How to Prepare an Effective RFP for Legal Services

Analyzing RFPs for Legal Services

A Request for Proposal (RFP) is a formal invitation inviting suppliers (in this case, law firms) to provide their services to an organization. Several large organizations typically use RFPs so that they can compare and contrast legal service offerings and pricing options from various firms before making a decision. As you would imagine, RFPs in the legal services arena are much different than those used in other spaces, as the services are much more abstract in comparison to physical products. However, much of the process still parallels that of a traditional RFP.
RFPs are requested when an organization is looking for a major investment, such as a new service, product, solutions, or provider to take on a particular service. This is a common practice for organizations that outsource specific services to third parties. A Request for Proposal for legal services, however, can be a very lengthy and comprehensive process for both the law firm and the business requesting them .
By creating a Request for Proposal, an organization can begin to scope out the services they need, identify potential roadblocks, and gauge the price range for the services they are seeking. Because RFPs are much more structured than a regular Request for Quotation (RFQ) (a much more comprehensive and casual invitation to do business), the RFP process allows an organization to take a look at several law firms side-by-side, showing the exact costs and terms for each one. This is crucial in helping businesses save money, functionality, and productivity when on the hunt for a law firm.
Many companies will also make the mistake of conducting an RFP without consulting with their internal counsel first, which is never a good idea. Internal lawyers need to be able to weigh in with their own experiences to help shape the way that outside firms will interact with the company.

What to Include in a Legal Services RFP

An effective request for proposal for legal services should include several key components. Although the proposal itself will be tailored to meet the needs of the individual client, there are general items we often see that make them successful.
Scope of Services: In this portion of the RFP, you will describe the scope of the legal services you need. Much like an initial meeting with a lawyer, you will discuss whether you need litigation services or transactional support. You may even identify the subject matter involved, and the issues you believe are involved. Clients often find it helpful to identify separately the types of legal matters to be addressed. For example: corporate and general business, employment law, intellectual property and real estate. Clients can identify whether they seek advice, representation, a combination of the two or other specific legal services.
Client’s Goals: Once you have identified the areas of law involved, identify the goals you are seeking to achieve through involving outside counsel. These goals can range from purely functional "for my audit committee" to "to move my business forward with strategic advice." Identifying your goals helps outside counsel understand the level of service you are seeking, and the amount of legal issues you plan to address.
Capabilities: Include a description of your in-house team and your in-house needs. Are you a company that has a strong in-house legal department, or are you a company with limited in-house capabilities that seeks outside counsel for a broad range of legal matters? Often your in-house capabilities help identify any gaps in experience that help advisors strategize the representation.
Budget: Although you may not have an exact budget in mind, identifying a range provides outside counsel with important information needed to advise you. If an outside counsel knows the matter involves the potential of high exposure or has a high-profile, outside counsel often will have a higher budget range in mind than an outside counsel seeking to handle a run-of-the-mill employment matter. Often this information is provided in an effort to assess rates and level of expertise available.
Timetable: The time frame involved plays a critical role in how outside counsel responds to the RFP. A timeframe of "right away" (i.e., a week) or "after the holidays" will frame the outside counsel’s approach to developing a full understanding of the matter and with the proper level of detail. Similarly, an RFP that describes with specificity the preferred timetable will assist outside counsel with responding to the RFP.
Attachments: Providing copies of any relevant documents assists outside counsel with preparing the best, most tailored approach to your legal issue. Providing sample work product from previous matters shows prospective counsel the expected level of service, quality and response times you require.

How to Write a Solid RFP for Legal Services

Any document worth your while or the time of the firms you hope to entice into having a conversation requires an understanding of what to include and how to write it for maximum effect. Giving someone an assignment is one thing; giving it to them in a compelling way is another. A well-crafted request for proposal (RFP) for legal services sets the tone for your relationship with the firms in the second stage of your search.
At this point, you should have an idea of your goals and of what type of firm you want to represent you. Are you looking for a firm with a certain practice area? Are you shopping for a firm or a valuable resource for a specific matter? The RFP should include:
A Brief Overview of Your Company
This introductory section or executive summary gives a high-level look at your business and describes its goals and objectives to convey an overarching message. It’s also a good place to include the resources you believe are most attractive to prospective firms.
Specific Questions
The RFP should ask specific questions relevant to the firm(s) you want to interview to get to the heart of what is important to you in the hiring process. Strip out any boilerplate language and get straight to the specific concerns you have for this specific RFP.
Anticipated Timeline
Whether your review will take a few weeks or six months, give your firm or firms a sense of timing. If there is urgency to the search, say so. If there’s not, say that too.
What You’re Not Giving
This doesn’t mean the RFP should be all about how great you are and what you’re procuring. Rather, you should let the firms know up front how you expect them to reciprocate. Responding to an RFP is time-consuming, and unless there is a strong reason to respond, many firms will back out of the process.

Assessing Answers to Your Legal Services RFP

A well-crafted request for proposal (RFP) is an essential first step in selecting a legal provider. However, the ability to analyze and compare the responses you receive can be equally critical to ensuring you select the right firm to meet your specific needs.
When you go through the process of soliciting RFPs from your existing firms, or even to an expanded list of potential new providers, you will likely receive a wide range of proposals. They will no doubt vary in style, tone, and the information provided, but they can all be evaluated and compared on some basic key criteria.
Firstly, it is important to understand that any firm conducting business development in today’s environment should have a process for completing an RFP, so much so that firm marketing teams will often have RFP templates they use internally. While there will always be "sample" answers prepared by a law firm, they can serve as a useful starting point in evaluating the responses you receive. Existing profiles, recommender lists and other general marketing materials provided by a firm can also be offered by your existing or prospective firms in response to your request. One important factor they will not be able to provide is a clear understanding of how they believe their own firm will be able to assist you in the context of the specific matter. So, you should clearly review and analyze any of these general materials before making your clear shortlist.
The next step is to calibrate more specific content against your requirements for the specific work identified in the RFP. You should be looking for each proposed firm’s individual response to your specific circumstances , which should be qualified by descriptive language detailing how the firm would approach your matter. The following are minimum expectations against which you should evaluate your proposals:
Never underestimate the value of a well-written proposal. At its essence, this is a marketing exercise: the process of differentiating a service or a product in a marketplace where you seek to identify from a broader pool. A well-prepared offering, coupled with a relatively concise, but thoughtful and honest response to a request will go a long way in demonstrating a service provider’s competitiveness. The reverse is also true: assuming you only receive proposals from firms that are generally qualified and have a strong track record of serving your type of business, the difference in your final decision may very well come down to the quality of the proposal writing. In short, while some firms submit generic RFP responses, many will invest effort in their response to your RFP, and this effort counts. It will also give you an insight into the caliber of that firm’s marketing initiatives, and/or what value they will individually bring to your bottom line.
Finally, the process of analyzing and comparing your RFP responses can significantly aid in your ultimate decision by forcing your review team to consider which of the firms on your shortlist will best be able to meet your requirements in a changing business environment. The most effective, business-minded decision makers will have already grasped the importance of measuring a firm against their context before the RFP is launched, but a process of formalizing this analysis can really sharpen your decision-making process.

Common Pitfalls in a Legal Services RFP

The RFP process, when undertaken properly should be a constructive way of comparing the strengths and weaknesses of law firms and firms. Too often, hiring managers ask for information that is of little or no use nor do they probe the responses adequately enough to get below the veneer. This can happen for many reasons—ranging from simply being ill equipped in assessing the quagmire of information generated through the process to significant commitment or sponsoring issues. However, the following are some of the more common mistakes that can be avoided:
1- Not including details about your company’s operations and philosophy
2- Not establishing current problems and challenges
3- Providing too little time between the decision to go through the RFP process, sending out the RFP, and the RFP being due back to you
4- Not including all market players
5- Wrong people reviewing the submissions
6- Sending unnecessarily complex RFPs
7- Creating awe inspiring Request for Proposals
8- Not setting a clear process for the RFP
9- Asking about Fee Arrangements but not focusing on cost
10- Having a small number of proposals for comparison

RFPs for Legal Services Examples

While the situation is not as common as it once was, a major corporation, prior to going public, issued an RFP for legal services, in the summer of 2011. The question, or objective, of the RFP was "how to better manage our outside legal counsel." The scope of the RFP included the Continent U.S. and all practice areas in which law firms would be needed. The stated purpose was to better manage the outside relationship, the scope of services and the anticipated volume of work. There were 23 questions. Some of the more interesting questions included 1) Would you be willing to freeze hourly rates to level the playing field? 2) Will you agree to renumerate [the company] for excessive amounts of discounted hours billed? 3) Describe your policy on conflict of interest waivers, including a list of clients over the past five years who have conflicting matters. And 4) which of your clients have litigation matters involving [the company and/or its officers and directors at the moment.]
The outcome of the RFP was beneficial for the company. In addition to considering the responses and the discussion points of the RFP process itself, the Company learned that they were significantly overbilled when rates were charged that varied among the firms. Additionally, they established what they were paying outside counsel. And as a result of the RFP process, the Corporation was able to renegotiate fees downward – to the firm’s benefit – for a better than expected result .
An example of a smaller company, but probably as beneficial, occurred with a small publicly held company, in the fall of 2012. The company had typically used one or two shareholder law firms for its private placement and public offerings. The RFP was limited to the selection of either a one-stop or full service law firm for both "going public" transactions, as well as continued representation as a public company, once public. The company had a number of requirements that it needed fulfilled and because of what was perceived as an excellent long term relationship with its existing law firm, the firm was not a part of the RFP. The company met with the top three candidates and ultimately selected a larger firm, one that had been in the company’s history, but that had not represented them at any time recently. The pitch made by the selected firm, along with a reduction in price for work performed, both attracted and retained the client.
What was most interesting to note about this RFP process was that the company only listed four requirements for submission and that there were no follow-up questions from the company to the potential law firms. The RFP did not include a scope of work or specific pricing guidelines, nor did it suggest the levels of experience that the firm should have, relative to the intended work. The company noted that the RFP process resulted in saving thousands of dollars for both the client, as well as the law firm itself, in areas that heretofore had been a bit of an afterthought.