Legal Solutions | USA
In my last column, I focused on common reasons and objectives that drive legal departments to consider an RFP (request for proposal) process in order to identify outside counsel for a particular matter or portfolio of matters. I also detailed the many short-comings of a legal department's RFP process, particularly the lack of guidance and direction provided by a legal department in the actual RFP questionnaire, which results in frustrated law firms providing non-responsive and generic information. Or, rather than having honest conversations and offering feedback to a legacy law firm, a legal department may host an RFP to manifest its displeasure with the law firm.
After taking this critical look at the RFP process, the question remains: Is it possible to improve the RFP process and create generally better results for corporate legal departments and their firms, and support stronger relationships? Are there ways to promote the good use of RFPs and minimize their abuse? Here are some of ideas for legal departments to achieve better outcomes using an RFP.
Partner with procurement to learn RFP best practices. I often recommend that the department do something that many lawyers are loathe to do: contact the corporate procurement office and schedule a time for a sit-down. While many departments are worried that procurement will somehow take over their outsourcing functions, it is rare for a procurement group in the company to do so, especially if it's clear that the department is soliciting their ideas and best practices to consider which could be successfully applied to legal sourcing processes. The best way to avoid a takeover is sometimes a friendly merger. While hiring outside law firms is not the same as purchasing widgets, there are universal skills and applicable/helpful technologies along with tried and true processes that lawyers should learn in order to be more effective. Procurement folks can be a great resource in connection with a legal department RFP.
Staff the RFP appropriately and pre-determine resource investment. A legal department should pre-establish the appropriate time and investment for an RFP process, as well as the metrics to measure returns that RFPs can achieve, before engaging in an RFP process. If the department surveys 100 firms, spending 6 months and 3 people's full-time efforts to save $100,000 in fees, that's a poor use of the legal department's time and money. You can do the math from the firm's side, too, especially in looking at the chances of the firm being selected, and in what kinds of processes the firm will likely find the greatest successes (and vice versa). Turn to professionals who know how to do RFPs (see earlier suggestion) and who create consistent proposals or requests do the work. Keep in mind that not everyone can do it well, and it shouldn't be work that is spread about the team. Designate a leader/team to handle RFPs for your team. Make it a leadership priority to set up metrics to guide the process and then measure whether the process is returning sufficient results to justify the investment in continuing to participate in RFP processes.
Bifurcate the RFP process: short semi-finals vs. detailed finals. A legal department should consider creating a two-step process that asks several law firms to provide a very short response to a detailed scenario before a handful of finalists are selected to participate in the longer, more detailed response process. This alleviates a firm's frustration of over-investing before a short list of finalists is chosen. The "short-response portion" can restrict answers by limited pages or word count. Presumably only a few firms with the relevant "stuff" would go on to round two, raising the likelihood that more significant time invested by those firms would return rewards. Why would a firm with 1-in-a-100 chance of getting work for a totally new client invest tens of thousands of dollars in time and effort for that small likelihood of return? This is a major hurdle for a participating law firm, especially if the other competing firms include a list of known quantities to the client or bigger name brands. But this same firm, who wouldn't want to invest the time in a lengthy, prolonged RFP might be more open to investing only a few hours on a simple online questionnaire.
Consider what information should be provided by the law firms in the initial round. Firms might be asked to only articulate their sense of the work to be done (none of the pages and pages of lawyer profiles and previous experience and so on), as well as information on the exact team from the law firm that will do the work. Legal departments should leave pricing, previous experience, and other more "onerous" tasks to the second round winners based on the results/strategy the responding firm is promising to deliver.
Clearly articulate objectives to the law firms for the RFP. A legal department RFP might include details, and even a roadmap of the criteria and process, by which they will evaluate and select a winning submission. Specific details on what will drive the department's decision/what it values in this matter might include:
While all of these and more are likely relevant, the legal department should choose those on which they place the highest priority so that the outside firm can craft a proposal that actually drives the department's strongest outcome. If there are too many values or no values articulated, the outside firm can't prioritize its response and the legal department won't know on which values it should be making decisions. The department will likely receive responses that can't be easily compared since each proposal will be aiming at different targets. This shouldn't be a secretive process, but one that assures the success of worthy candidates.
How can you use the RFP process, just as you would use the outside counsel retention guidelines (as discussed in a previous article), to create greater mutuality of interest and more productive partnerships between firms and clients? Perhaps you can send a draft of the RFP out to some selected firms for comment (rather than response) to improve the quality of request and the likelihood that firms will be able to provide better responses. Or you shop from successful RFPs written by other legal departments who might be willing to share.
Bottom line, the RFP process should be one that is designed for success, rather than one that is riddled with wasted time and efforts on both sides. The suggestions above lead to this outcome. I recommend that departments and firms think about how to be partners, rather than adversaries, in the RFP process.
Susan Hackett is the CEO of Legal Executive Leadership, LLC, a law practice management consulting firm she founded in 2011 after serving as the Senior Vice President and General Counsel of the Association of Corporate Counsel (ACC) for more than two decades. As an insider working with thousands of top corporate practice leaders, Susan has an amazing breadth of experience with the inner workings of in-house practice and the implementation of value-based legal models, as well as an international reputation for innovation, excellence, and success. Comments welcome to email@example.com.