09:43, August 25 154 0 abajournal.com

2017-08-25 09:43:05
How to create a winning law firm RFP



This Q&A has been condensed.

Ari Kaplan: Tell us about your background and the genesis of the Buying Legal Council.

Silvia Hodges Silverstein: In many large companies, legal procurement professionals now work alongside in-house counsel to buy corporate legal services and ancillary legal services. Yet legal procurement is still a relatively new discipline. In September of 2014, we formed the national legal procurement trade organization, the Buying Legal Council, to support and educate legal procurement professionals and other buyers of legal services. Everything that we do is focused on educational networking around the purchasing of legal services. The Buying Legal council has many members among the Fortune 500, as well as multinational and governing agencies around the world. The 2008 financial crisis really accelerated the process for the adoption of legal procurement. I would say the publicity about billing practices, really big-ticket spending by large corporations along with profit pressure that many corporations are facing are at the root of this change. We’ve really seen the same developments in other professional services, including management consulting and audit services. It’s typically companies with significant legal spending that are the first to embrace procurement in the purchase of legal services, particularly the pharmaceutical industry and financial services as well as energy companies and utilities.

Ari Kaplan: The Buying Legal Council recently published Winning Proposals: The Essential Guide for Law Firms and Legal Services Providers. Why did you focus on that particular topic, and how did the collaboration with the Buying Legal Council arise?

John de Forte: Proposals have been a fundamental aspect of business development for all professionals, but the skills required to do them well don’t necessarily align with traditional legal skills. For a long time there has been a requirement to help fee earners in the legal profession and in others to learn the required skills, and that’s how I got involved in this field. It’s been the main part of my work for probably 30 years and an area of fundamental importance to a diverse majority of professional services providers involved in the corporate world. I knew Silvia for many years and have been very interested in what she was doing with the Buying Legal Council. She suggested that a book on this topic specifically aimed at the legal profession would be valuable.

Ari Kaplan: How is the growing influence of procurement changing the win criteria?

Silvia Hodges Silverstein: Tendering (as it is known in the U.K.) or responding to RFPs (the practice in the U.S.) has become the standard method by which clients choose legal advisers, and it is definitely a different ballgame. Making the most of these opportunities really continues to be a challenge and even more so now that procurement is involved. Procurement professionals analyze information and use data to develop an evidence-based rationale to secure a major reduction in legal spend. What’s changed is that choosing a law firm has to make business sense. In sourcing legal services, procurement leaders take a process-driven business-to-business approach that they have used in other areas of spend, such as tax audit and management consulting. Procurement teams support in-house counsel to develop a purchasing strategy and processing criteria. It is still about who can do the work but considers who is able to deliver the work on time within budget, as well as who would staff in the most appropriate way.

Ari Kaplan: How should firms measure the ROI of their proposal activities?

John de Forte: Traditionally, firms track their wins and losses, but there is an increasingly strong case for trying to be a bit more sophisticated about it. We live in the age of panels and frameworks, which means that a winner or a loser may not be clearly defined. Your objective might be, for example, not to come in first, but to win a larger share of the available spend so any analysis of the return on investment has to start with some closely defined objectives. It would be a good discipline for firms to measure their cost on a proposal-by-proposal basis to refine your judgement about which opportunities are best to pursue.

Ari Kaplan: How have you seen organizations achieve success beyond recording wins and losses?

Silvia Hodges Silverstein: Typically, it is the chief financial officer or financial director who mandates procurement’s involvement with the buying of legal services. The goal is to help counsel reduce spending and ensure that they buy legal services in compliance with company policies while maintaining quality. Other drivers include the desire to achieve a more objective comparison of different law firms through measuring and benchmarking value, as well as streamling relations to improve efficiencies and really find better ways to structure fee arrangements or to budget to increase predictability and transparency. Legal procurement professionals today engage in fee negotiations and monitor each firm’s billing behavior to ensure adherence to billing guidelines.

Ari Kaplan: What do winning proposals have in common?

John de Forte: Every proposal is different, and decision-makers will have unique criteria and preferences. But there is a recurring pattern of what tends to characterize a successful proposal. It comes down to four essential ingredients. First, understand the issues which are important or should be important to the prospective client, including translating the organization’s challenges into a legal context. Second, offer practical solutions tailored to those specific issues so it’s not just a question of highlighting your general experience but rather explaining how you will apply your expertise in a particular practical context. Third, translate the technical solutions to articulate the benefits that the organization will gain from having taken your proposed course of action. Fourth, provide clear and objective evidence to show that the firm is able to deliver that solution or set of solutions.

Ari Kaplan: What can attendees at the North America Legal Procurement Conference on Sept. 6 in New York expect?

Silvia Hodges Silverstein: Our focus will be on legal market intelligence and we have great speakers from the client, law firm, and supplier looking to understand what kind of information is most valuable.

Listen to the complete interview at Reinventing Professionals.

Ari Kaplan regularly interviews leaders in the legal industry and in the broader professional services community to share perspective, highlight transformative change, and introduce new technology at his blog and on iTunes.