Thoughts about favoring non-incumbents in RFP procedures

The law firms that have represented you for a while have a big edge over other law firms if you conduct a competitive bid that pits them against each other. The incumbent firms know more about your business, your matters, your personnel, your likes and dislikes. In the dark, for the most part, are the non-incumbents, ignorant of the volume of your work, unsure about your management philosophies, unaware of corporate history, behind the eight ball (See my post of Dec. 17, 2007: challenges faced by firms not familiar with you; Feb. 15, 2006: being an incumbent doesn’t guarantee selection; Nov. 14, 2005: different criteria for incumbents than for new firms; Feb. 6, 2007: new firm has ways to reveal chemistry; Jan. 27, 2006: incumbents try harder due to the endowment effect; Dec.16, 2005: complacency as it afflicts incumbent firms; Dec. 14, 2008: low rate of firing entrenched firms; March 31, 2009: RFP doesn’t necessarily mean disaffection with incumbents; April 9, 2009: in 50 competitions, incumbents won half the time.).

To redress these disadvantages of new firms, which I assume you want to do so that you can consider competitive newcomers hungry for your work, you can do some things to favor non-incumbents. Most fundamentally, tell them more and go out of your way to give them data and background information to come up to speed (See my post of Nov. 9, 2006: provide ample data in an RFP.). Perhaps you should host a special dial-in call just for the non-incumbents (See my post of Nov. 23, 2008: control the information free-for-all during the RFP process.). Or you might allow them to do interviews of your lawyers or some onsite due diligence. Toward the end of the competition, when you judge the final proposals, take into allowance the newcomers’ relative disadvantage.

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