Law firms typically list their top four expenses (lowest to highest) as wages, rent, insurance and support services. With regard to support services contracts, most firms continue to sign them with little industry comparison. According to the author, this represents a lost opportunity for savings. He says that an open request for proposal (RFP) process in which a multitude of vendors is invited to participate will yield on average more than 14 percent in savings over engagements in which negotiations involve only the incumbent vendor.
A firm can be pleased with its incumbent vendor and still engage in an open RFP. The Director of Administration for Thompson Coburn LLP recently completed an open RFP process for facility services. The five-year contract signed with Pitney Bowes Management Services in 2006 was set to expire. According to the Director, the firm had a good relationship with Pitney Bowes and was pleased with the services they’d been providing. However, he undertook an analysis of pricing models and service offerings.
It took more than a year to complete, but significant potential efficiencies were discovered in labor, duplicating equipment and impression costs. The firm decided to sign a renewal contract with Pitney Bowes, but it was under more advantageous conditions, both for the short term of the contract period and for future negotiations.
The author outlines an alternative knows as “the closed RFP process,” which also can result in savings.