Even though the economy has tightened over the past couple of years, is that any reason to try to snap up every bit of a client's work? The short answer is no — in fact, it can be to your detriment.
Times like these, when every dollar is being carefully scrutinized, are exactly when firms need to be taking a long, hard look at how they spend their time and money responding to requests for proposals (RFPs). Legal consultancy Altman Weil found that, in 2008, the cost in the US of responding to each RFP ranged from US$35,000 to US$65,000, depending on the number of partner hours involved. These numbers would be acceptable provided the win rate was good. It wasn't. Roughly 70 per cent of responses to RFPs were rejected. What's worse, “winning” typically meant being placed on a list of approved firms with no guarantee of actually getting the work.
Many law firms consider proposals to be job one in terms of business development. A survey published last December by the Legal Marketing Association (LMA), for example, revealed that 24 per cent of Canadian and US law firms that responded consider proposals their top priority, while 6 per cent rank it as their lowest priority. While it's clear that firms place a great deal of importance on responding to RFPs, what's less clear is whether the same firms are ensuring that work vied for directly aligns with their strengths.
And that's the key point: isn't it smarter to focus attention on what you're really good at and pursue the work you want rather than waste time, money and effort attempting to get work in areas where you have no clear advantage?
The distinguishing factor among firms that have a high win rate for proposals is the ability to step back from the notion that “if the client needs it, we'll do it” and, instead, carefully consider and vie for only the pieces of work that line up with the firm's areas of expertise — and decline work that doesn't.
Do You Really Want That Work?
If the work is not in your wheelhouse, don't pursue it. It's better to decline an RFP than win work for which you have little to no experience. At an LMA conference last fall, in-house lawyers were very clear about their expectations on this point. They said they want firms to respond to strengths only, and to be crystal clear about industry-specific expertise and experience. This includes explaining the types of work the firm does well, along with areas where expertise is minimal.
These GCs said they recognize that no one is good at everything and cautioned that there's no point in trying to win work you know you won't get. (In their own words, “don't try to BS us.”) They explained that in-house lawyers are expert buyers of outside legal services. If a firm has been asked to pitch for work, it can be assured that the client will have done due diligence and will know the firm's strengths.
Mike Killeen, Senior Vice-President & Chief Legal Officer at Davis + Henderson, says he expects a clear demonstration of specific expertise from firms. “Proof and affirmation of true subject matter expertise is critical,” he says. “I look for someone who is a true SME.” Finding an SME (subject matter expert) who has done precisely the kind of work that Killeen needs provides him with a strong level of confidence because it means learning won't happen on his company's dime.
Nancey Watson understands exactly what Killeen is talking about. As a Business Development Specialist at Fraser Milner Casgrain LLP, she relies on the firm's “Go / No Go” process to determine whether the firm truly has strength in the key areas required by a client, including direct industry experience.
On the other hand, Watson says that sometimes responding to a proposal that the firm has no chance of winning is still worth it, because it allows the firm to learn more about a client's needs. “Even if you know you won't win, you still may want to prepare a proposal, if only to be able to debrief with the client.”
Learn to Say “No”
It's common sense that when you stop doing the type of work you do only for the money, you open up capacity to take on work you really want. Not only does this make for more interesting work and greater productivity, it also underscores your reputation for expertise in particular practice areas and industry sectors — the very definition of market differentiation.
In his 2006 article “Strategy Means Saying No,” professional-services consultant David Maister wrote, “Strategy is deciding whose business you are going to turn away.” As Maister goes on to explain, many firms make growth and size a priority rather than differentiation, which results in “a lack of focus and reputation that, while it helps you get more business, may actively work to prevent you getting a reputation for being the place to come for the best business.”
While learning to say no to certain types of work may be daunting, clients will respect your candour. Watson agrees: “To respect a client's time, a letter outlining the firm's strengths may also include references to areas where the firm doesn't have specific expertise the client requires.” In these instances, the firm may provide a referral to practitioners with specific areas of expertise or geographic location.
The Value of Industry Codes
Evidence of subject matter experience is a critical factor for prospective clients. One way of acquiring that evidence is by comparing a prospective client's industry codes against those of your current client base. All businesses have industry codes. They can be found through Industry Canada or from information providers like Equifax or Dun & Bradstreet.
The most commonly used system for codes, the North American Industry Classification System (NAICS), was established in 1997. It's used to identify businesses in Canada, the US and Mexico and has largely replaced the older Standard Industrial Classification (SIC) system.
Mark Karkazis, Director of Marketing at Chicago-based Ungaretti & Harris LLP, says that his firm has benefited greatly from keeping a close eye on industry codes. “This information is business-development gold.” He explains that while you may sense or even know that the firm has experience in certain industries, the value of discovering expertise in a niche sector can make all the difference in how you identify and support yourself in these select markets.
This type of proof along with asking “Do we really want all, some or none of the work?” will help you operate from a position of strength and increase the likelihood of winning differentiating and profitable business — in tough times and good.
Heather Suttie is a legal business development and law marketing consultant. She works with law firms, legal teams and lawyers in all areas of practice and consults to Canada's leading law firms — national, mid-size and boutique. Heather can be reached at (416) 964-9607 or [email protected].
Times like these, when every dollar is being carefully scrutinized, are exactly when firms need to be taking a long, hard look at how they spend their time and money responding to requests for proposals (RFPs). Legal consultancy Altman Weil found that, in 2008, the cost in the US of responding to each RFP ranged from US$35,000 to US$65,000, depending on the number of partner hours involved. These numbers would be acceptable provided the win rate was good. It wasn't. Roughly 70 per cent of responses to RFPs were rejected. What's worse, “winning” typically meant being placed on a list of approved firms with no guarantee of actually getting the work.
Many law firms consider proposals to be job one in terms of business development. A survey published last December by the Legal Marketing Association (LMA), for example, revealed that 24 per cent of Canadian and US law firms that responded consider proposals their top priority, while 6 per cent rank it as their lowest priority. While it's clear that firms place a great deal of importance on responding to RFPs, what's less clear is whether the same firms are ensuring that work vied for directly aligns with their strengths.
And that's the key point: isn't it smarter to focus attention on what you're really good at and pursue the work you want rather than waste time, money and effort attempting to get work in areas where you have no clear advantage?
The distinguishing factor among firms that have a high win rate for proposals is the ability to step back from the notion that “if the client needs it, we'll do it” and, instead, carefully consider and vie for only the pieces of work that line up with the firm's areas of expertise — and decline work that doesn't.
Do You Really Want That Work?
If the work is not in your wheelhouse, don't pursue it. It's better to decline an RFP than win work for which you have little to no experience. At an LMA conference last fall, in-house lawyers were very clear about their expectations on this point. They said they want firms to respond to strengths only, and to be crystal clear about industry-specific expertise and experience. This includes explaining the types of work the firm does well, along with areas where expertise is minimal.
These GCs said they recognize that no one is good at everything and cautioned that there's no point in trying to win work you know you won't get. (In their own words, “don't try to BS us.”) They explained that in-house lawyers are expert buyers of outside legal services. If a firm has been asked to pitch for work, it can be assured that the client will have done due diligence and will know the firm's strengths.
Mike Killeen, Senior Vice-President & Chief Legal Officer at Davis + Henderson, says he expects a clear demonstration of specific expertise from firms. “Proof and affirmation of true subject matter expertise is critical,” he says. “I look for someone who is a true SME.” Finding an SME (subject matter expert) who has done precisely the kind of work that Killeen needs provides him with a strong level of confidence because it means learning won't happen on his company's dime.
Nancey Watson understands exactly what Killeen is talking about. As a Business Development Specialist at Fraser Milner Casgrain LLP, she relies on the firm's “Go / No Go” process to determine whether the firm truly has strength in the key areas required by a client, including direct industry experience.
On the other hand, Watson says that sometimes responding to a proposal that the firm has no chance of winning is still worth it, because it allows the firm to learn more about a client's needs. “Even if you know you won't win, you still may want to prepare a proposal, if only to be able to debrief with the client.”
Learn to Say “No”
It's common sense that when you stop doing the type of work you do only for the money, you open up capacity to take on work you really want. Not only does this make for more interesting work and greater productivity, it also underscores your reputation for expertise in particular practice areas and industry sectors — the very definition of market differentiation.
In his 2006 article “Strategy Means Saying No,” professional-services consultant David Maister wrote, “Strategy is deciding whose business you are going to turn away.” As Maister goes on to explain, many firms make growth and size a priority rather than differentiation, which results in “a lack of focus and reputation that, while it helps you get more business, may actively work to prevent you getting a reputation for being the place to come for the best business.”
While learning to say no to certain types of work may be daunting, clients will respect your candour. Watson agrees: “To respect a client's time, a letter outlining the firm's strengths may also include references to areas where the firm doesn't have specific expertise the client requires.” In these instances, the firm may provide a referral to practitioners with specific areas of expertise or geographic location.
The Value of Industry Codes
Evidence of subject matter experience is a critical factor for prospective clients. One way of acquiring that evidence is by comparing a prospective client's industry codes against those of your current client base. All businesses have industry codes. They can be found through Industry Canada or from information providers like Equifax or Dun & Bradstreet.
The most commonly used system for codes, the North American Industry Classification System (NAICS), was established in 1997. It's used to identify businesses in Canada, the US and Mexico and has largely replaced the older Standard Industrial Classification (SIC) system.
Mark Karkazis, Director of Marketing at Chicago-based Ungaretti & Harris LLP, says that his firm has benefited greatly from keeping a close eye on industry codes. “This information is business-development gold.” He explains that while you may sense or even know that the firm has experience in certain industries, the value of discovering expertise in a niche sector can make all the difference in how you identify and support yourself in these select markets.
This type of proof along with asking “Do we really want all, some or none of the work?” will help you operate from a position of strength and increase the likelihood of winning differentiating and profitable business — in tough times and good.
Heather Suttie is a legal business development and law marketing consultant. She works with law firms, legal teams and lawyers in all areas of practice and consults to Canada's leading law firms — national, mid-size and boutique. Heather can be reached at (416) 964-9607 or [email protected].
