An earlier post lays out nine reasons why a general counsel might undertake a competitive bid process to select a law firm (See my post of Oct. 10, 2008: nine justifications to compete work.). Opposing those advantages, a like number of disadvantages of competitions deserve notice. Here are the arguments against competitive bids that I have encountered in my years of consulting, in roughly the order of frequency they are voiced.
(1) It’s a meaningless exercise because “we already know who we will pick” (See my post of Sept. 3, 2006: sham competitions; Oct. 29, 2006: unfounded suspicions by firms of wired selections; and Feb. 15, 2006: the incumbent’s advantage.);
(2) Competitions done well soak up too much time, and money, and attention;
(3) Alienates loyal firms who have served you for years and earned what they view as a partnering relationship – and for little or no gain;
(4) Other methods to reduce outside counsel costs will better achieve our goals;
(5) The process unduly emphasizes cost and metrics over quality and subjective feel;
(6) It upsets inside lawyers who have wielded the shovel side by side for years with external lawyers who have become trusted advisors and friends;
(7) You can’t really judge firms until you use them and you need to try them on small matters first, not a whole chunk of work at a time;
(8) The arrangement may not meet expectations on either side;
(9) It’s hard to deliver bad news to good people (See my post of Jan. 27, 2008: how to tell a firm that it was not chosen.); and
(10) Takes confidence to pull the plug and leap in with a new firm and change accustomed habits (no one actually says this out loud).