Myth 1. “We’ve negotiated excellent panel rates with our law firms. We don’t need to request proposals.”
Wrong. Discounted hourly rates are, at best, a first step. At worst, any benefit is lost with firms increasing the number of hours they bill on your projects.
Without competitive pricing for a clearly defined scope of work, you risk paying too much. At the very least, you have no idea whether or not you are paying too much or not.
Myth 2. “Our panel firms tell us we’ve been given the best rates in the market.”
Hmmm. See Myth 1.
Even if you’ve got great hourly rates, you’ve got an opportunity on any project to secure fixed pricing or reduce agreed rates further. Underutilisation is an expensive problem for law firms. It may be that your RFP lands at a time when your preferred firm is particularly keen to secure your work.
Myth 3. “It’s not always about price.”
We get that.
But sometimes that makes for an easy cop-out. Law firms devote a lot of energy to convincing you that they’re different to their competitors. In fact, the differences between firms are often insignificant.
You’ve gone to the trouble of setting up your panel of law firms. You’ve already decided they have what it takes, otherwise they wouldn’t be on your panel. They’re hungry for your work, often hungrier than you think.
Give them a chance to pitch for your work. They will surprise you.
Myth 4. “I don’t need to send an RFP. I know what the work should cost.”
Well, you may know what work of that type has previously cost you, or can guess on what it might cost based on your experience. What you don’t know is what a panel firm is willing to charge for it on this occasion.
On any given day, there may be a dozen reasons why one firm would be willing to undertake your work for less than what you would expect. Some common ones are:
… The list goes on (and on).
Unless you ask, you do not know. Why waste the chance?
Our PERSUIT pilot found that the price gap between firms for fixed scope work can vary by as much as 600%. The average (excluding outliers like that 600%) between the accepted price and the highest price was 35%.
To test these myths for yourself register your interest in a free PERSUIT trial.