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When we work intensively with firms on pricing, a common grizzle is the firms’ frustration with what they characterise as the lack of sophistication with which the ‘procurement’ exercise is run. Non-lawyers often approach the procurement of even sophisticated...

Lack of procurement sophistication

When we work intensively with law firms on pricing, a common grizzle is the firms' frustration with what they characterise as the lack of sophistication with which the 'procurement' exercise is run.

Non-lawyers often approach the procurement of even sophisticated legal work with the same mindset they apply when shopping around for stationery supplies.

If the person running the procurement exercise is a GC or other in-house lawyer who was originally in private practice, they will often replicate the banal processes that were inflicted upon them back in the day.

The firms' frustration is compounded when it has in fact made considerable progress towards a more sophisticated, bespoke, client-focused approach to pricing but the procurement construct precludes an opportunity to showcase what they can do.

Have you got anything else?

Some RFPs will ask for “…anything else you think we may be interested in..." but there can be a sense that this is often a throw-away line and all they really want are your lowest headline hourly rates. One of the most asinine examples I have ever seen, didn't even ask what the hourly rates were. All they asked was what percentage discount would be provided. Yes, I am afraid that is what some firms have to try to deal with.

In far too many instances, formal bid and tender process responses are constrained by word limits, irrelevant questions, meaningless measures and procurement's lack of imagination.

When it doesn't include an invitation for other ideas, you are stuck with the format. Worse, some say just the opposite – depart from this form at your peril!

So, how can you get a jump on your competitors and not only win, or retain work with a major client, but also end up with a far bigger share than you would otherwise?

I'll know it when I see it...

As Steve Jobs once said, “…A lot of times, people don't know what they want until you show it to them". Many buyers of professional services have unspoken or unrecognised needs that you can fulfil or problems you can solve and when it comes to pricing, don't wait to be asked.

Have you considered getting together a compliant bid but simultaneously submitting a separate second proposal with the 'good stuff'; something that will genuinely present your client, or prospective client, with something to think about?

Two bites of the cherry...

I have never seen an RFP stipulate that only one submission will be accepted from each firm. Maybe it's implied? Maybe no-one has ever turned their mind to it? Who cares? Absent an overt prohibition, just do it. Certainly don't ask for permission. If you send it they are going to look at it whether they wanted it or not. If you ask permission to do so, they might say no or they may feel they need to notify all other tenderers that they can put in more than one proposal.

Particularly for those who don't request “alternative" or “non-compliant" responses as part of their tender process, take the initiative and present something as simple as a two-page document outlining your “something extra". You can get to serious pricing and implementation detail during the negotiation phase.

Even if it goes no further, at the very least it demonstrates you've sincerely thought about what more you can offer that is in the client's best interest. It may even position you as the favourite.

But wait, there's more...

The “something extra" might involve greater pricing and payment choice, reducing costs, improving efficiencies or adding more value for the client, such as:

• Volume discounts that kick in above the current spend level
• Training and in-house seminars
• On-line access to some templates and 'low value' documentation
• Secondments and reverse secondments
• Bundling and unbundling
• Versioning
• Developing new software to support the client
• Teaching the client internal processes at their end that will reduce the cost of using you
• Greater price risk sharing around fees for contentious and non-contentious work
• Payment options
• Service level agreements
• Hot-line/help desk
• Project management

Of course, these suggestions rely on you providing a complete and compliant tender and also having the wherewithal, client insight, creativity and pricing sophistication to articulate some compelling alternatives.

Above all, don't allow a prescriptive, unimaginative and simplistic procurement paradigm stifle your opportunity to showcase what you can provide.

The inspiration for this blog post came from an article by Amy Burton-Bradley, a partner at Julian Midwinter & Associates. You can view Amy's article here. My thanks to Amy.

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