Why RFPs Fail
G. Stock - Canadian Corporate Counsel Association Handbook, Spring
There are a
few good reasons why law departments prepare requests for proposals
(RFPs) for legal services from outside counsel. Access to the very
best lawyers in this country's very best firms is not easy, especially
when relationships, results and service are overtaking price in
choosing and retaining counsel. Corporate counsel who want innovation
and a continuous investment of time from law firm partners are prepared
to offer to a volume of quality work over a two to three-year period.
In a number of economic sectors, such as insurance and local government,
cost pressures are severe and RFPs are used to stimulate productivity
improvements and cost effective measures with outside counsel. In
the face of these imperatives, why do so many requests for proposals
fail, once the preparations for them begin? There are three good
There are very
few Canadian law departments which maintain fully integrated "matter
management" systems. Almost all products are US-based and are usually
cost-justified with good volumes of outside legal work each year.
Departments spending over $500 000 in outside counsel fees each
year for dispute resolution / litigation should look into matter
management systems. These usually include case information, a calendaring
feature, timekeeping functions, outside counsel management, a charge-back
feature, and the capability for a variety of management reports
which analyze cases / files and legal bills. Stating expectations
to outside counsel for service, results and price is difficult without
good historical data.
This is a problem
on two levels. The first is a failure to obtain buy-in from senior
management or possibly board members for the RFP process. There
are often strong relationships between the partners of law firms
and individuals in the corporate family. These can be disrupted
if the partner's law firm is not retained due to an unsuccessful
proposal. The president, CFO or a board member can cause the RFP
preparations or selection process to stall or stop unless the expectations
and commitment are clear.
The second set
of unclear expectations is also a challenge for those who issue
RFPs. This amounts to not declaring the selection criteria to law
firms who prepare responses to Request for Proposal for Legal Services
. There is much cynicism around the notion of "beauty contests",
and the lack of a level playing field. Some law departments, however,
are explicit about their objectives for price, technological innovation,
or cycle times for files.
Members of law
departments, especially General Counsel, have no time to spare.
Discussing and agreeing upon the architecture of a request for proposal,
selling the purpose and implications to internal clients, and completing
the analysis and selection processes is time-consuming. In some
cases, this can amount to 100 to 150 hours across a three-month
period. To this is added the challenge of finding money in the budget
for consulting support or to acquire the technology to support the
new working relationship with outside counsel.
request for proposal depends on good data and preparation, clear
expectations with internal clients and outside counsel, and enough
quality time by the General Counsel to follow through in the process.