Vendor Management, Part 1: Evaluating Vendor Requests for Proposals (RFPs) (By Cash Butler)
One of the more challenging and time consuming processes for law firms and corporate legal departments is to compare litigation services vendor proposals and work bids. No two bids or proposals are often ever directly comparable to one another, so review becomes an inefficient, tedious process. But there are steps your firm can take to add clarity and transparency to the RFP process.
1. Develop a Standard RFP. Arguably, the most important step in setting up a process to efficiently evaluate RFPs is to develop a standard RFP for your firm, or to develop a list of standard questions that can be compiled into a RFP depending on the service being sought. Simply asking for or relying upon vendors’ own proposal formats leads to inefficiencies in the review process – different vendors use different terminology and different units for pricing making it difficult, if not impossible, to compare proposals to one another. By having a standard RFP, vendors can provide a responsive proposal that allows your firm to clearly compare one bid to another
In developing your firm’s own standard RFP format, you should be cognizant to use standards and terminology that are understandable across the industry. In addition, your standard RFP should include terms and questions that are important to your firm. Of course, if your firm has a procurement policy, you should also make sure that your RFP is compliant.
“Brevity is the soul of wit” – keep your RFPs short. Just as a short RFP is more efficient for your firm to review, so it is more efficient for a vendor to complete.
You can create a clear, efficient, and transparent review process by compiling a manageable database of responses to your RFP – know which vendors have responded, and compare vendors’ responses to individual RFP questions.
2. Determine Service Offering & Pricing. When reviewing vendors’ bids or proposals, it is important to determine what services are being offered, and at what price. You, the buyer, need to drive the bidding process – make sure that the bids and proposals include all of the line items that will be part of the overall job scope. As an example, for hosted review you should ensure that you understand ingestion through export at case end. Review bids to find hidden costs, such as data importing/exporting fees, travel costs, open ended hourly charges, etc. The goal is to have fully transparent bids, so that when you select a proposal or bid and the bill comes in, it is the price you thought you were going to pay when you selected the proposal or bid.
3. Set Up a Sample Job Scope. Lastly, your RFP should include a sample or mock job scope. Listing each of the job types (i.e., collection, processing, hosting, production) and the line items associated with each step is critical to arriving at a comparable, accurate service offering and price. The mock job scope should include all of the possible line item costs your job might incur.
One of the goals in setting up mock job scopes is to limit open-ended pricing, which can arise when services are billed at some sort of temporal rate (i.e., hourly or monthly rates). Having a mock job scope will allow you and the vendors to understand how much a line item will cost for the entire project. You should be able to scope work and come up with an overall price for your work.
As you review proposals, remember that the lowest price is not necessarily the best price. You should be looking for value and quality – compare a vendor’s price with their capabilities, capacity, and experience. To better ensure that you are selecting a vendor that provides the best value, you should seek at least three or four proposals or bids for you work from vetted service providers.
Cash Butler is a 14-year industry veteran that has built and reviewed hundreds of RFPs in his career. He is the founder and CEO of ClariLegal. ClariLegal is a vendor management platform that focuses on the procurement and management of eDiscovery services. For more information contact us at www.clarilegal.com.