Considering Law Firm Options to Propose on Your Work

By James J. Stapleton, Managing Principal of Client Sciences

I have known some very successful law firm partners who feel that the most important question during the proposal process is not “what does the client want?” but “who else is being considered for the work?” Why? Because everything law firms do is affected by their competition; their fees, their service mix, their client care and all other elements that make up the competitive profile of a specific law firm. Even if an attorney has just a rudimentary understanding of the competition, she knows two things:

1)      They will have a strong idea as to the strengths and weaknesses of their competition.

2)      More subtly, the client will indicate what they deem important by their law firm options.

Every law firm that bids on your work wants your work. As an in-house counsel and purchaser of legal services, it benefits you to do two things to improve your chances of landing the optimal client/firm relationship. First, if you only have two or three firms proposing, I would not share the names of all bidding firms, particularly if they have similar profiles. If you are considering four or more firms (assuming from different categories of legal service providers), then I would share the names of all competing firms.

Here are seven categories of law firms that you might consider for your legal work:

Leader. By any objective criteria, this firm should be considered the natural leader for your legal work. The comfort level is substantial, the client care is excellent, they know your industry and they are the first name you consider when listing alternatives. They can definitely execute the work with high quality. They may be among the priciest of alternatives.

First Challenger. The second firm you consider, option #1a to the leader’s #1. Virtually as good as the leader, and most likely superior in some important ways, but perhaps not quite as impressive in a few categories. Perhaps you don’t know them as well, or their brand is unproven in your eyes.

Smaller firm with a more optimal cost/service mix. If the first two firms are in the AmLaw 100, this is your AmLaw 200 choice. Still an exceptional firm with a solid if not great reputation, it has some holes, but the shortcomings may be immaterial. In any event, they are likely to have a more appealing fee structure in comparison to your first two options. And they may present a unique benefi. They may even have higher quality or more experience with respect to the services needed.

Maverick Massive. Given the fact that AmLaw 100 firms have taken a beating since 2009, some of them are bending over backwards to attract clients. The local office of a large national or international firm may not match up as well as the other competing firms based upon local resources, but they are hard to beat if they decide that they really want a client. They have financial resources that are difficult to beat. I was involved with a mid-sized public technology company that fired their New York white shoe law firm and was ready to engage a large local technology law firm, but another New York white shoe law firm made them an offer they literally couldn’t refuse.

Non-traditional firms. Legal services are taking on all sorts of appearances these days. There are over 400 technology startups that offer or otherwise participate in the legal service profession. These are typically firms run by businesspeople who have substantial experience and expertise in streamlining services. As legal project management experts, they can often offer a better combination of reduced fees, improved efficiencies and better service than can traditional law firms.

Boutique. I worked with a small Midwestern employment boutique that was trying hard to get the work of a Fortune 150 client. They had 15 lawyers. Their main competition was one of the largest employment firms in the world. They wanted the work, pursued the client aggressively and ended up engaging the client. The best people in these firms are often directly from AmLaw 100 firms and have similar if not better capabilities. Well worth your consideration in many instances.

Incumbent. You may be privately thinking of them as “the-firm-that-I-am-about-to-fire,” but I would include them in the mix for two reasons; first, because the incumbent is often willing to bend over backwards to retain work, particularly if they are just starting to realize that there are service problems in the relationship. And second, you’ll want the other firms to know that the incumbent is being considered. That will help keep them honest.

Again, I suggest that you let each of them know who you are inviting to propose. Given that law firms should know their competition well, it serves as an indicator to the law firms as to what you consider to be important criteria for your decision.

Each of these options are designed to help you find a mix of law firms that is optimal for your needs. The legal profession is competitive, and as a consumer of legal services you can leverage that competition to achieve the best possible output. Your company’s leadership will generally support this approach, given the attention you are paying to being cautious with corporate resources.

James J. Stapleton is the Managing Principal of Client Sciences. He has managed over 7,500 transitions between law firms on behalf of clients.

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