How to prepare an RFP (request for proposal) for legal services in Canada

Top tips for in-house counsel to maximize the value of RFPs

How to prepare an RFP (request for proposal) for legal services in Canada

Issuing a request for proposal for external legal services is a useful way to consolidate and create panels of law firms, or simply to find the best external counsel partner to assist with a particular matter in a cost-effective way.

An article by Wirewick Holm refers to RFPs as “non-binding invitations for proposals from interested parties.” The purpose of an RFP is to obtain offers which will then be evaluated, the article states.

Richard Stock, managing partner of Catalyst Consulting writes in an article in Canadian Lawyer that RFPs should “seek to reduce panel sizes, prescribe optimal staffing ratios by specialty, and target a reduction from current pricing.”

It is crucial to carefully prepare an RFP to ensure all relevant field are included and presented in the right way, in order to yield the best possible results from law firms. Legal departments need to improve not only how they craft the RFP but also how they determine exactly what they are trying to get out of the process, according to Nancey Watson, president of NL Watson Consulting Inc, a proposal consultant who regularly assists corporate in-house legal departments with RFPs.

“I think that all in-house legal departments would be wise to periodically review their proposal processes to ensure that they implement best practices in order to achieve a win-win outcome,” wrote Watson in an article that outlines pitfalls to avoid when preparing an RFP.

Stock writes that determining the scope of work for purposes of an RFP should be a joint process between procurement and the law department. In an article in Canadian Lawyer, he recommends that an RFP should prescribe “optimal staffing distributions” for categories and portfolios of work.

“Firms should be asked to propose compact and stable teams of senior and junior professionals as well as paralegals to cover the reference period,” writes Stock. 

What to include in an RFP for legal services

  • Guidelines for external counsel: Clarify exactly what you are looking for. Watson recommends including Excel charts to be filled out, indicating what information is required.
  • Pricing: Specify what you are willing to pay for, and anything that will not be included. It is equally important to allow space for the response to explain the rationale behind pricing arrangements.
  • The purpose of the RFP: Make your questions as specific as possible.
  • The urgency of the RFP: Provide a realistic deadline. Avoid imposing an unreasonable deadline for law firms to respond to an RFP, or you may find they don’t respond at all.
  • The team: Request customized bios that are specific to the individual RFP, in preference to generic bios copied from a website.

“To, me the most important part other than pricing is the actual team,” says Watson. “Allow the firm to customize their bio to the particular RFP, and to really drill down on team members’ experience.”

When to use an RFP

  • Panel counsel: Used when a legal department is seeking a panel of law firms to handle all external legal work
  • Specific project: An RFP can be used for a particular matter such as a piece of litigation or an M&A project
  • Speciality area: A legal department may wish to find a law firm to handle certain matters requiring specialty knowledge, such as tax law.

Tips for in-house counsel

Watson notes that many RFPs are poorly written, do not provide the information law firms need to customize their responses, and do not ask the right questions to get the answers they need to make a well-informed decision. RFPs should provide clarity with regard to any alternative fee arrangements, she says.

“The best thing for in-house counsel is to provide law firms with Excel documents or even a Word document indicating how they want the AFA structured for the type of RFP they are sending out. That way there is transparency,” says Watson.

Don’t neglect to notify law firms that they have not been selected, Watson advises. Law firms dedicate considerable time and energy to responding to RFPs.

“If you do it right, the RFP process can deliver tremendous value to the legal department and the company,” writes Sterling Miller, senior counsel at Hilgers Graben PLLC. “All in-house legal departments, wherever located, should consider developing a repeatable RFP process and use it as often as possible for selecting outside counsel (panel, specialty, or by matter).  You’ll most certainly get better pricing and services if done correctly.”

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