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According to the 2024 ACC Law Department Management Benchmarking Report, Legal Departments outsource nearly half (48%) of their work to law firms. Delegating to outside counsel includes everything from “bet the business” work to commoditized projects.
This amount of delegation puts considerable importance on outside counsel selection. The rigor and quality of the law firm selection process impacts Legal and the business in many ways:
- Cost of service
- Cost of resolution
- Quality of service
- Data security and privacy
- In-house attorney and staff time
- Legal’s ability to maximize its value
- Law department reputation
- Corporate brand reputation
- Matter-level and other objectives
At the same time, law departments frequently select outside counsel based on traditional non-RFP methods – a particular in-house counsel’s preference, a relationship developed in a prior job or at law school, the CEO or general counsel’s favorite firm. Using traditional methods limits a law department’s ability to control the impact on the above list., They cannot reasonably be expected to maximize outcomes. RFPs can help ensure attention to these issues and optimize outcomes when selecting counsel.
RFPs to the Rescue: More Than Savings Vehicles
Many law departments that select counsel through RFPs are motivated to reduce spend through reduced hourly rates or Alternative Fee Arrangements (AFAs). Rate reduction or cost avoidance are typical measures of RFP success. These results are important. Tactical RFPs that use a very basic RFP process can improve the ability to manage spend.
In addition, strategic RFPs can support legal operations more broadly and reduce risks associated with outsourcing legal work.
In this series on RFP value, we will elaborate on the RFP process to augment direct financial impact on law department spend. We will discuss leveraging a strategic RFP process to mature law department operations and explain the value to Legal, Procurement, and the business at large.
