Legal procurement has earned its seat at the table in the process of buying legal services – and they aren’t giving it up. The 2018 Buying Legal Council Survey noted that 76% of respondents were using RFPs as part of their legal spend management strategy. Law firms need to have a formal process in place to ensure they are prepared for a greater volume and an increase in the sophistication of RFPs coming from corporate counsel. Here are 7 basic steps that should be part of your process.
1. In-Take & Review
A formal mandatory in-take and review process needs to be in place so that all RFP opportunities are directed to a central point of contact with-in 24 hrs. of receipt. Information should be collected and logged on every opportunity at the outset, and presented to firm/practice leaders to determine if the RFP is worth dedicating firm resources to respond to. Not every RFP makes business sense to respond to and it will make it easier to convince your lawyers on the benefits of passing if you have data to support your thinking. For example, if the data shows that the firm has been unsuccessful in 100% of the RFPs in the Oil & Gas industry where they weren’t already doing work for the company, then maybe that means they it doesn’t make sense to keep chasing that work. BD needs the data to say no to lawyers who want to throw anything against the wall to see what sticks.
2. Internal Communications to Relevant Stakeholders
A process should be in place so that all key firm stakeholders are made aware of the opportunity at the outset. A report should be run that identifies who has billed to the client, for what type of matters, and under what type of pricing structure. You should also identify if the firm currently represents any key competitors that may impact the conflict shadow. A copy of the RFP should also be shared with the relevant practice or industry group chairs, the GCs office and any relevant pricing or auxiliary staff members who may be asked to contribute to the response. It’s very important the outside counsel guidelines are reviewed to ensure the firm is willing to abide by the terms or to be marked up for negotiation with the issuer. Firms should have a strategy on which items they won’t agree to and reasons why.
3. Strategy and Project Management Planning Meeting
A call should be scheduled as soon as possible that would include all the key stakeholders who will be involved in the response. This should be led by the key relationship manager and the business development team member who acting as project manager on the response. It’s essential that everyone gets on the same page at the outset as to what the firm’s strategy will be and how they plan to execute the response. The firm’s competitive advantages that they plan to highlight should be identified at the onset, so that the language drafted supports the overall theme of the response.
4. Execution of Draft Response
It is the responsibility of the lead business development team member who is driving the execution of the response to create and manage the response schedule. They should be using a project management tool that helps hold people accountable to internal deadlines. Pricing tasks should be prioritized – as too often firms address the pricing component too close to the deadline and don’t allow enough time for number crunching. The key relationship managers for the client need to discuss early in the process how they plan to address any requests for discounts, AFAs or pricing bids and ideally that data should be reviewed for approval by a pricing director or finance team member.
5. Sharpening Your Story
Often RFP responses contain input from dozens or more contributors. An important step of the process is to convert that data to a consistent message that tells a story of why your firm should be selected. That theme should be supported throughout the response with supporting examples and customized answers that proactively promotes the value your firm brings to buyers. This time needs to be built into the process otherwise you will end up racing to beat the deadline with a response that has no cohesive message but rather is just a data dump. Your value and key competitive advantages that you can bring to the client/matter need to jump off the page.
One of the benefits of the evolution of legal operations and procurement professionals is that companies have become more transparent in providing feedback as to why a law firm may or may not have been selected. This is an important improvement in the RFP process and one that law firms need to take better advantage of. Laws firm need to have a formal process in place to ensure that they collect as much information as they can about the reasons behind the decision-making process so that they can learn from this to enhance future responses. Firms should have a consistent set of questions to ask that allows them to collect data that can be compared and analyzed. The 2018 Law Firm Growth Enablement Survey reports that “85% of law firms are not tracking ROI on pitches or RFP responses.” It boggles the mind how so many firms could be dropping the ball on this part. Far too often the BD team is stretched to thin and need to move on to the next task so law firms fail to learn from the results of the RFP. Big Mistake.
7. Performance Tracking and Reporting
Law firms should have a tracking system in place that collects as much information on the opportunity as possible. This should include information on how the opportunity was originated, who the competition was, the industry, the type of work, and as much detail as possible on the lawyers involved and the strategy and competitive advantages pitched. The data should be analyzed by the business development team so that they can report results and trends to the firm’s partners. This is also an opportunity for the BD department to show their value by tying their efforts directly to new revenue which can be done easily by tracking client numbers and matters derived from RFPs.
RFPs are not a passing fad, and they will continue to be used more frequently to compare legal services and to negotiate pricing and service terms. Law firms need to adapt to this change in the industry by implementing a formal response process to ensure they are maximizing the opportunities that these RFPs present.
Matthew Prinn is a Principal with RFP Advisory Group, a consulting firm that specializes in RFPs in the legal industry. He can be reached at mattprinn@RFPag.com.