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.