In big law, the request for proposal (RFP) process is challenging. The client requesting the RFP is tasked with spending a lot of time weighing the qualifications and price points of sometimes numerous law firms. Meanwhile, the responding firms have to spend countless man-hours spread across multiple teams to create a work product that, if not selected, might be considered somewhat pointless. Nonetheless, this is a necessary staple of the industry. When an already difficult process gets ramped up by a 24-hour deadline, entire legal operations departments need to fire on all cylinders just to make it to the race.
The standard RFP process usually starts with the marketing and business development department or with an attorney who enlists the marketing department to develop a response. A conflict check is run, and, if viable, the attorney and/or business development managers determine whether a response is worth pursuing. The marketing team begins to gather applicable marketing materials and alerts the pricing team if non-standard pricing has been requested. As part of Ballard Spahr’s Client Value and Innovation team, I see five to ten new RFPs weekly from both current clients and new targets. As a strategic pricing analyst, I scour each RFP to find out what the client expects from a pricing and client value perspective. I then work with partners to model a pricing arrangement that meets the client’s needs while simultaneously satisfying internal firm profitability benchmarks.
The pricing process alone can take 30 minutes or 3 days, depending on the complexity of a potential matter. We work with partners and proposal specialists from the marketing and business development team to determine which diverse attorneys will be included and how the work scope will affect the work distribution among partners, more junior attorneys and paralegals. The pricing process is a three-legged stool. Part of the RFP pricing process involves taking the partner’s knowledge based on prior experience about who will do what work and how long it will take. Another part involves using the knowledge gained by pricing team members in pricing similar matters. Still another part involves mining historical data to tease out an appropriate work allocation or hours projection. Sometimes, the client requests a fixed fee for a simple transaction; other times, we have to connect with multiple partners and condense data from numerous historical matters to develop hours estimates for 6+ litigation phases, all while determining the likelihood of settlement in each phase to determine an appropriate fixed fee per phase to balance out the risk of early settlement. RFPs can sometimes have that “box of chocolates” kind of randomness.
Clients need outside counsel, and law firms need clients. We’re all in this together so every cog in the RFP wheel can do their part to ease the pressure and, in turn, contribute to more timely, informed, and cost-effective RFP responses.
Here are some quick tips for both clients and outside counsel in managing the RFP process:
- Clients – Communicate exactly what you want outside counsel to do and clearly set forth your expectations. Vague requests often elicit inaccurate or overly broad responses. A clear-cut request will allow responding pricing teams to pinpoint relevant historical or market data that can give firms the confidence to offer deeper discounts.
- Responding Attorneys – Understand that even if you don’t see it happen, there are a lot of moving pieces being utilized in every response. Don’t wait until the last minute to notify your support staff, and advocate for your operations teams by asking clients for at least a week to respond to medium to complex requests. To help the pricing team, rack your brain (and your colleagues’ brains) for relevant historical matters to draw from and be ready to talk about the team that will be responsible for doing the work.
The RFP process isn’t going anywhere. Every year, clients are becoming more and more sophisticated and disciplined in the way they select legal counsel. If we want to keep up with the times, we not only have to continue to leverage ever-evolving technology solutions; we also need to focus on continuously improving our ability to communicate with each other effectively and responsively.