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Three reasons why legal departments are better positioned to negotiate arrangements with suppliers

Highlighting a point made in a General Counsel Roundtable report, I commend their view that general counsel have several advantages over law firms when their departments choose suppliers and negotiate contracts directly with them.

Law departments enjoy stronger market power because they can aggregate volume, whereas law firms typically send work to suppliers haphazardly as needed. Better rates for bulk copying, for instance, are more likely from a huge company.

Law departments are more motivated to save dollars, as compared to law firms that typically pass along expenses to their clients. Lean terms from contract staff agencies are more likely from a corporation than from a law firm.

Law departments know what direction they want their vendors to pursue to provide the most benefits, , whereas law firms simply hire someone to complete a task. A law departments can and should push for enhancements to software or improvements in service delivery.

The take-away from this is that law departments, much more than the law firms they hire, can save money and improve service and quality if they negotiate terms directly with suppliers.