Tabled is known for being a super easy way to set up a legal front door and to triage and collaborate on work internally and with external organisations such as law firms – we call this Connected Matter Management.
Behind the front door and as part of Connected Matter Management, the platform supports in-house legal teams with their law firm panel management with RFP tools. These RFP tools help in-house legal teams engage outside counsel more efficiently, creating and gathering structured data at the same time to underpin spend and relationship management.
As part of our series of GC interviews we conducted a recent roundtable with the fabulous:
about their experiences of using structured RFPs for panel selection exercises and the ongoing instruction and management of outside counsel.
Why use RFPs at all? What is the rationale for having a structured approach to requesting quotes or proposals from outside law firms?
For Heather Torres, the impetus for formalising the engagement process was born out of a desire to streamline the number of law firms Sonnedix were working with after years of engaging law firms on a fairly ad hoc basis:
“We were working with about 60 law firms globally and that became really unmanageable. We were spending tonnes of time negotiating engagement letters and doing all this stuff and so we sat back and said: OK, what can we do to make this process better? Let’s do an RFP. Let’s whittle this down to as few firms as possible while still giving us a lot of breadth.”
For Sonnedix, the principal goal was to have broad representation in each of the company’s key jurisdictions which meant that they mainly looked for firms that were more of a ‘one stop shop’.
For Ben Weinberger, the key driver for having a structured and consistent approach to engaging law firms was about being able to make meaningful, data-driven comparisons and decisions:
“[It’s] about having some mechanism for comparison – otherwise, how do you compare? How do you decide who meets the bare minimum requirements and which one is going to come in at what price for [a particular] type of work?”
From Helen Lowe’s perspective, the ultimate goal of any efforts to change the way in-house teams engage outside lawyers comes down to improving those relationships.
“You can have rates and that’s all well and good and you can have fancy value-adds and volume discounts and all sorts of other lovely things…But what we wanted was a group of firms that actually understood us, so we weren’t giving them a briefing in front of every single engagement and having to have that conversation about our risk appetite and what the approach was from the business and what our tone of voice was or what points we were willing to [concede] on. Now that’s standardised across our panel so there’s already that expectation there and we try to deploy work in a way that means our panel firms have actually had the opportunity to really get under the skin of things for us.”
The challenge of change
All three of our interviewees had encountered at least some internal reservations when creating a panel for the first time or going through a re-panel exercise.
As Heather Torres pointed out, it’s important to bear in mind that stakeholders outside the legal team will also have their own experiences and opinions in terms of which law firms should be on the panel. It’s also necessary to be sensitive to the fact that, in some cases, there will be personal relationships at play. It’s therefore important to bring colleagues on the journey with you and having compelling objective data to hand – e.g. on relative costs for instance – is a crucial tool for doing this.
At easyJet, Helen Lowe also found that – until the most recent re-panelling exercise – only a small handful of panel firms were being used with any regularity, while a number of non-panel firms were still being given work based on historical relationships.
Ben has experienced similar issues during past projects:
“People say, ‘I don’t want to change – we’re happy with them’. But the metrics tell us otherwise. So that’s always the discussion with the GC that that gets tricky. How do you implement any sort of change and drop somebody off a panel when you know they went to law school with somebody?”
Learning opportunities during an RFP process
While the end goal of a creating a panel is to get down to a final group of law firms, the process itself can be useful in uncovering new ideas or starting new conversations internally.
At easyJet, Helen used the process as an opportunity to start exploring alternative service providers:
“Easyjet had never really looked outside of ‘big law’ so there was an opportunity to start to plant some seeds about ALSPs or ‘new law’…and starting to think about some of those more innovative approaches…even if we didn’t manage to successfully get them onto the panel this time, there are people asking questions about it now and they’re starting to ask: “Well, is there a way that we can think about how we could use this differently.”
While running the most recent panel refresh at Sonnedix, Heather’s team included a number of questions about two issues close to their hearts: EDI (Equality, Diversity and Inclusion); and ESG (Environmental, Social and Governance).
She found that – not only was it a key part of their decision-making process – the responses were also a gold mine of ideas and inspiration for approaches and initiatives they could aim to emulate in their own business.
Likewise, Ben also found that – despite his years of experience in the legal profession – responses to RFPs could provide new ideas and inspiration:
“Every so often a firm would present something that we just weren’t familiar with and I’ve been in legal forever. This then helps you trigger thoughts for questions to ask of other firms at future RFPs.”
Beyond panel selection: using RFPs/RFQs for ongoing instructions
While the use of RFPs is perhaps most typically associated with panel selection exercises, the benefits of an efficient and streamlined process for instructing external lawyers on an ongoing basis are just as pronounced. The data this captures is vital for in-house teams looking to take a truly data-driven approach to how they outsource work and manage external spend.
At Easyjet, they use ‘mini-RFPs’ for everything over £20k. For work expected to come in at or around the £20k mark, the current process primarily consists of an email to 2 or 3 firms setting out a brief scope and inviting quotes.
For larger pieces of work (e.g. in excess of £100k) there is a more formal template and accompanying scorecard which focus on what firms can deliver to Easyjet:
“We don’t just want their credentials – we want to know why they are important…We don’t just want to know what tech they’ve got – we want to know why it’s going to make a difference to us. If they’re ‘North-shoring’ or off-shoring something, why is that the best approach, and what value is it going to deliver to us as an organisation?”
Taking this more holistic approach enables Easyjet to allocate work on more than just price.
“We will not always select based on the lowest fee, but we will always select the firm that is going to deliver the greatest value to us as an organisation.”
By contrast, at Sonnedix – which is a fairly prolific acquirer of smaller businesses in its space – the M&A-heavy nature of the legal team’s workload means that price is typically the determining factor:
“In that sense, most of the time it is cost driven. It is how much work can you do for us at the lowest price possible, because we’re trying to be competitive. We’re competing with other people to buy things, so our CEO is like, ‘how cheaply can we do [it]’?”.
Since the principal variables tend to be very similar from one M&A deal to the next, Heather’s team are able to employ a fairly commoditised template for briefing the law firms and requesting quotes on M&A deals.
Controlling costs from the quotation stage
Even where quotes are provided upfront, all interviewees had experience of costs ultimately exceeding the expected quotes. The reasons for such overruns and/or for not challenging them were varied and not always issues with the firms themselves e.g.
Nevertheless, this discussion also highlighted the benefits of getting as much clarity and detail into any upfront agreement on costs, at the quotation stage. This could include things such as:
The role of procurement teams in engaging law firms
While none of our interviewees were of the opinion that the procurement of legal services could/should be wholly outsourced to a procurement team, they all had experience of – or saw the potential for – productive collaboration between legal and procurement when it comes to engaging outside counsel.
The main value-adds of working alongside a procurement team centred around their ability to bring additional rigour and objectivity to the process, asking questions which a legal/legalops team might not otherwise think to ask and helping to hone information and responses down into more structured/metrics-based values that make it easier to compare and contrast firms and their offerings.
The main source of tension between legal/legalops teams and procurement tended to centre on the extent to which cost should be a determining factor. In some instances, it’s a case of needing to take into account the realities of how things work in the legal world e.g. Helen gave the following example:
“If your [law firm’s] rates have been fixed for the last five years, there is only one way that they are going when you re-tender and that sure as hell isn’t down! That’s never good news for a procurement person so that battle around costs can be a really frustrating dimension…”
For Ben, the key was having a dialogue between the legal/legalops team and procurement team to help procurement to understand the landscape which in turns makes it easier for them to support the legal/legalops team with the process of identifying the right questions to ask, the real value being offered and how this can all be honed down into what he called ‘simple maths’.
At Sonnedix, there is no internal procurement team so the RFP process for the re-panel exercise was wholly within the legal/legalops remit. Nevertheless, they put a lot of emphasis on translating law firm responses into numerical data, through the use of a scorecard. This sometimes led to unexpected results e.g. a very popular firm falling below the agreed threshold for inclusion on the panel or a less popular firm outperforming based on the rankings. This sort of data made it easier to take more objective decisions and justify ruling certain firms in/out of the process.
Helen: Don’t be corporate, just be yourselves
Ben: Be concise, be honest. Give direct answers to simple questions.
Heather: Don’t send us a stack of generic marketing material to pick through – tailor your responses and make it easy for us to identify the answers to our questions.
As we continue to develop our RFP and panel management features, we’d love to hear how you are currently working with outside counsel. Do you have any formal processes in place when seeking external quotes? Are you and the law firms you work with using any tools to support collaboration? Let us know in the comments. And if you’d be interested in finding out more about Tabled and/or seeing a demonstration of the platform, please book in a call below. Thanks!