Recent Trends in Legal Services New Business Competitions Slide 1

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Recent Trends in Legal Services New Business Competitions

Presentation by Ann Lee Gibson, Ph.D.By Invitation of LexisNexis Martindale-Hubbell At Simmons & SimmonsLondonJune 7, 2007

Recent Trends in Legal Services New Business Competitions Slide 2

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Recent Trends on the Client Side

EN

HA

NC

ED

PR

OD

UC

TIV

ITY

STRATEGIC PARTNERSHIP

HOURLY RATE REDUCTIONS

LAW FIRM CONVERGENCE

APPLIED TECHNOLOGY

WORK PROCESS REENGINEERING

PERFORMANCE MEASUREMENTS

VALUE-BASED BILLING

RISK/REWARD SHARING

Source: A New Era—The DuPont Legal Model, page 17

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More RFPs issued lately

1. In the last 2 years, most Am Law firms have received 2 to 3 times more RFPs than before.

2. RFPs are being issued by banks, manufacturers, pharmas, telecoms, investment funds, etc.

3. Clients now start with a short list of firms.

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RFPs expensive for clients too

1. A few bad consultants are out there advising companies – creating RFQs (not RFPs) that don’t distinguish among firms and too-long, onerous processes.

2. Some companies are fascinated with really bad Excel worksheets as RFP response templates.

3. Recent RFP horror stories – consultants fired and rehired, RFPs with hundreds of questions, no interviews conducted, winning firms fired months after being hired, etc.

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Clients want …

1. Lower legal costs

2. Great firms, not just hot lawyers

3. Legal knowledge systems

4. Improved legal processes

5. Lawyer diversity

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Recent Trends on the Law Firm Side

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Entrepreneurs still distinguish themselves

1. Those with inside knowledge have a big advantage.

2. Savvy solutions (not just qualifications) can beat incumbents.

3. Still boils down to sales ability – however that translates well to the client.

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Firms investing in tactical competitions resources

1. Proposal writers, editors, project managers

2. Researchers and competitive intelligence analysts

3. More business development managers

4. Expertise and qualifications databases

5. Proposal templates and boilerplate

6. Proposal and document automation software

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Firms starting to get more systematic with competitions1. Is this RFP worth the effort?

2. If we do decide to compete, what should we do first, second, third … eighteenth?

3. What role must firm management play in determining pricing decisions, business conflict assessments, staffing?

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Firms still not strategic enough

1. How does this RFP (and this client and this type of work) align with our business plan?

2. What is the firm’s appetite for managing its business plans?

3. Who in the firm is answering the hard questions:

Where is the money?

Who’s got the most interesting work?

What are clients paying the most money for?

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Pricing still hard to talk about

1. Most firms discount fees, even those that deny it.

2. Hourly rates are still rising – many Am Law firms’ top partners’ hourly rates pushing $1,000 / hour.

3. Clients still lobby for alternative pricing, but most accept discounted hourly rates and volume discounts.

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What firms are doing (a little) better

1. Research and competitive intelligence – everybody’s doing research, and some firms are actually developing actionable intel.

2. Interviews – create two-way conversations about this client’s issues.

3. Proposals – offer solutions and legal approaches responsive to this client’s challenges.

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What firms still need to (greatly) improve

1. Don’t wait for RFPs – go pitch your best clients now.

2. Decide if RFP is worth the effort.

3. Interview prospective client to learn vital intel before they compete.

4. Use RFP opportunities to pitch higher value work.

5. Debrief all competitions, win or lose.

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