Sourcing Legal Services in 2021: Updated and Expanded Legal Panel Review Materials.
This article was co-authored by Sarah Barrett-Vane and Steph Hogg and appeared in The Law Society’s monthly magazine on 31 January 2017.
Legal Panel Bids: Hints and Tips – The Big Catch
Legal Panel Bids: Hints and Tips. Tendering is tough. It’s expensive. It’s time-consuming. Everyone involved has an (often different) view on what great service looks like and how much that’s worth. Let’s face it, it’s a downright painful process. And that’s just the client’s perspective.
Large law firms will, of course, be used to the rigours of tendering. Large corporates have had sophisticated (to varying degrees) procurement functions managing their legal expenditure for many years, and the legal firms which advise them tend to have well-resourced, equally sophisticated bid and business development teams to work with them.
But the increasing commoditisation of the legal services sector means smaller firms that may have previously tendered for work once or twice a year are now faced with frequent competitive tendering, and come up against professional procurement teams that know exactly what they want – and how much they’re prepared to pay.
As an ex-corporate procurement professional now advising law firms, I was surprised in 2016 by the speed and extent to which competitive tendering is filtering down to medium-sized firms, which often don’t have the experience or resources to respond to the challenge. One medium-sized firm I know responded to 12 competitive tenders in 2016, compared to only two in 2015!
Some Legal Panel Bids Hints and Tips. Below, I outline the steps law firms can take to give themselves the best possible chance of success in their bids for work.
1. Should you bid?
Given the cost and effort involved in tendering, this is the question that every legal firm needs to answer at the outset of a process. But just how should you decide? Successful tendering centres around two fundamental questions.
1. Do we really want this work?
2. Can we win it with a decent margin?
To answer these two questions, I advise firms to begin with a standard triage process that establishes whether an opportunity is worth pursuing.
The process should involve questions such as the following.
- Do we have the capability to do this work?
- Why have we been asked to bid?
- Do we have an existing relationship with the client and is it something we want to maintain / grow?
- How profitable is this client?
- How easy is the client to work with?
- If we don’t have an existing relationship, why are we being asked to tender?
- Would working for this client enhance our ability to win other attractive work?
- Is this tender for a sector where we want to grow our presence?
- Can we carry out this work with our existing teams in the timescales required (or grow quickly to accommodate it)?
The (honest) answers to these questions should inform whether you decide to bid for a particular panel / matter – if they’re not overwhelmingly positive, then I’d advise a firm to politely decline the offer to participate and concentrate efforts elsewhere.
2. Do the legwork
If you decide that there are enough positives to make responding worth the time and effort involved, you now need to get all the information together to draft your tender response.
It is important to involve all of the stakeholders whose input is required to put together the response. However, pulling together often disparate inputs to form a coherent tender response can be challenging. Some medium-sized law firms have bid teams or business development teams with standard tender response processes, but many don’t: if that’s you, then your marketing / business development team will probably be the de facto lead on a project like this.
The first step is to hold a tender workshop with all the relevant stakeholders.
Tender documents invariably make reference to the client’s core values, strategy and objectives in running the tender, and usually outline some critical success factors, or evaluation criteria, against which the responses will be assessed.
At the workshop, identify key themes that link to a client’s values and strategy (such as innovation, cost management, quality and value-add). With reference to each of these, discuss what you think ‘wow’ would look like for each question, and then identify what it is about your services that is unique and should therefore be mentioned to achieve the best possible score in response to each question.
But what if no critical success factors are stated in the document?
The Buying Legal Council (BLC) is the trade organisation for professionals tasked with the sourcing of legal services and supplier management. In January 2016, it published a report based on interviews with 92 legal procurement and legal operations professionals, aimed at identifying what legal procurement teams are looking for. The top five factors identified were:
- experience with similar matters
- industry experience
- service excellence
- familiarity with the organisation
- value for money.
If the tender documents provided don’t include critical success factors, this list should help you to focus your tender response.
The output from the session should be a plan and an outline tender response, detailing the points to be covered in each section, and who is responsible for drafting them. Your firm’s marketing / business development team can manage the collation of the response, with everyone clear on what they’re drafting, by when, and the key themes to be brought out in each part.
3. Price carefully
Pricing is a key comparator in any tender response. In responding to a pitch, make sure any pricing is competitive based on what you know about the sector and marketplace, and also that it’s sustainable – what may constitute a good margin in year one of a deal may not be so attractive in year three.
In setting your pricing, offer the client choice (such as hourly rates, fixed fees, alternative fee arrangements), and be prepared to have to revisit your commercials – legal procurement professionals love nothing better than to negotiate.
When assessing the ‘value for money’ of a bid, procurement professionals will assess the comparative value-add between firms. According to the BLC survey, preferred value-adds for legal procurement are:
• free hotline / access to experts for quick questions
• free or at-cost secondments
• outside counsel’s participation on internal calls
• conducting pre-matter planning sessions
• seminars and business-level training.
A monetary value can be assigned to these value-adds within your proposal: make sure it’s realistic and based on the fees you’re proposing to the client, but don’t sell yourself short.
4. Polish and submit
In order to finalise your response, you may need to ask clarification questions, but remember to do so in the timeframe specified, and be aware that all participants will see the responses. Incorporate any additional information into your response.
Obviously, you must submit on time, in the requested format, and sticking strictly to any specified word counts / page limits. Make sure your document is well laid out, checked for grammar and spelling, and doesn’t contain any mention of previous clients if you’re reusing content from another bid (you’d be surprised how often it happens).
Once you’ve completed and submitted, keep in touch with the client’s team running the tender and check in at milestone dates to see if they have everything they need, and if things are still progressing as planned – but remember there’s a balance between keen and annoying.
5. Review and perfect
There are also a few general things you can do to make your tendering more successful.
Where possible, time getting to know a client’s procurement team will be time well spent. Understanding what’s important to them in terms of financial pressures, savings targets and value-add may make the difference between an acceptable and a winning bid.
Given the trend towards increased tendering, consider developing some standard content that can form a bid library of commonly asked questions and responses. Material such as industry expertise, team experience and the types of value-add you can offer lend themselves well to this, and will save you time in bidding for future opportunities.
Whether successful or not, hold a post-tender review with the client. This will help identify key areas where you can improve your response next time round, and highlight areas of particular excellence.
The specific challenges of public sector tendering
The points made above by my colleague Steph apply as much to public sector tenders as to private. However, I want to highlight a few specific challenges associated with tendering for public sector – words of support, if you will, as you traverse these somewhat dangerous waters.
The first point to mention (and this applies to private and public sector tenders) is that you may encounter a tendering exercise that is run / assessed by the general counsel / legal team itself, rather than by a procurement team. If so, many of the same points outlined above apply, but bear in mind that you are dealing with lawyers rather than procurement professionals, and so the emphasis of the exercise (and possibly the criteria) may change – some may say for the better.
As many of you will be aware, public sector bodies (PSBs) are subject to the Public Contract Regulations 2015. The old rules applicable to ‘Part B’ services (which included legal) have been replaced with a new ‘light touch’ regime. In reality, though, at least to date, there seems to be little change in the way PSBs are conducting their procurement exercises. The complexity of the process and length of the documents does not seem to have diminished. ‘Light’ may well not mean ‘the opposite of heavy’ after all. Early days perhaps…
The importance of reading the terms and conditions of a particular invitation to tender / request for proposal (RFP) – and obeying each and every rule – cannot be overstated.
PSBs are obliged to advertise above-threshold tender opportunities publicly via The Official Journal of the European Union or a prior information notice. This means that the PSB doesn’t have the luxury of pre-selecting a handful of firms it genuinely wishes to work with when approaching the market. It will probably receive dozens, if not hundreds, of bids for each opportunity. Most of the assessors will be doing that assessment in addition to their day jobs.
All this means that the assessors will be more than keen to eliminate any bidder at the earliest possible opportunity – so any bidder which breaches the rules is unlikely to find a sympathetic ear. Indeed, the EU Treaty Principles, which demand transparency and equal and non-discriminatory treatment for all bidders, prohibit assessors from turning a blind eye to a misdemeanour. Attention to detail matters.
There is a flipside to this, though. It’s not just bidders which are subject to the public procurement rules: PSBs are, too. So you may challenge them if you wish, and many bidders do just this – even lawyers. Who, I wonder, in the Legal Aid Agency / Ministry of Justice will have the task of devising the next foray into (genuine) competitive tendering following the ‘re-think’ after the last attempt in 2015? I predict it will come, and firms planning to continue / expand in that area need to prepare themselves.
A key difference between the public and private sectors is that, in public sector procurement, you may not have the ability to revisit your prices by means of a best and final offer before the final decision is made. Unless the PSB has included such a stage in the process, you may assume that the price stated in your tender will be the only price the PSB sees.
On a similar note, unlike the private sector (which is extremely likely to do this), PSBs may not include an interview stage. This means that your opportunity to impress is limited to your written tender response, plus any additional impression you may have made during any pre-tender bidder events or soft market-testing, and/or any questions you submitted.
I would therefore advise you to participate as much as possible in these opportunities, including asking questions – it gets you noticed. But be wary: do try to avoid questions that will elicit an answer referring you to the relevant page / paragraph in the RFP. Assessors do like a law firm with attention to detail – it’s what is expected of you, after all.
E-tendering portals can be highly frustrating for any firm wanting to impress with fancy graphics / artwork, as each question will doubtless be subject to a strict word count, and additional documents will only be permitted in specified – and likely boring – formats. This isn’t universal, but it is prevalent. If this is the case with the opportunity you’re tendering for, you don’t have graphics or colour to excite, so make sure to use interesting and thought-provoking words and phrases. You have only words, so make them count.
Making a good impression
As I said, many of the points Steph made above apply to all bidding, but I would like to expand on a few points that I think are of particular relevance to public sector tendering.
During the initial tender workshop phase, I urge you to read – and understand – the client’s brief carefully, and elicit as much of their intention as you possibly can. It will be there, somewhere. Key words will materialise and they can help you with your response.
When answering each question, answer it thoroughly, making sure you’ve covered each sub-question / bullet point. Tailor your bid to the PSB’s requirements. How can you impress this particular client and meet its particular requirements? This is where copying and pasting from your last tender can be very dangerous. Assessors will spot this and – given the number of bids on their desk – you do not want to annoy them in any way! Make your tender the one they remember, and for the right reasons! Make it personal. If you are an incumbent, don’t be complacent or lazy. You have a higher burden, arguably, than a bidder with no history.
Demonstrate your experience and your suitability for this contract / award: don’t just ‘state’ it. You are aiming to get your answer to fall into the ‘excellent’ definition in the scoring guide the PSB has provided for you. This is never more so than when the price:quality ratio favours price. I’m assuming your price will be the most competitive you can manage, so the points awarded for that are largely in the lap of the gods (and probably a weirdly complex mathematical formula). You therefore need all the points you can grab on quality.
The key words appearing in today’s legal publications are these: innovate, change, evolve, challenge, shake up, disrupt. Stagnation does not feature. Brexit will influence all of this in some way. Public procurement law / rules / regulations will exist in one form or another regardless of where we end up and when. Legal procurement and legal operations departments are increasingly embedded and getting stronger. Traditional law firms are no longer the only providers able to meet clients’ needs. The market is increasingly competitive, with firms – including new entrants – hungry and willing to fight for these contracts. So, this all begs the question: are you ready?
Legal Panel Bids: Hints and Tips – The Big Catch
By Steph Hogg and Sarah Barrett-Vane
Published 31 January 2017