Three Reasons Why RFPs Fail

Author: Richard G. Stock - Canadian Corporate Counsel Association Handbook, Spring Edition, 1999

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 reasons.

Poor Data

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.

Unclear Expectations

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.

Too Busy

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.

The successful 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.