Law Firm RFP's are a critical tool for the "best-in-class" legal departments of the Fortune 500. "Best-in-class" RFPs are crafted to strategy to elicit “decision-grade data” driving effective evaluation of law firms.
Law Firm Request for Proposal (RFP)
A Law Firm RFP is a "must-have" critical tool for the "best-in-class" legal departments of the Fortune 500. "Best-in-class" law firm RFPs (as part of a broader process) are strategically crafted to elicit “decision-grade data” driving effective comparative evaluation of outside law firms. High performing corporate legal departments strive to optimize the use of outside counsel, manage outside spend effectively (and for increased value), and improve cost transparency. To accomplish this, in-house counsel need to compare law firm substantive capabilities and costs in an objective, standard, and fair manner.
Law Firm RFPs (i.e., Requests For Proposals) are a powerful (and increasingly popular) tool for optimizing the law firm selection process. Argopoint has designed "best in class" RFP processes and tools for numerous Fortune 500 clients. Our expertise ensures the optimal outcomes desired by clients are achieved, the process runs smoothly and quickly, and busy in-house counsel can stay focused on day-to-day matters during the RFP process (which can be time-consuming if not managed properly).
Our process enables our clients to create an updated portfolio of outside counsel firms best suited to their specific needs and leads to a cost savings of five to twenty percent. In certain cases, we have seen cost savings as high as forty percent. Several factors contribute to the actual level of cost savings achieved - including our client's intentions and specific needs.
Law Firm RFP (Request For Proposal): Objectives
Request For Proposals (supported by a robust process) have long been used selectively and in a targeted manner to increase visibility into specific law firms capabilities and comparative economics. Well-designed law firm RFPs equip client organizations with apples-to-apples quality and cost data. Recently, however, leading legal departments have begun leveraging law firm RFPs on a more wide-spread and programatic basis. These leading departments seek to better understand up-to-date legal marketplace dynamics, drive cost transparency, and better understand how law firms’ capablities relate directly to their own legal situations.
Law Firm RFP (Request For Proposal): Overview
It is important to note that the RFP is just one part of a broader law firm evaluation process (this is often overlooked - and when we hear about RFP "misfires" - it is usually the result of a bad process). An effective process - has many elements - and details will vary by legal department - however most "best-in-class" involve (and incorporate to varying degrees):
- Formal legal spend analysis by legal sub-categories, jurisdiction, and relevant “buckets” of legal spend (a robust spend analysis program is typically the first, and required, step of any process)
- Research on qualified law firm candidates (a mix of incumbents and new firms is generally recommended)
- Conducting RFI's to gather critical screening data (an RFI and RFP enables a phased approach - both broad "searching" and then more narrow, focused evaluation of strongest offerings)
- Creation of an evaluation framework and scoring methodology (including legal metrics)
- Law firm interview to increase clarity and align expectations (our process includes a structured, data-driven approach to law firm interviews. "Chemistry" and other intangibles need to be assessed, but a structured interview based on best-practices increase the value of law firm interviews immensely)
- Development of innovative financial agreements (including alternative fees as desired by clients)
- Team-based evaluation (and "roundtables") of outside counsel firms and specific attorneys against objective, formal selection criteria, quantifying differentiation in legal expertise
- Fact-based, data-driven negotiations based on BATNA principles, establish optimal, improved economics (a structured, tested, and rigorous negotiation methodology is essential to success. Argopoint's approach, process and tools are backed up by decades of academic research)
- Following law firm selection, creating ongoing “best in class” outside counsel management processes, structures, and roles to manage outside counsel rationalization on a “go-forward basis” (Indeed, the benefits of any RFP process can, and often do quickly dissipate if appropriate mechanisms to manage and capture value are not put in place)
The heart of any process is an insightful law firm RFP tool itself- which must be carefully crafted to include well-posed questions and solicit metrics regarding law firms’ expertise and industry experience. There is little value in comparing cost proposals in a vacuum without fully understanding how firms’ capabilities relate to a client’s situation. To that end, RFPs in the legal field must be customized to solicit client and industry specific responses. Our experience has shown that investing the time and thought in creating a "decision-grade" RFP eliminates wasted time and is well worth the investment. Conversely, while law firm RFPs can be a powerful tool for clients, a poorly designed RFP can damage strategic relationships with law firms and attorneys, and generate volumes of unhelpful data.
Law Firm RFP (Request For Proposal): Solutions and Savings
Argopoint can provide substantial, valuable support for the RFP process. We are experienced in implementing these processes on a department-wide scale (including roll-out to outside counsel) at Fortune 500 companies. Our approach provides clients an overall legal sourcing strategy and frameworks, enabling processes and tools customized for the legal services marketplace, and robust, pragmatic “hands-on” implementation support and facilitation.
Our process enables our clients to select the outside counsel firms best suited to their specific needs and leads to a cost savings of five to twenty percent. In certain cases, we have seen cost savings as high as forty percent. A well designed outside panel also drives efficiency and saving inside the legal department (fewer, better firms are typically easier to manage).
Understanding where your department is on the journey, and how progress on that path can be accelerated is a critical first step. Argopoint's expertise and knowledge of leading departments "best-practices" are reasons why legal department leaders speak to us first when they want to get started. Meaningful, sustainable improvements are not easy in the complex in-house legal context - an early conversation with an objective outside expert can improve the chances of success significantly.