This is the final post of a three-part series focused on preferred outside counsel programs/processes.
The first two posts provided suggestions for law departments planning or with existing firm rationalization processes and preferred outside counsel programs. In this post, we turn to the law firms that are invited to complete a request for proposal (RFP) to participate in a preferred outside counsel program. The insights in this post are based on feedback from our work with corporate law departments and concerns raised by our law firm clients.
HBR’s 2019 Law Department survey indicated that law departments are increasingly seeking to better manage their outside counsel. As part of this enhanced management and to strengthen their relationships with a smaller number of preferred law firms, law departments often seek to put in place preferred outside counsel programs. These efforts almost always include an invitation for firms to participate in an RFP to be part of the corporation’s preferred outside counsel program. Below, we address common misconceptions, as well as tips for excelling in an RFP process.
Common Misconceptions About the Preferred Outside Counsel Program RFP Process
Following are some of the most common misconceptions law firms have shared with us related to the RFP process.
- “This is just a pricing exercise to try and pit firms against each other.”
- While cost management can be a driver of the process, financial proposals typically only account for approximately 25 percent of the basis for firm selection. Expertise is also usually one of the highest, if not the highest, evaluation criteria. Diversity has continuously increased in weight with some organizations, for which it can represent up to 25 percent of firms’ scores.
- Often, some of the most expensive firms will make the preferred program list because the organization relies heavily on their expertise. Law firm services are in some ways value-based services. The more an organization feels that a firm understands its business and can provide unique and necessary expertise, the higher likelihood the firm will make their preferred list and be adequately paid.
- “This is a very burdensome process for our firm.”
- OK, maybe this isn’t a misconception, since it can actually be true. The process to provide a thorough, company-specific response takes time. However, three weeks should be adequate, especially if firms have previously participated in similar processes and can leverage some of the prior firm-wide responses. The real misconception is that the burden of this process is solely on the participating law firms. In reality, corporate law departments take months to analyze spending, prepare for and administer the RFP process, and review and score dozens of firm responses. This isn’t a one-sided effort or exercise. Ideally, it is a joint exercise to align on the corporation’s future legal needs, ultimately resulting in a stronger, mutually beneficial relationship between a corporation and its preferred law firms.
- “As a firm new to the company, I don’t have a shot at making the preferred outside counsel program.”
- Even a “new” firm always has a chance at making the program. Your firm was included for a reason, not just to increase competition. The requesting company values your response. Typically, almost all new firms that are invited to participate get an invitation to interview, assuming they are able to demonstrate their expertise through the RFP process.
- “In order to be a preferred firm, we need to have multiple service offerings and areas of expertise.”
- Most preferred outside counsel programs are designed to expand the volume of work with firms across areas of work. However, companies commonly also include high volume, single-practice law firms in their preferred outside counsel program.
- “If I don’t make the program, the organization will cut all business with our law firm.”
- Companies will still have a need for unique expertise and/or jurisdictional coverage. Although the volume of work may not be as significant, it is common for companies to rely on non-preferred, regional, and/or boutique firms on an exception basis.
Tips for Excelling in the Process
Now that we have explored some of the misconceptions, here are some ways firms can excel in the process.
- If your firm is new to the company, do not over-extend; rather, focus on the firm’s core practice areas. A common misstep is attempting to provide services in too many areas. If the firm does not have directly relevant expertise, decline to respond to that area. While clients are seeking good cross-coverage, one less-than-stellar area can have a big impact on how the firm is perceived and scored.
- Pay attention to who you bring to interviews and meetings. Bring a representative group to show the corporation who would be handling its work, representative of the firm’s expertise, diversity, values and any other attributes that differentiate your firm and how it would represent the company.
- Be creative in your suggestions regarding the added value you will provide, whether financial or other value propositions.
- Tailor your response to your audience – do not use boilerplate materials. Of course you can use responses from similar RFP processes, but be sure to customize the response to align with the current company’s goals and objectives. Minimize the use of addendums and respond to only the questions asked. Word limits are in place for a reason, and your ability to reply in a succinct manner is critical. Providing irrelevant information will burden the reviewers and could adversely affect their evaluation of your response.
- Recognize that the company’s needs may change – do some diligence on the company and its industry prior to preparing the response and make sure the firm’s response is aligned and up to date with the company’s latest focus and needs.
- Ask relevant, clarifying questions about RFP requests so that you can provide the information that is desired, but don’t go overboard in your questions.
- Adhere to RFP instructions (e.g., don’t send a PDF when Excel was requested). This may seem obvious, but nothing grates on busy corporate law department teams (who are likely managing their everyday work as well as supporting the RFP process) like having to perform manual work when there is a defined process to minimize it.
If you follow these tips, you will make the best possible impression on those involved in the program selection process by making it clear that the firm has carefully considered the company’s needs and has the attributes to make it a worthy member of the program.
HBR often conducts “voice of the client” presentations to share insights learned from our support of corporations’ outside counsel management processes, as well as from our annual Law Department Survey. If you are interested in a presentation to your firm or a group of key firm leadership or if you would like more information about other corporate law departments trends, please email me or contact another member of HBR’s Advisory business team.