Why, What and When to Issue RFPs to Outside Counsel
By James J. Stapleton and Matthew Prinn
Chief Legal Officers, Legal Operations Professionals, and those tasked with the procurement of legal services are always looking to drive value and improve efficiency. Many are considering whether it makes sense for their legal department to issue an RFP to create a preferred panel of law firms or explore multiple options for major legal projects. Understanding why you should issue an RFP, when is the best time, and what to ask are all essential questions before moving forward.
While the volume and complexities of RFPs in today’s legal market have significantly evolved, there are still legal departments struggling to understand when and how to manage an RFP efficiently and effectively. The RFP process is just a tool, but it will only deliver the results you are hoping for if used in the right manner, at the right time, and with the right strategic considerations. A rake may be a great tool for leaves, but it is the wrong tool to shovel snow. The way a legal department customizes the RFP tool will directly correlate with the success of the initiative.
Government entities have strict guidelines for managing an RFP, but the private sector has the flexibility to tailor the process. Legal departments should leverage this freedom by carefully considering what information to share, what questions to ask, and how to frame them to achieve the best results.
Why Issue an RFP
Leveraging RFPs to better control costs is one of the top reasons why legal departments issue them. According to the recent Thomson Reuters 2024 Legal Department Operations Index, issuing a matter- or project-based RFP in a competitive bidding process was ranked as the second most effective tool—just behind negotiating an hourly discount. Nearly half of the survey respondents ranked “using a matter-based RFP” among their top three most effective tactics.
Some of the top reasons driving the "Why" of issuing RFPs include:
· Promoting cost management and efficiency
· Finding specialized legal expertise
· Further vetting options and performing due diligence
· Applying consistent legal service terms
· Consolidating or converging outside counsel
· Ensuring internal compliance and transparency
· Extracting innovation and leveraging technological advancements
· Managing large projects requiring global or multi-jurisdictional coverage
· Supplementing in-house team resources
· Creating a platform to consider new legal approaches and strategies
If you already know which firm you want to use for a project, it is a wasted effort to make your outside counsel go through the RFP process as a “stalking horse.” There are more direct ways to communicate with a firm, such as negotiating deeper discounts, converting billing to an AFA (Alternative Fee Arrangement), or discussing other objectives.
Many legal departments are now bypassing traditional, formal RFP processes and instead scheduling direct meetings with their preferred providers to address pressing issues or explore new opportunities. In fact, BTI Consulting recently released a survey noting that 79% of clients plan to bypass RFPs and cherry-pick firms based on referrals and thought leadership. This approach works particularly well when you have a strong relationship with a firm and can resolve pain points through honest discussions rather than a formal RFP process.
When to Issue an RFP
RFPs are typically used in two main scenarios:
1. Panel RFPs
These are used when a legal department wants to create a panel of preferred firms for a significant portion of their work in exchange for increased value and efficiencies.
Three important considerations for a successful panel RFP:
1. Internal Buy-In: Ensure management and legal/business teams support the initiative and understand its objectives.
2. Clearly Defined Objectives: Avoid a scattershot approach. Focus on specific improvements and ask a limited number of targeted questions.
3. Realistic Project Schedule and Resources: Poor planning often derails RFPs. Consider a phased approach to avoid overwhelming your team.
2. Project RFPs
These are used for clearly defined scopes of work, allowing legal departments to compare options and negotiate market-based pricing.
Key considerations for project RFPs:
1. Timing: These often require a short turnaround, so concise, focused questions are essential.
2. Scoping: A detailed project scope is necessary for firms to provide competitive bids, which can be time-consuming to prepare.
3. Technology: Legal tech advancements now enable efficient management of RFPs, virtual pricing sessions, and follow-up meetings.
More sophisticated legal departments combine both approaches, creating a panel every 3-5 years while using project-based RFPs as needed.
What to Ask in an RFP
Strategic questions allow you to make apples-to-apples comparisons among firms. Here are key elements to include:
A. Basic Elements
1. Description of the law firm (history, size, core practice areas, structure)
2. Services offered and alignment with your company’s needs
3. Management of large-scale legal projects
4. Pricing formats and ability to offer fixed fees or predictability
5. Team biographies and expertise relevant to your needs
6. Representative experience (case studies, litigation history)
7. Conflict check procedures and compliance with ethical standards
8. Client communication protocols during the selection process
9. Proposed legal strategies for specific challenges
10. Use of legal tech and cost management tools
B. Forward-Thinking Elements
1. Differentiation: What makes the firm unique?
2. Client service processes, including feedback and satisfaction tracking
3. Plans to learn about your company, industry, and competitors
4. Insights into litigation strategy and business decision support
5. Examples of risk mitigation and preventative measures
6. Communication practices regarding fees and unexpected costs
7. Quality assurance processes and updates on industry regulations
8. Team management, including attorney selection criteria
9. Specific industry experience and client references
10. DEI (Diversity, Equity, and Inclusion) initiatives and CSR (Corporate Social Responsibility) practices
C. Far-Ranging Elements
1. Refined descriptions of services and expectations
2. Bilateral client feedback mechanisms
3. Hypothetical scenarios to evaluate the firm’s problem-solving approach
4. Precedent-setting cases and innovative approaches
5. Long-term legal risk analysis in corporate governance
6. Integration of business acumen into legal solutions
Conclusion
Issuing an RFP can be a powerful tool for selecting outside counsel and driving value, but only when it is thoughtfully crafted and strategically implemented. By asking the right questions and tailoring the process to your needs, you can achieve greater cost control, improved efficiencies, and innovative legal solutions that align with your organization’s goals.
James J. Stapleton is the Managing Principal of Client Sciences. Mr. Stapleton spent several decades building multiple AmLaw 100 law firms and large accounting firms including PwC and Arthur Andersen, during which time he managed over 7,500 transitions between law firms on behalf of clients.
Client Sciences works with clients to reduce legal fees, optimize relationships with your law firms and streamline your internal legal processes. Mr. Stapleton can be reached at 408.440.7660 or via e-mail at: james.stapleton@clientsciences.com.
Matthew Prinn is a principal in the RFP Advisory Group, based in Boston. Matthew has 20 years of experience working at small, large and mid-size law firms in the areas of business development, marketing, project management, pricing, and operations. He also has advised legal departments on best practices in creating and managing preferred panels and matter specific RFPs. Mr. Prinn can be reached at 857.400.4767 or mattprin@RFPag.com.
