Published on:

Some data about costs, win rates and topics of Requests for Proposals – and my questions

Sheri Qualters of the National Law Journal, Feb. 25, 2009, summarizes an Altman Weil report, “What’s the Real Cost of Responding to RFPs?” That study pegs the outlay by law firms on RFPs at $35,000 to $65,000 per RFP, “or between 100 to 200 partner hours” (See my post of March 17, 2006: effort set in motion by RFPs; and Feb. 21, 2008: proposal generators.). Does this figure include the cost of non-partners who labor on RFPs?

The report also notes that the success rate for answering RFPs is 30 percent. In my consulting experience, RFPs go to more than three firms, and most of the recipients respond. I am surprised, therefore, that one out of three times the firms are successful. How did the law firms define “success”?

“Worse yet, ‘winning’ typically means being placed on a list of approved counsel with no guarantee of additional work,” the author, Charles Maddock, writes. “Most of the wins produce no income whatsoever, let alone personal contact with the firm.” How can Maddock assert that when one-third feel successful? If the firm is not on a panel, its odds of being retained dropped to nil. Besides, usually there is a presentation so some people from the law firm palaver with the selection team from the law department (See my post of Dec. 21, 2008: beauty contests with 8 references cited.).

Maddock notes later that competitions through the RFP process often lead to no more than an invitation to be on a so-called preferred counsel list, “which is about 50 percent to 60 percent of RFPs.” Why does Maddock fault that? UK law departments like the panel approach, but US departments seem to me to conduct a fair number of RFP processes for groups of matters (See my post of June 18, 2007: law-firm panels with 13 references.).