Recently back from the CLOC Institute, I have been simmering on how corporate legal departments are (and are not) leveraging RFPs. Most seem to tackle an RFP when it is time to create or refresh a panel. The process is looked upon with a fair amount of dread. Having had painful experiences with their panel reviews, it is reasonable that teams avoid RFPs when it comes to their day-to-day legal work. However, experience shows that matter-level RFPs matter. RFPs on individual matters drive significant savings on both rates and total fees. They also offer a current assessment of market pricing and lead to best-fit counsel. Need convincing? Read on for rebuttals to the common barriers to using matter-level RFPs.
Why Matter-Level RFPs Matter
I have settled on a panel of firms. Why would I run a matter-level RFP?
Because on any given day, one firm wants your work more than another. Legal departments that run matter-level RFPs with their pre-approved panel firms secure optimized pricing and the best-fit team for each matter. They understand how each firm will approach the deal or litigation and let a firm’s prior experience and specific expertise help guide firm selection. If a law firm has idle capacity, it is likely to offer deeper discounts than its panel rates.
My plate is full. I don’t have time to run matter-level RFPs.
Here is where BanyanRFP can help. With BanyanRFP’s custom, phase-by-phase templates, much of the pre-work is complete. Some thought must go into each matter’s unique scope of work, but this does not have to take more than an hour or two of prep (BanyanRFP is always happy to draft). Regardless, using a standard phase-by-phase template will aid in comparisons on the back end. When it comes to writing the RFP, the more prescriptive the instructions, the easier it will be to compare the proposals. A little time upfront can yield huge dividends, especially when it comes to costly litigation.
I like my go-to firm. Why bring complexity into a situation where it isn’t needed?
To be sure, not every matter is RFP-worthy. However, inserting competition when significant matters arise will help ensure you are getting the best possible service from your firms. When your incumbent understands that it is not guaranteed your work, it will step-up and provide the service you deserve. If it does not, that is important information about your incumbent.
It may be that you get a referral to Firm X based on its experience with a certain type of work. Including this firm in a quick process along with your pre-qualified firms included helps sense-check the possibility of going outside your panel. You may learn that Firm X has the world’s foremost authority on staff and are only 5% more expensive than your go-to firm. They would likely offer you that additional discount to win the work.
I know what this should cost. I don’t need an RFP.
With all due respect, you do not. Nothing can match the market for up-to-the minute information. Based on experience, each time a client runs a matter-level RFP they see a +25% spread on rates. Current rates and staffing insights (vs. a three-year old panel review) are instructive. Law firms’ experience and staff are moving targets, as are rates and value-added services. As D. Casey Flaherty says, you don’t know what is possible unless you ask.
About the Author: Kathy Heafey is President of BanyanRFP, a cloud-based RFP platform that helps companies control spend on legal services. She has over 20 years of management experience working with large brands such as Pillsbury, Green Giant and Progresso Soup. A proven leader in Cost Management and Continuous Improvement, she enabled over $20MM in annual cost-savings for General Mills and is now saving in-house legal teams millions of dollars as they find best-fit counsel for their legal work. For more information, visit www.BanyanRFP.com