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Repeatable Legal Work: Two Steps to Savings

If you have repeatable legal work, it often benefits you to run an RFP for a multi-year engagement. Do you process a large volume of visa applications? Do you manage a patent portfolio? Do you file a lot of trademark applications? Read on.

There are a number of ways to instruct firms to complete their financial proposals for repeatable work, but our clients most often deploy a two-step approach. It allows the company issuing the RFP to get:

  • a firm understanding of how each discernible task is priced
  • a clear estimate of overall spend for a typical year and
  • an estimate of how those rates will change over time

First, Build A Budget for Year One

First, the firms are instructed to build a budget for a year’s worth of work. The firms are provided a series of repeatable tasks that would be expected to occur in a typical year. For instance, if asked to process visas the firms would be provided a list of visa application types that would be processed and perhaps a few other tasks (e.g. general consulting advice). For each task, they are then instructed to assume a specific number of times that task will need to be processed during the year (e.g. 15 of type X visa applications will be filed) or a specific number of hours of work that is expected (e.g. 50 hours of general consulting advice). These assumptions are typically based on past experience.

The company does not promise the assumptions about any task will come to pass, but does advise the firms the assumptions are grounded in past experience. This helps inform the firms with significant detail about what to expect.  This is an improvement over simply asking firms to provide a per task estimate without any context of the expected work volume per task.

Next, Comment on the Out-Years

Assuming the engagement is for a period of years, the firms are asked to confirm the pricing they provide will remain static for the term of the engagement.  Otherwise, the firms need to specify how pricing would change.

Why An Effective Approach?

The result provides the company issuing the RFP with the ability to compare proposals on price and work time across each task type while also giving an overall estimate of annual cost for the totality of the work. In turn, this allows the company to readily instruct firms as to areas of their proposal that are weak relative to their competition.

Admittedly, constructing this type of RFP may entail a bit more elbow grease upfront. But when a significant volume of work is at stake, this added effort is typically worthwhile in terms of the quality of the proposals received.

About the author – Dave Sampsell is a 20-year lawyer with extensive experience managing large, complex legal engagements around the world and overall corporate legal budgets. He presently serves as General Counsel of a NASDAQ-listed company and is a Founder and Principal of BanyanRFP.  BanyanRFP enables better outside counsel selection decisions and save companies time and money through an easy-to-use, private and secure, online platform for the creation and processing of legal services RFPs. For more information, visit www.BanyanRFP.com

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