Low numbers of responses to the many RFPs issued in 2006, and a reason

The 2006 ACC/Serengeti Managing Outside Counsel Survey compiles data from hundreds of ACC member law departments. More information and survey results are available from Rob Thomas, the report’s author.

As the latest report is summarized in ACC Docket, Vol. 25, May 2007 at 12, “about 25% of in-house counsel … issued at least one RFP to law firms during the past year.” In light of how many members of ACC are small law departments with modest external spending, that a quarter of the respondents sent out one or more RFPs seems impressive.

But the report takes a contrary perspective: “Comparing the total number of bid requests to the total number of law firms, there were on average fewer than three responses for every bid request issued.” By the way, in the two years since this metric was first reported (See my post of April 5, 2005 on the responses to this question in 2004), the average has increased. The low number of responses, speculates the report, may be “a reason why competitive bids are not more common.”

Hold on.

If a law department invites two or three firms to propose on a single matter, that small number may be fully as many as are needed. Single-matter competitions being probably more common, quite reasonably only a few firms will be invited to compete and perhaps fewer will respond. Hence the low number of responses; hence, competitive bids by means of RFPs stand as a useful tool for many law departments.