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To bid or not to bid: critically evaluating RFPs.

It is a maxim that not all business opportunities are created equal. How these business opportunities H are evaluated is another story. Particularly vexing is how to evaluate a request for proposal (RFP). For many law firms, the question of how to evaluate an RFP is fraught with competing interests and approaches.

Whatever the approach, the ultimate question is the same: Can our firm win the business? But can you predict a win? The answer is you never can. But you can "estimate" your chance to win and, even more importantly, if you can afford to win. To prepare an excellent RFP response requires a significant investment of time and energy by a number of billing and non-billing professionals (e.g., partners, marketing, accounting, conflicts, word processing and proofreaders). If the chance of a win is too low or the work is not profitable, why respond? These questions are part of the new fundamentals law firm marketing and business development groups must deal with.

To date, the most fact-based approach to evaluate RFPs under the criteria above is to review each and every RFP that comes through the door with a scoring matrix. The matrix is developed by choosing key decision factors with each factor assigned a certain amount of points. The scoring system (IT can develop an automated system) adds points to positive factors and subtracts points for negative factors. The factors and point scores need to provide a strong basis to analyze the law firm's relationship to the company who issued the RFP, how desirable the work is to the firm and if it's financially worth the effort to respond.

Below is a list of positive and negative factors that can be used to develop the matrix. The approach below includes a two-tier analysis. The factors under Tier One are useful in quickly deciding when the best course of action is to decline the opportunity to bid. There are far too many stories of rushing to prepare a proposal while forgetting to check for potential conflicts or assessing if the work is profitable. Although not included below, another important factor is what is typically referred to as a "blind" RFP--an RFP that an attorney has obtained from the Internet or has been received by the attorney as part of a mass email distribution. Absent irrefutable evidence to the contrary, a blind RFP is not worth anyone's time to evaluate past Tier One. This does not mean that if the company is on the attorney's prospect list he should not pursue the relationship, just not through the RFP.

Factors--Tier One

* Is there a conflict? yes = no go

* Will a win put any of our existing client relationships at risk? yes = no go

* Is the RFP issued by a client with whom the firm has a current and serious dispute (overdue payments, lawsuit, etc.)? yes = no go

* Do we have the capabilities and resources to do the work? no = no go

* Are the pricing parameters in the RFP likely to make the work not profitable? yes = no go

Factors--Tier Two

Key positive scoring factors include:

* RFP is from an existing client.

* Client revenues (scoring can be based on amount of revenues within various time periods).

* RFP is from a prospect the law firm has been courting.

* RFP is from a company that has been referred to the law firm by an existing client or strategic partner.

* RFP meets the law firm's strategic objectives.

* RFP responses will be evaluated by an individual or a team that includes an individual(s) who is an advocate of the law firm.

* RFP was sent to law firms who are not strong competitors.

Key negative scoring factors include:

* There is no relationship with the company who issued the RFP.

* RFP was sent via a mass mailing or other random selection.

* Little or no knowledge of competitive landscape.

* There is not enough time to submit a stellar response.

* There is no opportunity to speak to the company about the RFP.

* The incumbents have solid relationships with the company and are responding to the RFP.

For those law firms who have established an RFP policy that includes a formal evaluation component, the scoring matrix may serve as a useful tool to revisit parts of the evaluation process. For those law firms whose goal is to move from a "just do it" approach to a more rigorous system, the road to implementation will involve many more steps before creating the scoring matrix or other evaluation process. In the latter case, the road to change begins with law firm leadership working in partnership with the CMO and his or her designated team/lead to develop an RFP policy that mandates a fact-based review process. The change in approach will likely meet with resistance, perhaps lots of resistance, but it's worth the effort. That said, even the most comprehensive and historically successful RFP evaluation system is no panacea, and it's never rote. After all, each RFP represents the potential for new business not only for an entity, but for individual partners and others. That's what makes it both hard and rewarding work and one of the most important new fundamentals.

Rose Ors is president of ClientSmart Consulting, serving law firms in the business development strategy, consulting and coaching areas. With more than 20 years of experience as a lawyer, president of two legal services companies serving both in-house counsel and law firms, and director of business development for a national law firm, Ors is an expert in the field of legal services client acquisition and retention and partner business development training. She can be reached at rose@clientsmart.net.
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Author:Ors, Rose
Publication:Strategies: The Journal of Legal Marketing
Date:Jan 1, 2014
Words:939
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