Smarter Relationships in Legal Services

Volume 6 • Issue 1 • November/December 2019
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Strategy and process in RFPs

Requests for proposal in the law

As corporate legal departments demand greater efficiency and quality for their legal spend, the ways in which they make legal purchasing decisions are evolving as well. In this article, we look at one particular aspect of this change: the increasingly common use of highly sophisticated “request for proposals”—or RFPs—some of which might offer law firms the prospect of becoming one of a client’s ongoing preferred legal service providers, while others might focus instead on a single matter in place of a simple pitch. Indeed, a recent Thomson Reuters article stresses this evolving emphasis, noting a number of trends in how clients are changing their approach to these documents, their goals, and the surrounding processes designed to help achieve them. Per Thomson Reuters, companies are hiring “legal procurement specialists” to help improve RFPs, using consultants to help weigh law firms’ proposals, and establishing their desired fee arrangements in the RFP itself.

Clients are moving away from RFPs that lend themselves to cut-and-paste marketing material.

It is no secret that clients are changing the ways they do business with law firms. Perhaps less attention, however, has been paid to how law firms are responding to these new demands. To help bring these perspectives to the fore, The Practice interviewed two leading law firms to learn more about their approach and how they conceptualize these issues from an organizational standpoint. “Drafting responses to RFPs is a demanding area of work and has shifted a great deal over time,” says Katherine D’Urso, chief client development officer at WilmerHale. “In years past, you could have dozens of pages going on and on about your expertise, something a bit fluffy about fees, and then have an opportunity to discuss details in person at the end of the process. Those days are long gone,” adds D’Urso, who served as chief marketing officer at Weil, Gotshal & Manges and King & Spalding before moving to WilmerHale.

Like D’Urso, Joanne Southern, chief marketing officer at Proskauer, has seen both a rise in the number of RFPs crossing her desk and a compounding of their sophistication. “In very general terms, there are two types of RFPs,” says Southern, who has also served in communications and business development functions, including Fried Frank and Ashurst, prior to Proskauer. The first type is what she calls “procurement-driven RFPs.” These, she notes, are about getting the most from external providers for the best rates and have grown increasingly common over time. What she is seeing even more of recently, however, are RFPs, “which tend to be driven by the general counsel or the business side of the clients. With these, we see different types of questions, and more and more often we are being asked to respond to these scenario-based situations. And, from our perspective, these are so much better for both of us.”

As D’Urso’s and Southern’s comments suggest, and as Thomson Reuters’s findings confirm, clients are moving away from RFPs that lend themselves to cut-and-paste marketing material and are instead searching for ways to match their core legal needs—which include metrics of cost, efficiency, expertise, and others—with their legal service providers. (For more on how clients’ approaches to legal purchasing are evolving, particularly with the rise of legal operations, see “Everyone’s a Law Company.”) Clients’ attention to detail and emphasis on value is reflected in how they construct their RFPs, including the scenario-based questions Southern describes (and which Trevor Faure discusses at greater length in “Smarter Law”). D’Urso sees a clear message through these trends. “Clients are saying, and they are absolutely right, ‘We expect you to be able to provide detailed proposals regarding costs and budgets for specific types of matters. You receive requests like these all of the time, and you have deep expertise in doing the work. Surely you can effectively summarize your services and explain how you will manage our matters and our costs,’” she says. “And so, we endeavor to do so, having embarked five years ago on embedding legal project management skills into our approach to managing matters.”

A Model RFP

As we have documented in The Practice, the rise of the Corporate Legal Operations Consortium (CLOC) and, more specifically, the increasingly important role of legal operations within in-house legal departments is having dramatic impacts on the market for legal services. The RFP process is no exception. Indeed, in 2017 CLOC released a “Model RFP for Panel Selection.” The document, among other things, provides a template for some of the key areas that a model RFP should cover, including the purpose of the request, instructions to potential respondents, a timetable leading up to submission, a scope of services, and key RPF questions. With respect to those RFP questions, CLOC suggests six key areas: law firm information, coverage and capabilities, relationship management and staffing, service delivery and use of technology, operations and compliance, and additional value.

Each question set is highly detailed. Many of the questions will no doubt look familiar to business development professionals at large law firms, but the model RFP does not shy away from asking specific—and potentially difficult—questions. In different sections, for example, the model RFP demands responses to the following:

  • Please provide specific examples of novel value-based fee proposals proposed that you have offered in the last three years, if any.
  • Please describe what technology you use, and where it is applied, in the following areas:
    • eDiscovery
    • Contract generation
    • Due diligence
    • Contractual analysis and obligations extraction
    • Legal project management
    • Reporting and MI
    • Other
  • Please describe your firm’s backup procedures in the event one or more attorneys assigned to the company leave the firm.
  • Describe your billing practices and systems. Do you use [INSERT EBILLING SYSTEM]?

These questions are not only direct but often meticulous in turning over every possible stone to find the right firm. For example, in the model RFP’s operations and compliance section (see image below), one question on information security includes 19 subsections and sub-subsections that gauge the respondent firm’s internal policies, systems, processes, capabilities, and active measures in place. Across the 19 separate responses, the client will also learn the answer to a question that goes unasked: How knowledgeable are you about information security, and what have you done about it?

And this is just a template published for general use. Companies’ various and highly detailed contexts would likely add more questions that would help identify which law firm is the best fit. If they take CLOC’s lead, they might add more questions. Of course, many companies have their own RFP processes in place that may or may not resemble CLOC’s recommendations. Nevertheless, this model RFP reflects many of the key areas that in-house legal departments are probing—in addition to highlighting the seriousness of the process.

The law firm RFP process

Years ago, D’Urso notes, an RFP might come along with a deadline of two or three months. Today, that deadline might be two or three weeks. “That is typically all the time you have to provide a complete response to a series of sophisticated questions,” D’Urso says. “And clients won’t be satisfied if you just reach for generic content. Clients demand more, and at a certain point we realized we needed to systemize our approach to ensure that we could provide a thoughtful response that will make us a contender for the business.” With these shifts in mind, D’Urso recently launched an overhaul of WilmerHale’s RFP process from start to finish.

Today’s RFPs require firms to be mindful of what clients are ultimately after … It is not always enough to check all the boxes.

Prior to the reengineering, which spanned a full nine months, the firm’s process was largely ad hoc and plagued by inefficient communication—not uncommon challenges in the legal industry. “Inevitably, a lot of time was spent racing against the deadline, playing carrier pigeon between content contributors, and not enough time was spent actually strategizing,” reflects D’Urso. “We knew the talents, experience, and strengths of our lawyers and felt we were not putting forward our best possible response to these RFPs. These challenges are widespread, as evidenced by the fact that clients have shifted to ever more specific questions in an effort to force relevant responses to their RFPs.” D’Urso knew the firm needed to adapt as well and keep pace with clients’ efficiency-driven approach. The result was a cross-functional, four-phase process for handling RFPs at WilmerHale.

Regardless of how a firm organizes its processes, both D’Urso and Southern stress that today’s RFPs require firms to be mindful of what clients are ultimately after, the right combination of professionals to assemble and deliver the firm’s best response, and how to allocate limited resources to accomplish it all. It is not always enough to check all the boxes. Law firms need a thoughtful approach to how they convey their excellence to clients across different media—including often-depersonalized contexts like RFPs.

 

Phase One: Initiating

RFPs can find their way to law firms through different channels. Some opportunities might be posted on public-facing fora where the firm could learn about them. Other RFPs might be directed to specific law firms’ business development teams. Typically, however, they come in through a partner who has worked with the client in the past. This is the first inflection point for the law firm—what D’Urso calls the “receive-strategize phase.”

Both D’Urso and Southern apply what they call a “go/no-go” approach in deciding whether to respond to an RFP, where the first order of business is deciding whether or not to spend (valuable) resources on the opportunity at hand. “We’re evaluating a lot of variables at this point,” says Southern. “Is it an existing client or new business? Do we have an existing relationship? What are the entry points?” As she explains, there is an opportunity cost associated with each RFP, and the go/no-go approach is about making that do-or-don’t decision as early in the process as possible to minimize wasted time and effort. “You’re evaluating, ‘Is this one we can realistically win?’ Because, to do it well, our people will need to invest a lot of time in the process. And not every opportunity is a good opportunity—particularly for a business like us where we want to be the high-value provider.”

Typically, RFPs come in through a partner who has worked with the client in the past.

“Most of the time, of course, it’s a decision to pursue the work, but there are times when we just don’t think we have enough of a prior relationship or the client’s focal points are not a good fit,” echoes D’Urso. “In these cases, it might be an instance where we politely decline.” The rationale behind making such an impactful decision so early in the process is geared toward efficiency—viz. minimizing wasted time—but requires a solid foundation of self-awareness. The firm needs to understand its strengths, its positioning in the market relative to its competitors, and whether this will be the best use of its people’s time. As RFPs continue to increase in sophistication (and thus demand more time and attention), law firms like WilmerHale and Proskauer are likewise becoming more discerning about which opportunities they commit to pursue.

In practice, according to both D’Urso and Southern, making these determinations typically means convening internal stakeholders, weighing the go/no-go decision, and then, to the extent necessary, strategizing the rest of the process. This initial conversation typically takes the form of a conference call that includes the relationship partner(s) associated with the RFP as well as some combination of professionals from marketing, business development, staffing, finance, diversity, and the firm’s conflicts-clearing group. Indeed, the diversity of roles often involved at this stage illustrates both the types of complex issues typically arising in modern RFPs, as well as the gravity that firms attach to the process. The partner will likely brief the group on the existing relationship and provide available context. Representatives from each function will then pose questions and raise points, underlying the importance of congregating a diverse group of perspectives and areas of expertise. Then, as D’Urso and Southern explain, the decision becomes: Are we in or out?

The decision could go either way. If the group decides to proceed, the strategy session commences. “That’s when we move right into strategizing regarding how to develop a compelling proposal and the project plan to do it,” says D’Urso. It is important to note that Southern’s and D’Urso’s respective teams often take the lead from that first meeting shepherding the process internally, ensuring that all aspects are accounted for completely and within time. To that end, the initial strategizing is centered on assigning those roles and establishing milestones to ensure the deadline is met.

 

Phase Two: Drafting

The second step—writing the actual proposal—is part science and part art. But before putting pen to paper, often firms will try to reach out directly to the client to learn more about their specific needs. “In the drafting stage there will often be outreach to the client,” explains D’Urso. “Most clients’ RFP processes include a moment where you can ask questions and they will respond, typically to the entire group of recipients of the RFP.”

As clients pressure law firms to write more economically, they are also asking for more information.

To Southern, this dialogue is critical. “Making that connection with the client enables us to really understand the piece of work that we’re bidding for,” she says. Southern continues:

You need to hear it from them—the key drivers for the process, what they’re trying to achieve from it, what their real issues are, what their challenges are. Then you can begin to think through the opportunities. But you need to, as much as possible, get into the shoes of the client. If you don’t have an existing relationship and can’t get that call with whoever is driving the process, it’s going to be very hard to win.

Having client input is critical, but that message still needs to come through the written proposal. And, as D’Urso describes, the proposal itself now reflects clients’ larger move toward efficiency. “They are not impressed by length,” she warns. In years past, law firms might have prioritized what D’Urso calls the “thud factor,” where quantities of text and pages were taken as proxies for depth of expertise and talent. “Look how many pages there are—we must be quite the experts because it took a long time to explain everything we do,” she quips. But all that has changed. D’Urso says:

Now the expectation is that firms are very focused and very tailored with their messaging. Many of the sections in RFPs, like the section about a firm’s practice information, has word or even character count limits. There was one that required 100 words max to describe each of various areas of expertise, and that was just painful. Typically, it’s hundreds of words, but it’s not thousands. This is no New York Times Magazine article about yourself.

As clients pressure law firms to write more economically, they are also asking for more information—namely, more data and on a wider range of issues (see “A Model RFP” above). “Clients more and more are interested in how you run your business,” says Southern. “Diversity, for example, is obviously a very, very important factor for all businesses and how responsible you are, and we sometimes need to provide statistical information to back up those values.” Both Southern and D’Urso note clients are increasingly emphasizing and measuring diversity through their RFPs. If clients are curious about how a firm lives up to its diversity priorities and pledges, they will not just ask for a statement—they will ask for their team data. This level of specificity often extends to other aspects of the proposed business relationship, such as what the CLOC template dubs “operations and compliance” factors. Beyond asking, for instance, how budgets will be managed, clients often ask how pricing will be determined, not just “in theory” but based on real-world information derived from historical trends on the matters that have come up in the past. In short, they want to understand how a law firm approaches its own business before hiring them to advise on theirs.

“You need to, as much as possible, get into the shoes of the client,” says Joanne Southern, chief marketing officer at Proskauer.

Southern’s and D’Urso’s business development teams are at the center of this activity in their respective firms. Both liken their team’s role for a given RFP to that of a project manager. “My team is leading all the content development and getting the copies of drafts in,” explains D’Urso, “Everything from unifying the tone and style of the writing to making sure that the content we’re receiving is genuinely responsive to the questions being asked and in tune with the milestones we’ve set.” None of these professionals, it is worth noting, is a lawyer—all have business backgrounds. In talking with a peer at a Magic Circle firm, whose business development department she notes is many times the size of a typical U.S. law firm, D’Urso learned the absence of “J.D.’s” in the Magic Circle firm was largely comparable. “I asked him, ‘How often do you have lawyers in those positions?’ Because it seems, on the face of it, like such a good idea,” she recalls. “And he said, ‘It’s a tiny percentage.’ He said, ‘It just very rarely seems to work. Either the lawyers are not interested in these kinds of business development roles or they are not particularly suited to them.’”

Of course, lawyers have a key role to play in the drafting of law firm RFP responses. After all, the firm is competing for work that its lawyers will ultimately do and will make its case by placing its lawyers, their insight, and their experience center stage. “My team is the packaging of it and the selling of it; we are the team that’s putting it all together,” says Southern. “But the lawyers are the problem solvers. They are the ones who can look at what the client wants and figure out, ‘What is this going to take?’” Particularly in RFPs that assess law firms by asking them hypothetical, scenario-based questions (for more, see “Smarter Law”), the lawyers’ expertise and input are, by the RFP’s own design, at the center of the exercise.

 

Phase Three: Submitting

The third phase is finalizing and submitting the RFP response. “At that point, we want to get the final pricing proposal and the final RFP package back to the partners so they have a chance to review,” says D’Urso. A part of the RFP revamp at WilmerHale was about ensuring that submission was not pushed too close to the last minute, which requires setting clear, achievable milestones and holding people accountable for meeting them. Under the new RFP process, D’Urso’s team will aim to get a proposal to the relevant partners two or three business days ahead of the deadline for their review. Then, once a set of “cold eyes” (someone who was not otherwise involved in the given RFP) has read through for typos and other minor errors—“There’s nothing so irritating as having worked hard on these things and then have embarrassing typos in the final product,” says D’Urso—the proposal goes out the door and to the client. The client may request that an oral presentation accompany the final submission, in which case D’Urso’s team would help prepare the lawyers and materials for the in-person meeting, but otherwise the ship has left the harbor.

“Becoming part of a preferred-counsel program is like getting a license to fish,” says Katherine D’Urso, chief client development officer at WilmerHale. “Now you must go fish.”

As they wait for the results to come back, D’Urso’s team gets to work mining their proposal response for data—for instance, on billing estimates or scenario-based answers—that the firm can learn from. As D’Urso explains, the emphasis is on trying to capture the knowledge and staff time going into each RFP in a way that enhances institutional memory and enables them to make substantive connections for future proposals. “The goal is to become more efficient and more excellent in your delivery to your clients,” says D’Urso. “That’s why we’ve built this added step into our submission phase.” She continues:

Now with each RFP, we take it apart and put reusable content into the technology platform that we have in place. This way, someone isn’t sitting there in three months suddenly going, “I know we had that one RFP that was just like this. It’s got to be on somebody’s hard drive,” or “Let’s go search all of iManage and see if we can find that one document that did a great job talking about this practice area.” Instead, while it’s fresh in everybody’s heads, we dismantle it into usable bits that we can later update or at least use as a common internal reference point of what we have done in the past. The important thing is we now have a place to house all this knowledge, and that will certainly be to our advantage moving forward.

 

Phase Four: Win or lose

The fourth and final phase is postsubmission. Of course, there are roughly two ways it can go: win or lose. If things do not go the firm’s way, the postsubmission phase resembles a postmortem—the firm needs to divine where its proposal went wrong or at least where it came up short. The partners might even call the client directly to learn as much as they can about the client’s specific areas of concern or where the firm simply did not stack up against the competition. Part of the postmortem is about evaluating the firm’s performance in the RFP process itself—where something might have gone wrong in the process and how to prevent that error from happening again. At the same time, because RFPs are indeed becoming increasingly substantive, it is also about figuring out where the firm might have bona fide gaps that it needs to address. In this sense, RFPs can be a valuable learning experience and help inform a firm’s overall strategy.

If the firm wins, however, and the client selects it as one of their preferred legal service providers, then the process is in many ways just beginning. Commitments were made and now need to be translated into concrete deliverables. For example, D’Urso notes, “We might have agreed to produce a report every quarter about the profiles of the people doing work to show we’re measuring up to the desired levels of diversity.” The agreement likely also requires additional measures of finalization, such as through an engagement letter, along with all the related financial aspects. Then, of course, comes the actual work. “We always like to say winning a robust, multipractice RFP and becoming part of a preferred-counsel program is like getting a license to fish,” says D’Urso. “Now you must go fish.”

It’s about the client

How do law firms stand out in such a crowded market and win the RFP process? It is worth acknowledging that half the battle is just getting to the RFP. D’Urso explains that excellence is only the entry fee. “In the world that we compete in, excellence, and just getting to excellence, is really hard,” she says. “You have to show that you have an extraordinary pipeline of talent and your ability to manage that talent is honed. And then the client needs to experience that in the work that is performed. So, excellence is a very high standard, and yet, it’s table stakes.”

If the firm wins, then the process is in many ways just beginning.

Southern explains that once a firm gets to a point where it is responding to a formal RFP, the most important differentiator is the firm’s ability to respond to the client’s specific needs—it is about the client, not the firm. “It’s what we can do for their business,” she explains. “I think about credentials-based pitching like dating. Why would you talk about yourself the whole time? You’ve got to be interested in the other person.” The test is not whether a law firm is excellent enough—the test is whether it is best suited to handle the client’s specific legal needs that prompted the RFP in the first place. “By the time a client is coming to a large law firm for legal help, it usually means the complexity of what’s involved is significant, and so that ability to make the client feel deeply heard and understood and responded to is paramount,” echoes D’Urso.

When asked about competing in tomorrow’s legal services market, Southern is clear: law firms cannot afford to be passive. “Business needs to be earned,” she says. “You cannot be complacent. You have to stay business focused. We’re not a commodity product; we’re a high-value essential piece of a client’s business. We have to keep communicating, keep listening, keep evolving to meet those needs, but it has to be a client-first strategy.”

To D’Urso, law firms need to embrace transparency as a necessary part of efficiency and good communication. “More and more, the clients want to be looking at the same chart you are looking at and be able to point to the budget for this particular matter and ask questions,” she says. “The firms that succeed will be the ones that can demonstrate their excellence with that kind of transparency because it enhances the relationship with the client. And when it comes to building relationships, which is by definition a one-to-one experience, Big Law firms shouldn’t feel ‘big’ to a client.”

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Smarter Relationships in Legal Services Volume 6 • Issue 1 • November/December 2019

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