General counsel are facing a 'turf war' with procurement departments that could see many clients forced to sever long-standing relationships with law firms, according to research exclusively revealed to the Gazette this week.

A survey of 30 senior managers at top UK, US and European companies by consultancy Fulcrium showed that boards are increasingly forcing legal departments to hand over the selection of external advisers to non-lawyer procurement specialists.


The survey, which included ten top UK companies, revealed that some 80% of respondents were planning to review their legal providers within the next year. Of these, 70% expected procurement departments to lead the process rather than lawyers.


Four-fifths of the heads surveyed said the procurement departments were essential to 'embed much-needed procurement discipline' in the organisation.


Almost half of the companies surveyed claimed such departments enhanced the company's relationships with law firms. However, some 15% thought they harmed relationships with external lawyers.


Fulcrium chief executive Raju Patel said: 'When it comes to purchasing legal services, procurement departments have not been allowed in the game in the past, but now the increased focus on costs means boards are telling in-house lawyers to let them in. That is causing a turf war with the lawyers.'


He added: 'Procurement departments are very successful at hammering down costs. They offer more discipline and scrutiny on selecting firms - for example, if they run a tender they are less inclined to select the incumbent provider. Boards believe the relationship with external advisers has got in the way for their in-house lawyers - if they have had a relationship with a firm for, say, six years, that gets in the way of commercial terms.'