The question is, how can a general counsel know what a bedrock cost is to handle a set of services? I have advised previously not to tell firms in an RFP what you spent historically, because that will frame their thinking around the numbers you provide. I thought it a better practice to tell approximately how many hours of lawyer service the historical workload required (See my post of Dec. 5, 2005: use hours of lawyer work, not amounts paid.).
Unfortunately, both dollars and hours may be misleading guides because they may have been swollen with inefficiencies. It should not be a triumph to say, “Our competitive process knocked eight percent off the extrapolated trend of hours or dollars,” since the fundamental number – what would the most efficient firm require today to handle the work competently – is still lost in the mist. Historical data that oozed from inefficient management should not frame competitive pricing and processes for the future.