Tendering is tough. It’s expensive. It’s time consuming. Everyone involved has an (often different) view on what great service looks like and how much that’s worth. Let’s face it, it’s a downright painful process. And that’s just the client’s perspective.
Large law firms will, of course, be used to the rigours of tendering. Large corporates have had sophisticated (in varying degrees) procurement functions managing their legal expenditure for many years, and the legal firms which advise them tend to have well resourced, equally sophisticated bid and business development teams to work with them.
But the increasing commoditisation of the legal services sector means smaller firms that may have previously tendered for work once or twice a year are now faced with frequent competitive tendering, and come up against professional procurement teams that know exactly what they want – and how much they’re prepared to pay.
As an ex-corporate procurement professional now advising law firms, I have been surprised this year by the speed and extent to which competitive tendering is filtering down to medium-sized firms, which often don’t have the experience or resources to respond to the challenge. One medium-sized firm I know of submitted 12 significant tender responses in 2016, having done only two competitive pitches in 2015!
Below, I outline the steps law firms can take to give themselves the best possible chance of success in their bids for work.
- Should you bid?
Given the cost and effort involved in tendering, this is the question that every legal firm needs to answer at the outset of a process. But just how should you decide? Successful tendering centres around two fundamental questions:
- Do we really want this work?
- Can we win it with a decent margin?
Practically, to answer these two questions, I advise firms to begin with a standard triage process that establishes whether an opportunity is worth pursuing.
The process should involve questions such as the following:
- Do we have the capability to do this work?
- Why have we been asked to bid?
- Do we have an existing relationship with the client and is it something we want to maintain / grow?
- How profitable is this client?
- How easy is the client to work with?
- If we don’t have an existing relationship, why are we being asked to tender?
- Would working for this client enhance our ability to win other attractive work?
- Is this tender for a sector where we want to grow our presence?
- Can we carry out this work with our existing teams in the timescales required (or grow quickly to accommodate it)?
The (honest) answers to these questions should inform whether you decide to bid for a particular panel / matter – if they’re not overwhelmingly positive, then I’d advise a firm to politely decline the offer to participate and concentrate efforts elsewhere…. READ MORE