How to prepare an RFP (request for proposal) for legal services in Canada

What is an RFP?

A request for proposal (or RFP) is a document released by an entity which calls for bidders for its project, activity, or any undertaking.

RFPs are normally formatted as an announcement, plus a description and requirements of the project and of the perfect bidder (also called vendor, supplier, or contractor) to be chosen for it.

Other details, such as costs, payment, and the project’s timeline, are also included in the RFP to guide potential bidders.

RFPs are used by:

• the government or Crown corporations
• private entities (businesses and companies)
• non-profit organizations

Purposes of RFPs

There are several reasons why entities and organizations use RFPs for their projects:

• filters the best offer from different bidders: when there are many bidders or vendors joining the call, there a vast opportunity for the entity to choose the best offer from among them
• review vendors’ backgrounds: formalizes the process where the proposing entity can review the backgrounds of bidders and vendors before engaging them for the project
• time-saving tool: it saves time for the project proponent when looking for bidders, since proponents can just send the RFP to interested bidders instead of repeating instructions to each bidder
• allows comparison of bidders: especially when the RFP has a clear proposal format for bidders, the project proponent can easily compare bidders to help them choose the best one for the project
• sets the project’s success indicators: both the bidders and the entity proposing the project are clear with the project’s targets and indicators that will guide them both on the project’s implementation until completion

What is an RFP for legal services?

RFPs for legal services are used by in-house counsel or corporate legal departments when looking for the best external law firm to hire for a legal matter.

These RFPs for legal services are also a useful tool for consolidating and creating panels of law firms to help with a particular matter in a cost-effective way.

Others also call it a non-binding invitation for proposals or competitive bidding or sourcing, its aim is to get proposals to be evaluated by the entity posting the RFP.

From the perspective of bidders and vendors, here are the things that should be considered before putting out time and effort over an RSP:

For more articles on what is an RFP for legal services and other thoughts from Canadian leaders in the legal field, check out our Opinion page.

Advantages of using RFPs for legal services

Aside from taking on the expertise of the external firm or lawyer, there are other advantages when using RFPs for legal services. Some of these are:

For better pricing and legal services

“If you do it right, the RFP process can deliver tremendous value to the legal department and the company,” Sterling Miller said. Miller is a senior counsel at Hilgers Graben PLLC.

“All in-house legal departments, wherever located, should consider developing a repeatable RFP process and use it as often as possible for selecting outside counsel (panel, specialty, or by matter).”

“You’ll most certainly get better pricing and services if done correctly,” Miller added.

For complex legal cases or issues

It is possible to hire external practitioners through an RFP when an organization’s in-house counsel or law departments are faced with a legal issue that is unique or complex.

It can also be when the case needs the legal and practical experience of other firms that have been practicing in a specific legal area as that of the issue to be resolved.

For cases that are left unhandled

To unburden legal departments of larger organizations that are already overwhelmed by other work, letting external firms or lawyers in can be a solution.

This is true for organizations or companies whose line of business may involve a lot of legal court proceedings, such as litigation and alternative dispute resolution procedures.

When should an RFP for legal services be used?

In-house counsels are not restricted on when they should use an RFP for legal services, since it’s usually a case-to-case basis.

Here are some guidelines:

• when there’s a defined subject case or legal matter, and the RFP-issuing entity is sure that external firms or lawyers will be hired for this
• when there’s no precise solution, and external firms are invited to propose courses of action for the defined subject case or legal matter
• when more details are needed to address the subject case or legal issue, and different responses from competing firms are an efficient way to check which is a better solution
• when there are strict procurement rules or bidding procedures that the entity follows before third-party or external services can be engaged
• when seeking to reduce panel sizes or target a reduction from the pricing of the currently engaged external firm or lawyer

Other forms of requests other than RFP

RFPs for legal services are not the only way to ask for responses from other firms or lawyers for a case or legal matter.

Here are other forms of requests that can also be used for other purposes:

• Request for Information (RFI): when asking for general information about the proposed courses of action or possible services that external firms or lawyers can provide. This can also be the earliest process before issuing an RFP.
• Request for Quotation (RFQ): When the in-house counsel or legal department has the solution but needs external firms to execute the plan. This request asks for pricing and payment information, and bidders can be chosen only on this basis.

What must be included in an RFP for legal services?

To get the best answers that are responsive to your needs, here are some tips on what to include in an RFP for legal services:

Guidelines for external counsel

Clarify exactly what you’re looking for. You could send them Excel charts to be filled out, saying what information is needed.

Pricing

Specify what you are willing to pay for, and anything that won’t be included. It is equally important to allow space for the response to explain the rationale behind pricing arrangements.

Purpose of the RFP

Make your questions as specific as possible to get the best responses. Related to the purpose are the following details to include in the RFP:

• the scope of work or services to be done, or practice areas to work for
• the evaluation criteria for choosing the successful firm
• grounds for disqualification to bid and rejection of proposals
• the timeline for closing the RFP and duration of the project itself

Urgency of the RFP

Provide a realistic deadline. Avoid imposing an unreasonable deadline for law firms to respond to an RFP, or you may find they don’t respond at all. Ensure that the following dates are clearly set up for the following:

• starting date for accepting proposals
• deadline or closing the accepting phase
• period for evaluating the proposals
• period for withdrawing or amending the sent proposals
• end date of the RFP where a successful firm is chosen

Proposal format

Potential bidders can be guided on the format of the proposal, including instructions on the proposal’s important components. Here, specifics of the responding law firm may be required, such as:

• who are the lawyers working for the project
• who are the staff, paralegals, or articling students
• submission of these people’s CVs may be needed

Error-free software or Excel charts

Using software or attaching Excel spreadsheets can be helpful for your RFP. However, it must be tested before and during the proposal timeline to check that it’s free from glitches or errors.

The team

Request customized bios that are specific to the individual RFP, in preference to generic bios copied from a website.

Other necessary clauses

Include the following clauses, only when necessary:

• confidentiality clause
• conflict of interest
• disclaimers and other waivers

“To me, the most important part other than pricing is the actual team,” said Nancey Watson, president of NL Watson Consulting Inc. “Allow the firm to customize their bio to the particular RFP, and to really drill down on team members’ experience.”

What are tips for in-house counsel when using and writing RFPs?

Outsourcing law firms or lawyers through an RFP proposal is not a straightforward process, especially for those who are doing it for the first time.

Below are some tips when doing an RFP for legal services both for newbies and already engaging in RFPs:

Periodically review one’s RFP format

It’s important that RFPs are carefully prepared to ensure all relevant fields are included and presented in the right way. This will help RFP proponents get the best possible results from responding law firms.

Legal departments need to improve not only how they craft the RFP but also how they determine exactly what they are trying to get out of the process, according to Watson.

“I think that all in-house legal departments would be wise to periodically review their proposal processes to ensure that they implement best practices in order to achieve a win-win outcome,” Watson said.

Crafting RFPs as joint internal efforts

Determining the scope of work for purposes of an RFP should be a joint process between procurement and the law department, Richard Stock wrote, managing partner of Catalyst Consulting.

In an article on scoping legal services through RFPs, he recommended that an RFP prescribe “optimal staffing distributions” for categories and portfolios of work.

“Firms should be asked to propose compact and stable teams of senior and junior professionals as well as paralegals to cover the reference period,” Stock wrote.

Be clear and specific when defining the RFP’s scope

Watson noted that many RFPs are:

• poorly written
• do not provide the information law firms need to customize their responses
• do not ask the right questions to get the answers they need to make a well-informed decision

RFPs should also provide clarity on alternative fee arrangements (AFAs), she said.

“The best thing for in-house counsel is to provide law firms with Excel documents or even a Word document indicating how they want the AFA structured for the type of RFP they are sending out. That way, there is transparency.”

Communicate with all participating law firms

Don’t forget to notify law firms that they have not been selected, Watson advises. Law firms dedicate considerable time and energy to respond to RFPs. This will help foster better relations between the in-house counsels and the responding law firm, which can be useful for future RFPs for legal services.

Aside from being a part of corporate etiquette, this is also to acknowledge firms that have given their time and effort to respond to the RFP.

Watson says that even if debriefs are not permitted (and that information should appear in the RFP) a phone call or at least an email is appreciated as a common courtesy by the bidders that were not selected.

Otherwise, unsuccessful law firms that were not notified may flag these in-house legal departments for their poor practices when posting RFPs.

In the same vein, it’s also important to immediately contact the chosen firm, as mentioned in the RFP’s timeline of project approval. Read this article for some insight on how three in-house counsel chose external lawyers.

Using RFP for legal services to your advantage

RFPs for legal services can be a helpful tool when used effectively. It can identify the best external law firm which can best address the problem faced by the RFP-issuing entity.

In-house counsels are also cautioned on how RFPs should be crafted so that it can yield the top choice for the matter for which it was issued.

Still, RFPs for legal services present a lot of opportunities, not only for the RFP-issuing entity, but also for contracting firms.

Check out and bookmark our Practice Management page for more resources on what is an RFP and other helpful topics.