Cheaper is not always better, particularly when it comes to hiring a trusted advisor. But price is always a factor in legal hiring decisions, and legal bills can spiral out of control quickly if you don’t get a clear handle on costs at the outset. So, how do you hire the right attorneys for your case at the best possible price?
Many companies are tackling this problem by using a competitive Request for Proposal (RFP) process to choose legal providers. According to BTI Consulting, the percentage of corporate counsel that issue RFPs to law firms jumped from 45% in 2014 to 56% in 2015. The use of RFPs for legal work has now reached a 15-year high. (See,www.bticonsulting.com/themadclientist/2016/1/27/client-rfps-hit-15-year-high)
The RFP process is a good first step to achieving value-based pricing. However, the process loses its power if the firms only provide top-line numbers or rates instead of creating a detailed budget. A detailed budget is critical because all lawyers will arrive at their forecasts differently, so it’s important to understand where the numbers came from before you hire the firm.
To get the most out of your RFP, make sure the firms you are evaluating provide all the information you need to assess the true cost of the matter, including:
Who is staffed to the case and what is each of their roles?
How many interviews/ gigabytes of documents/ depositions/ motions/ court days/ etc. is the firm assuming will be in the case? and
What is the average cost of each task?
This level of granularity will reveal who is pricing the case fairly (as opposed to low-balling the initial number to get business), while average costs-per-task will help you – and your lawyers – control costs when the anticipated scope of the case changes.
In addition to giving clients better visibility into costs, the RFP process should reveal each firms’ value proposition. Thus, RFPs should require team bios, relevant experience, the firm’s preliminary thoughts on strategy, and – of course – an interview. The interview is critical because you should trust your legal team completely when you hire them, and that trust cannot be forged on paper.