At one time, only the public sector issued requests for proposal (RFPs) for legal services. Now, the financial services sector, publicly traded companies, and not-for-profit institutions are all issuing RFPs for legal work. In my last column, I talked about debriefing after responding to RFPs, whether you win or lose. There’s a lot to be learned from both successful and unsuccessful proposals.
Another essential piece of record-keeping for proposals is finding out whether you won or lost. This is akin to closing a file properly after a deal or a case. Seems like a keen grasp of the obvious? You may be surprised to know that law firms with an up-to-date, complete, accurate record of their wins and losses on proposal are very much in the minority.
There are many reasons for this. If proposals in general fall under no one’s portfolio and are managed separately by each practice area in the firm, no one may ever have asked how many proposals the firm wins or loses. Even if your firm has a Marketing Department that has charge of proposals and makes valiant attempts to record wins and losses, they may not get the information from the lawyers. Why not? Again, there are several reasons:
- Because the lawyers haven’t followed up with the client. RFPs don’t actually say, like job ads, “Only successful candidates will be contacted”, but fewer clients these days are sending rejection letters—or any acknowledgment of receipt. You have to follow up with them if you want to find out for sure that you didn’t get the work.
- Because the client didn’t hire anyone. I’m still awaiting a decision from a very high profile public sector body that issued an RFP a year ago. In some cases, the client never intended to hire anyone; they just wanted to shake up a complacent incumbent.
- Because the lawyer doesn’t want anyone else in the firm to know that the firm’s proposal didn’t win. I cringe whenever I hear the words, “Oh don’t worry, this is just a formality, they have to put the work out to tender, they’re going to keep us, it’s OK.” If an existing client issues an RFP, that’s a cue to take extra care with your proposal.
Let’s say your firm is winning only about 20% of the work for which it submits proposals. Is the reason for this dismal result to be found in your proposals, or in your firm’s choice of work on which to bid? I’ll deal with the bid/no bid decision in another column, but a check of proposal weighting criteria should give you a clear insight into the client’s priorities. I say ‘should’ because such criteria are sometimes vague, sometimes not really applicable to legal services—and sometimes respondents don’t read them.
Weighting criteria should tell you which of the following is most important to the client.
- Price. Can you make an acceptable bid that still allows you to do the work profitably?
- Level of expertise. Can you cite enough representative work in the field to make your firm stand out against the competition?
- Full service. Can you field a competitive proposal team in all areas?
- Timing. Can you effectively staff a project to complete it within the client’s timeline?
If the criteria are vague, don’t hesitate to ask for clarification. I’m always amazed by how few questions law firms ask when they’re about to bid on work. There seems to be a reluctance to reveal that you don’t know something. This is sometimes provoked by the rules of the competition, where answers to questions will be circulated to all competing proponents. What will do you more good—guessing at clients’ intentions or having their intentions publicly clarified? I advocate as much personal contact ahead of time as the rules will allow. Go and see the client if that’s permitted. If not, and questions must be sent through a procurement office, ensure that your question is understandable to someone who is not a lawyer.
What percentage of wins is acceptable? In a very competitive field, a 50% win rate might be very respectable. In areas where your firm should dominate, a 50% win rate should cause firm management to question what’s going on. Compare win/loss ratios across practice areas: if your firm averages 35% wins overall, but your Real Estate Group is winning 75% of the work it bids on, where is the weakness? It might be strategically more advisable to respond to fewer RFPs in an area where your win rate is only 15%, or perhaps that group should be looking for different RFPs where they have more chance of winning.
So are proposals worth the effort? At the risk of sounding like a lawyer, it depends. In certain practice areas like Construction Law or Municipal Law, you don’t have much choice. In areas like Corporate Finance, you probably wonder what all the fuss is about.
On the plus side, work done to complete proposals is often valuable to other marketing efforts. Many lawyers’ profiles and lists of representative work are kept up to date solely because they participate in proposals. For regional or smaller firms that can compete on price, RFPs are a chance to compete for work from a marquee client that will open other doors for them. Sometimes it’s worth responding to an RFP to put your name in front of a client so that you get on their list for next time. You might submit a proposal for the experience, since each proposal completed is fodder for the next.
For marketing staff, working on proposals provides valuable insights into the firm’s areas of expertise. Also, proposals enable marketing departments to make a direct contribution to business development.
But no one in their right mind spends the time that proposals take just because the information might come in handy for the general marketing effort. That’s why it’s worthwhile to review your wins and losses. Proposals are a big investment—make sure you’re getting a worthwhile return.