BUYING LEGAL COUNCIL

Open your Mouth or Open your Wallet

My grandfather loved getting a good deal and didn’t hesitate to bargain. He applied “Open your mouth or open your wallet” to anything from buying skis to outdoor garden furniture. When his neighbors complained that they didn’t get the same low price or the upgraded version, he would say “well, you didn’t ask for it, did you?”

Are you like my grandfather’s neighbors? D. Casey Flaherty says some clients are. He found that clients aren’t asking law firms to change the way they deliver services. Firms might realize they need to change and become more efficient while remaining effective. However, unless you ask and tell the firms specifically what you want and how they can add value, firms won’t know what will satisfy you and your organization.

Casey warns that asking for discounts doesn’t do the trick as it is unlikely to modify the firm’s and their lawyer’s behavior. Instead, open your mouth and ask questions such as: To improve legal service delivery, what does your firm do to leverage your legal expertise through process and technology? Do you have credible evidence (descriptions and metrics) of your process improvements and innovation? To learn more, read Flaherty’s White Paper Unless You Ask, A Guide for Law Departments To GetMore From External Relationships”published by the ACC.

Asking is particularly relevant for RFPs. 

Matt Prinn of K&L Gates recently hosted a special session for us, titled “RFPs: Insights from a law firm’s perspective”. As a business development professional in a large law firm, his team answers hundreds of RFPs every year. Prinn found that some RFPs ask much better questions than others.

Examples of BAD questions are:

Are you willing to charge [company] on a ‘most favored nations’ basis (i.e., rates no higher than those charged by your firm to your largest and most influential non-pro bono client)?” Prinn says: “I’ve never seen a law firm agree to this. No smart firm would say yes, since we have clients of all shapes and sizes. Why would we give you the same deal we give a $20 million-a-year client if you are giving us $50,000 of work?”

“Please enter a rate for the following titles. The below rate will be the rate for all people of this title. For example a $500 partner rate means all partners would bill $500.” Prinn says: “This particular question was for an RFP touching on half a dozen different practice areas across a few continents. Some areas were very complex bet-the-company work, some more commodity-level work. Firms can have offices in low cost areas of the world and in high cost centers. Law firms understand the idea behind a blended rate, but to think that we would charge you the same price per hour for a bet-the-company case as we would for a standard matter is unrealistic. You will not the get “A” level lawyer if you force the firm to commit to fixed rate well in advance of them knowing anything about the matter or the surrounding facts. Firms will include a number as requested, but have no intention of being held to these numbers if the matter requires top lawyer in a high cost market. No firm is likely to ever staff a $900-an-hour lawyer on a significant matter for the client if they were expected to tie it to the blended rate which could be hundreds of dollars cheaper. Firms will either pass on the project or require a separate fee structure. You can’t trick a firm into doing a matter at a huge loss.”

So what should you ask in your next RFP?

  • When asking firms to price matters/matter portfolios, provide detailed information on budgets and historical legal spend in each legal area you want firms to bid on.
  • If you include a rate card, provide a detailed narrative on how it should be interpreted.
  • If you expect a minimum discount level, make it clear at the start of your RFP.
  • Be transparent on how many rounds of pricing negotiations you plan to have.

The above materials are accessible on the Buying Legal Council Members website.

The Buying Legal Council is the trade organization for professionals tasked with sourcing legal services and managing legal services supplier relationships. We support our members through advocacy, networking, education, research, and information. Our mission is to advance the field of how legal services are bought.

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