Pricing & Procurement: What I Learned About RFP SoftwareAs a proposal consultant I must admit that I don’t always love using Request for Proposal (RFP) software when responding to a bid. I have found in the past that the software often had glitches and was not at all user-friendly.

However, at the outset of this article I’d like to clarify that I am a great supporter of technology. During preparation for my workshop on RFP Best Practices for in-house counsel, I researched many software products and found that I needed to rethink my dislike for using some of these systems.

I discovered that they provide surprising advantages to both legal departments and law firms. Others agreed. “One of the key things we’ve learned from in-house teams is that for any software to be successful it has to be so easy to use that anyone can do it,” says Christopher Thurn, founder of Alacrity Law. “For any change program to deliver results, it has to be widely adopted and consistently applied.”

Software vendors that specialize in legal services RFP software provide the capability to store questions by practice area as well as by some specialized categories such as geography, matter specialization, and pricing scenarios. I also created a list of best practices questions by industry and practice area that should be included in RFPs, developing these into my workshop. This experience comes because I have responded to a lot of poorly created RFPs.

I researched many software products and found that I needed to rethink my dislike for using some of these systems. I discovered that they provide surprising advantages to both legal departments and law firms.

Systems purchased by in-house legal departments to develop RFPs are similar to systems used by law firms to create their responses to RFPs. The software walks you through a best practice process so that important steps are not overlooked. This is a great feature particularly if you are new to issuing bids.

Each vendor offers some similarities in their package, but I noticed that each provider also offered something unique. Some systems even offer carefully researched information on top law firms by industry and practice area that can be selected for bids.

“Previously, a legal department’s only option was to use an RFP platform that was created to buy, for example, office supplies. Now in-house lawyers can benefit from a platform designed for lawyers, by lawyers for the express purpose of running RFPs to hire outside counsel,” says Kathy Heafey, president of BanyanRFP. “Legal matters don’t fit a standard purchasing template. By drafting smart RFPs for lawyers, we ensure actionable results on the backend of each process.”

Leveling the Playing Field

While speaking with several providers, I discovered that one advantage of using an RFP system is that it levels the playing field. No matter how objective reviewers are when appraising proposals by following their selection criteria (providing they use any), there is always the human effect present. It is very difficult to be completely objective when rating a favorite law firm, whereas the software rates the responses and delivers the scores uncensored, to the selection team.

“RFP software solutions can play an important role in delivering on the value and initiatives identified through the panel appointment process with use in the day-to-day function of the legal team,” explains Sacha Kirk, co-founder & CMO at Lawcadia. “For example, some legal teams highly value the use RFPs for individual matters or phases of matters, and then being able to manage matter budgets and scope changes.”

When vendors demonstrated their systems to me, I discovered that the best feature of all is the ability to track fees and alternative fee arrangements (AFAs) to help legal departments make an objective decision as to the best law firm pricing for a particular matter.

In many cases, the graphics were amazing and can be provided at a cumulative level or at a detailed level. For example, one provider showed me graphs for each response by firm in several formats —bar charts, line graphs, and pivot tables. The responses to the fee section were very enlightening as they compared skills with hourly fees and AFAs providing an objective comparison by law firm. In addition, the information is saved in a database and can be applied against fees historically.

Clearly, there are strong advantages to this kind of analysis over the long term on a matter-by-matter basis. “Sourcing technology has been around for ages, so the ability to issue and respond to an RFP is nothing novel,” says Omar Sweiss, CEO of JusticeBid. “It’s more about how legal-specific sourcing technology can do it effectively; and, at the same time, allow for analysis at such a granular level that customers get closer to the Holy Grail of matter predictability.”

To put law firms at ease using this new technology, in-house legal departments and legal procurement professionals need to thoroughly test both the software and spreadsheets. They also need to present it in a good light and be available to walk the bidders though the process, giving firms plenty of time to practice using the system and ask questions before it is time to upload their proposal.

There is little doubt that the use of RFP software is growing by leaps and bounds as law firms and their clients see a great need for it in the marketplace. Both in-house legal departments and law firms benefit from this kind of program because it provides an unbiased analysis of proposals that gets better over time because of the artificial intelligence-driven fee tracking capability.

And as RFP software demonstrates: Doing your homework can pay big dividends.

My original article was posted on Reuter’s Legal Executive Institute blog.