As the market for legal services becomes more competitive, clients are increasingly choosing law firms based on formal RFPs (Requests for Proposals). But when a law firm replies to an RFP, what are their chances of winning?
Of course the exact answer depends both on the RFP, and on the firm that replies. But, according to Ann Lee Gibson, typical win rates across the legal industry are “very small, probably no larger than 5%.” In other words, the typical RFP elicits about 20 proposals, producing one winner and 19 losers.
“I've often seen this 5% figure when I have worked with law firms over the last eight years to help them improve their competition performances,” she explained. “Usually with a good year or two of consistent effort, firms are able to get their win rates up to 30% - 40%.” To date, consultant Gibson’s advice has helped law firms win more than $435 million in new business.
The win rate of 30%-40% is remarkably close to the ideal win rate I’ve heard for other industries. Sales guru Don Schrello was the first to tell me that I should try to win 1 out of 3 proposals. “Wait a minute,” I said. “Shouldn’t I try to win them all?” “Of course you should always try to win,” he replied. “But if you ultimately win fewer than 1 out of 3, it probably means you are not being selective enough in what you bid, and are bidding RFPs you should have passed on. On the other hand, winning more than 1 out of 3 of your proposals either means you're being too selective in what you do bid (so you could likely grow more quickly by bidding on more RFPs), or are pricing the bids you do make too low, thus leaving money on the table.”
To start getting your win rate up, see Ann Lee Gibson’s article “50 Tips to Help You Win Client Competitions” in Law Practice Management, which can also be downloaded from her Web site.
The best practices Gibson describes start before the competition begins, when you choose which RFPs to bid on. One key is to avoid competitions that are “wired,” that is competitions where the client already knows who will win, but needs to go through the appearances of a competitive process. The trick is to look for signs that they are not serious about the evaluation. For example, before submitting a response you should request an interview to gather background information, and to build relationships. According to Gibson, “Firms that won’t meet with you probably are signaling that the competition is a sham.”
It’s also important to stress the human element in other ways. “Clients will appreciate it when you offer lawyers’ home and mobile phone numbers. Many clients also respond well to invitations to kickoff retreats and face-to-face client satisfaction interviews conducted by the firm’s management or marketing department.”
And remember that “the executive summary is the most important chapter in the proposal” because it’s the section most likely to be read. Think “less is more” throughout, because “when asked which proposals they read first, corporate counsel almost always say, ‘The shortest ones.’”
Finally, Gibson says, “Always debrief the prospective client after the competition is over to learn why the winners won and why the losers lost. More than anything else you can do, debriefs and the information they yield will rapidly guide your firm to improve its competition strategies and tactics.”
As Ann Lee sums up her approach: “It sounds simple, and it is. But, like most ‘overnight successes,’ it requires year after year after year of discipline and hard work.”
To learn more, sign up for Ann Lee Gibson’s Law Journal Newsletter Web Audio Conference “Winning the RFP” tomorrow, Thursday April 27, 2006, at noon Eastern Time.