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Maximizing Your Effectiveness in the RFP ProcessA good friend from law school who is now in-house just called to say that she may have an opportunity to send you some work. You're excited. This is exactly what you've been working toward.
2012-12-20 12:00:00 AM
A good friend from law school who is now in-house just called to say that she may have an opportunity to send you some work. You're excited. This is exactly what you've been working toward. You're up for partner in a few years, so the timing could not be better. All those articles that you've written, the networking events and the endless marketing seminars are finally going to pay off. So you wait for her email, but when the email arrives, it's not from your classmate, but from the procurement department of her company. When you open the attachment, you see the following words in large caps: "REQUEST FOR PROPOSAL."
Wait a second. What happened to all that work that you were going to get? What are you supposed to do with this thing? It's 100 pages of questions and statistics, and asks you questions like, "Who will be the relationship partner?" and "Describe your firm's disaster recovery procedures." You have no idea what any of this even means. Then you notice the due date ... three weeks. Panic sets in.
Relax. While responding to requests for proposal (RFPs) can certainly be a daunting and time-consuming affair, it is increasingly becoming the way big companies hire outside counsel. And we believe that is a good thing, even for law firms.
RFPs are nothing new, but they have increasingly become a "best practice" for companies seeking to purchase outside legal services. Sure, there is still a possibility that your classmate from law school is going to send you a bunch of cases or a big deal, but chances are just as good that he'll send you an RFP. The trend toward a more formal procurement style is a function of the economic times, but also a result of corporate realization that the purchase of legal services should be no different than the procurement of other business supplies.
The benefits for companies are obvious: lower prices, more flexible staffing options and the ability to predict future legal costs. But what about law firms? We think that the RFP process is a positive for law firms as well, despite the effort and time it takes to respond to such a request.
First, the RFP process levels the playing field. Yes, it may help to have a relationship with in-house counsel, but the process is designed to inject some objectivity into an otherwise subjective process. Your firm's proposal is going to be compared side-by-side to your competitors' submissions. RFPs give you a shot to sell yourself and your firm and perhaps to overcome the impact of pre-existing stereotypes or stale reputations.
Second, the process allows for new and different approaches to the economics of legal services, which haven't had much of a makeover since the billable hour was first introduced. Fixed fees, per matter limits and success bonuses are just a few of the ways that your firm can rethink the way it charges for its time. If you're efficient and good at what you do, this is a step in the right direction.
Third, RFPs require foresight and planning, two tasks that may receive short shrift in the hustle and bustle of the everyday practice of law. By forcing firms to outline staffing plans and think about a portfolio of litigation, RFPs require the sort of long-range planning and big-picture thinking that sometimes lose out to the strategy of the moment or the crisis du jour.
Whether you agree with us that the rise of the RFP is a positive development or not, RFPs are here to stay. So, no matter if you're in-house or outside counsel, successfully navigating the process should be of interest to you. Here are a few tips that we would like to pass along:
Tips for outside counsel
Think critically. Ask yourself why the RFP was issued. Cost? Dissatisfaction with existing relationships? Need for specialized services? If you're going to "win" the RFP, you need to determine what the winning ticket looks like first.
Evaluate, then go "all in." RFPs are time-consuming. Preparing an effective response takes time, and effort. If you don't have the time, don't respond it may end up hurting you in the end. If you do, ask yourself whether investing your energy is going to be an efficient use of your resources. Are you likely to be price-competitive? Do you have a relationship that can help you close the deal? Once you decide to commit, go all the way those reviewing your submission can tell if you only gave 50 percent.
Run conflicts. It sounds simple, but always run conflicts first on the issuer and likely adverse parties. It would be a shame to invest the necessary time and effort only to be conflicted-out later not to mention the impact such a belated conflict would have on your relationship with in-house counsel.
Participate. By now, most large firms have parts of their marketing department dedicated to responding to RFPs. With due respect to those professionals, companies want to hear from you, not your marketing department. And, believe us, your marketing folks crave your active participation too. Get involved in preparing the response, and offer more than just boilerplate generalities and website clichés provide the issuer with your honest views and strategy; that's what they want to hear.
Be honest and open about pricing. Offer creative pricing solutions. Consider alternative fee arrangements. But design a system that you can live with and profit from. Your client will want to find an arrangement that works for both sides. An open and honest dialogue on pricing is at the heart of any successful RFP.
Strive for a holistic relationship. Yes, the RFP will be directed toward specific work, but think about what else you can offer the client. On-site CLEs? Periodic employee training? These things may seem obvious to outside counsel, but in-house attorneys appreciate them being offered.
Make it personal. One downside to the RFP process is that it can be a little impersonal. Try to swim against that current. Don't give up on the personal aspects of selling yourself or your firm. Offer to follow up your submission with an in-person presentation. Ask questions. Clarify ambiguities. Make sure you truly understand the problem you are being asked to solve. In-house counsel are still interested in finding the right "fit" with their outside counsel both in terms of trust and personalities. It is tough to demonstrate that "fit" if they never meet or speak with you.
Evaluate when it's over. Don't forget to follow up, even if you did not succeed. Review your process internally. Determine what worked and what did not. How much time did you invest? Would you invest the same amount of time again? If you got on "the list," did you get work? What did being on "the list" actually mean? Keep in touch with the issuing company, and maintain your professionalism even if you didn't win. Ask for feedback, win or lose.
Tips for in-house counsel
Think critically. Before issuing an RFP, decide whether the RFP is the right tool for the job. Is there a more efficient way to select counsel for the matter? Do you have a critical mass of assignments to warrant the investment of resources? Is it really an open competition, or do you already know what firm is going to win the work? Look before you leap.
Provide as many answers as questions. The more data that you provide, the better the responses will be. If you're requesting detailed fee proposals, provide historic data so that the firms have something to go by. If you're looking for case strategies, provide common fact patterns. Be open to questions, and list common parties for conflicts. Encourage conversation and dialogue.
Ask good questions. Streamline your questionnaire and ask only those questions that you really need and care about. The fewer questions, the better the answers will be. If you want lawyers to participate, remember that the good ones are busy. And if you abhor marketing boilerplate, don't ask questions that call for it.
Complete the process. Half of all RFPs never make it to completion. If outside counsel are going to invest their time in the RFP process, they at least deserve a conclusion. And, once you're done, ask for feedback from the winners and the losers.
YL EDITORIAL BOARD
Peter C. Buckley, Chairman
The Editorial Board of Young Lawyer is composed of members of the legal profession. They serve voluntarily and are independent of Young Lawyer. Through their ongoing exchange of views, members of the board attempt to develop consensus on issues of importance to the bench, bar and public. Members of the legal community are invited to contribute signed op-ed pieces.