The Most Important Factors to Clients in Selecting Outside Counsel

The most important factors to clients in selecting outside counsel on a per matter basis

What do clients care about most when selecting a firm to handle a specific matter? What factors and categories do they consider and, crucially, how important is each one? 

Is it all about relationships — “Oh I use [INSERT LAW FIRM] because they’ve done so much work for us in the past, they know our company, they know our business…” 

Or is it all about price?

Maybe it’s a bit more nuanced than you think.

This is what firms want to know — it's also what clients want to know. I've been asked multiple times from clients: What are their peers basing their decisions on? What’s in their scorecards?

With dozens of enterprise legal teams now sourcing outside counsel using PERSUIT, we’ve anonymized, normalized and aggregated scorecard information to analyze the data from over 8,000 “processes” run over the years.

Here’s what that data tells us.

How do scorecards work on PERSUIT?

First, it helps to understand how the scorecard process works on PERSUIT.

PERSUIT customers typically do not just individually instruct a firm and give work to outside counsel without following some best practices in how they spend the company's money. 

Instead, they run what is commonly referred to as a Request for Proposals (RFP) process [there’s a bunch of other stuff they do on PERSUIT — like panels, and rate negotiations — but I’m focusing on the RFPs right now].

Here’s what part of that process looks like:

  1. Define the scope of work and the desired outcome(s) for your project or matter
  2. Invite multiple, highly qualified firms to submit proposals which may include details about their strategy, experience, pricing, pricing structure, teams and more.
  3. Create a scorecard to more uniformly and fairly rank (or score) the proposals. This includes:
    1. Defining the categories and subcategories that you will score (i.e. diversity, price, strategy, etc.)
    2. Setting the relative weight (importance) for each category (e.g. Innovative Pricing Structure is 30%, Diversity is 30%, Price is 40%, etc.)

Why is scoring data so mysterious? 

Naturally, those submitting the proposals want to know what factors they’re being measured on and how heavily each factor is weighted. 

It’s not always the same and can vary by matter type, client, client industry etc. For one matter, the diversity makeup of the team might matter more. For another matter it's the firm's experience with the judge that is most crucial. At other times, it might be all about price

Additionally, some organizations have business rules mandating certain categories and associated weights – e.g. an ESG or Carbon related category of 10% – and then the rest of the scorecard is up to the matter or project owner to fill in.

Rarely is any of this shared in advance, and for good reason. 

Knowing the scorecard details in advance might, consciously or not, affect how a firm crafts its proposal. 

As a result, you may get high-level information about what’s important but generally not the weightings or specific subcategories.

Luckily we’ve got the next best thing.

What 8,000 projects on PERSUIT reveal about scorecard trends

I’m happy to share this anonymized, normalized and aggregated scorecard information from PERSUIT, based on over 8,000 ‘processes’ run by over 70 companies over the years.

Here are a few of the most surprising (and also unsurprising) things I learned.

➡️ 4 parent categories stand out: Price, Expertise, Diversity and Strategy. Honorable mentions: Customer Service, Value Added Services, Acceptance of Outside Counsel Guidelines.

➡️ Out of those 4 parent categories, Strategy is used the least of the four. 🤔

➡️ Price is still what matters most, most of the time, BUT Pricing Structure carries almost as much weight as Pricing Competitiveness.

➡️ For all of the most common Expertise subcategories – which include Team Proposed, Experience w/Judge, Experience w/Industry, Experience w/Opposing Counsel, Experience w/Business or Product(s) — Expertise in Venue is most often weighted the highest.

➡️ Perhaps most surprising, Experience w/Business or Product or Industry are weighted the lowest of the Expertise subcategories.

Thousands of RFPs have been run on the PERSUIT platform, creating a large data set that shows what you can expect on a scorecard, on average.

Click through the below slides to see further analysis of scorecard data on PERSUIT:

Jordan Weinstein