.
What prompted the move from Procurement into a Legal function at AIG?
I love Procurement but, to learn more about legal department operations and spend, I had to start working with the legal department full time. Luckily, my move was encouraged and supported by the GC of AIG in Europe. He acted as a great mentor for me especially when we tried to make some major legal technology implementations and changes to the way legal services were being purchased (including implementing robust performance management for firms.)
What influence did this have on your subsequent return to procurement?
It has had a huge influence. Having lived with the legal department’s challenges daily, I am now so much better placed to see things from their point of view. It also made me understand that saving money is not always the top priority as there are other ways which can add value to the department (for example, the use of technology). More importantly, I learnt how poor firms can be at articulating the value they deliver to clients daily.
Unfortunately, procurement is often too focused on savings and less on building performance management and relationships with law firms. Therefore, working with the legal department, made me appreciate the importance of these relationships as they are essential when competing for the best talent.
You moved from large global organisations into a small start-up – what were the big differences / challenges?
There are obviously positives and negatives about working in a start-up but, I very much liked the fact that they have very few office politics as well as a level of energy and productivity that I have never seen in a large organisation. Unlike big companies, start-ups constantly innovate without the fear of change or rejection - that’s what they do day in and day out - and they move things much faster. Start-ups are always working towards excellence and constantly trying to be at the cutting edge.
However, small companies are usually dealing with cash flow issues which is not so pleasant. If large organisations realised the impact slow payment has on their supply chains, I believe they would pay quicker. Also, the lack of IT, HR, legal, etc. support can be tricky sometimes as it all comes down to you.
How does legal procurement differ to other categories of spend?
As opposed to other categories of spend where the pricing goes down consistently year on year, in legal, the cost of provision of service increases. There is also more and more demand and regulation (with regulators keen to prove their worth), as well as more litigation etc. Additionally, it is almost impossible to put a value on legal service provision. For example, let’s say you are being sued for £100m, does it matter if you pay the law firm more than you could have got the advice for if you win the case? It would matter for a procurement person as they will try to get value regardless. However, the value might not come from the amount paid, but from settlement of the case.
To summarise, the expense policies, the use of technology in law firms, the way legal process outsourcing, the way eDiscovery, Lean, Six Sigma and Project Management best practices are being implemented into processes are more important and valuable than the hourly rates of lawyers.
Do you believe the legal category has unique challenges when it comes to delivery?
It is regulated, there are many rules and regulations around the delivery of services and this makes a huge difference. Also, the category is much more ‘people’ driven than any other category I have encountered. While I can draw similarities with Consulting, I don’t think it is at the same level. There is always someone else who can provide consulting services to a very similar standard. However, within the legal category, there is sometimes only one qualified lawyer who can practice in that courtroom.
Why would organisations use an external consultant to buy legal services and not an interim or a permanent hire?
When it comes to managing legal spend, external consultants can provide much more expertise than an in-house team as they don’t look after other categories of spend. Also, procurement has always struggled to get the right level of engagement with legal and that’s because they’ve tried to apply generic procurement processes to legal services.
For example, generalists may not understand that paying a Partner £450/hour might be more cost effective than paying a Junior Associate £200/hour. The Partner - due to their expertise and experience - will finish the work in just one hour whereas the Junior Associate might just spend 3 hours working on the project and this means you spend £600 instead of £450. In my opinion, external consultants just have more credibility from running legal procurement processes. And, even though interims also get a lot of experience from working at different organisations, consultants tend to be working for numerous clients at any one time and this is what gives them a unique insight into legal services procurement.
Have you successfully provided these legal procurement services? Please give us a recent example.
Delivering a transformation programme which completely re-engineered the procurement of legal services and saved over £110M was my most notable success. This was one of the most recent client engagement projects where we used a junior resource with senior level support to provide tactical support to negotiate with law firms.
How does legal procurement’s future look?
I think more focus should be placed on performance management as it helps deliver benefits for the long term. I also believe that legal procurement must move from the model of ‘generalist procurement resources’ to a model where it can truly partner with the legal function using legal procurement experts.
Obviously, this can only be done when an external partner is being used to outsource the service. However, if people don’t buy into this concept they are still going to have to hire interims or true experts (very few of them exist) who will likely cost more than an outsourced model where resource costs can be shared across clients.