Purchase orders and law firm budgets

In some law departments, where outside counsel is to be hired the lawyer responsible must start the engagement with a purchase order. Some law departments open general purchase orders for the services of a law firm during a year. The department then can accumulate different small matters or general advice under the same purchase order.

Often the purchase order must be approved by a senior lawyer and must include at the least an estimate of how much will be spent under the PO requisition. To that degree, then, the inside lawyer presumably must give thought to the matter’s budget.

It might be that the lawyer creates the budget on her own or it may be that the lawyer asks the outside counsel to submit a proposed budget (See my post of Oct.19, 2007 on budgets and their inherent tensions.). Either way, a PO system and a budgeting system ought to complement each other.