Reverse Auctions for Outside Counsel Gain Favor

By C. Simmons

August 2012

For legal matters susceptible to flat fees, Marsh & McLennan Companies gives a group of law firms from five days to fill out requested information, such as a legal plan, experience and proposed pricing, said Michael Caplan, the COO for the general counsel's office.

In the Deutsche Bank version of an auction, "Clicks4Legal," firms on the bank's preferred counsel list submit bids for flat fees, said Rose Battaglia, COO for the legal department. The company began its auction process in 2007 and has expanded it to a range of matters.

Argopoint Weighs In

Argopoint’s more innovative clients are increasingly active in (and pleased with) their use of reverse auction when procuring legal services. Carefully designed and appropriately implemented reverse auctions can significantly reduce the cost of legal services without compromising the quality of legal services. Argopoint has helped clients use reverse auctions to measure legal service quality (e.g., the fit of a firm’s proposal to the client’s specific needs), in addition to simply comparing matter proposals. While there are risks associated with being overly aggressive in the implementation of such auctions, Argopoint has facilitated the successful use of such auctions for significant, high-stakes litigation. A strategic approach to the firm evaluation and selection process enables clients to regain control in purchasing legal services.

The Argopoint approach to situations such as this integrates fact-based analysis, sound business judgment, and a focus on timely implementation through collaboration, data-driven analysis, actionable recommendations, and focused results. While our expertise is specialized, it is our policy to be transparent with our clients in our approach, data analysis, and the supporting evidence that underlies all of our recommendations.

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