By James J. Stapleton, Managing Principal of LEAP Legal
Here’s how law firms want you to engage in selecting a new law firm. They want you to:
1) Be exposed to their firm in a variety of ways, from the media, to speaking engagements to visiting their web sites, to learning about their awards, citations and directory presences. In short, they want you to be heavily influenced by passive inputs and personal relationship, and most importantly, develop loyalty to their brand.
2) Network with a small number of law firms, the smaller the better. The optimal number is one – their firm. The fewer firms you consider, the better the odds you will select their firm and the fewer concessions they will need to make in pursuing the relationship. They prefer a personal connection outside of the level playing field of a competitive proposal process.
3) Discuss your needs and their relevant services and needs with them, preferably as part of a working session.
4) Agree to their proposed hourly rates and payment terms.
5) Sign and return their engagement letter with retainer.
Here’s how clients should choose and retain law firms:
1) Create a comprehensive RFP (Request for Proposal) encapsulating your needs and preferences. The RFP will contain your preferred cost structure, a summary of your legal needs, client service expectations and a variety of other elements. In my next post, I will dive deeper into the RFP construction, process and strategies.
2) Research and select a variety of law firms and alternatives to traditional law firms that present an array of cost-effective, yet high quality options. For each discrete service, I recommend considering at least seven alternative sources (which I will describe in a future post).
3) Evaluate each contender in a competitive fashion by developing a methodology that allows competing firms to express themselves consistently. This inherently subjective process should be as objective as possible.
4) Ensure that key attributes assessed are those that in-house counsel believe are most important.
5) Make an empirical decision after careful evaluation of multiple alternatives. Your criteria should include (at a minimum) fit, fees, quality, skills, team, client satisfaction, understanding of business issues, strategic and creative thinking, and depth of understanding of your organization’s culture, management, priorities and industry.
It is important to note that you can end up with the same firm with either approach, but that the latter approach places you in greater control of the selection process, therefore you have greater control over the terms. Basic economics indicates that this process tends to generate a more cost-effective outcome in which you have greater control over the client service process. Does a law firm want to participate in a competitive RFP? No, they would far prefer that you give them your work directly, but they won’t withhold their services if you don’t approach them on bended knee begging them to work with your company.
Read Mr. Stapleton’s earlier post titled “How law firms exert control over the legal vendor selection process” and follow-on post “The RFP for Outside Counsel“.
James J. Stapleton is the Managing Principal of LEAP Legal. Mr. Stapleton spent several decades building large law firms (Fenwick & West and Littler Mendelson) and large accounting firms (PwC, Arthur Andersen, Grant Thornton) before founding LEAP Legal. LEAP (Legal Effectiveness and Pricing) Legal works with clients to reduce legal fees, optimize relationships with their law firms and streamline their internal legal processes. He can be reached at email@example.com or by telephone at 408.204.6656.