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RFPs every three years to obtain discounted rates from firms

Exelon’s law department puts law firms in competition for its business “by sending out RFPs every three years.” According to InsideCounsel, Aug. 2007, at 51, firms seeking the utility’s nod answer a questionnaire and “submit to an extensive interview with the law department’s leadership team.” The primary goal of the law department, according to the article, is to choose firms that offer the deepest rate discounts.

Several points deserve emphasis about Exelon’s practices. A three-year time commitment by a law firm is quite lengthy (See my post of April 16, 2007 on GE and a four-year term.). The amount of time that senior lawyers in the department must spend on this process, given the number of areas of law in which they might be selecting firms, is significant (See my post of Aug. 4, 2007 about bifurcated interviews of associates and partners.). Finally, given all this investment of time and resources, could the law department not seek financial terms more effective than mere discounts (See my post of Nov. 26, 2006 and 18 references to rate discounts.)?