As a senior in-house lawyer, you’ll probably find yourself responsible for setting up and managing a panel of external law firms.
That process begins with the preparation of a comprehensive request for proposal (RFP).
Your panel RFP – the 10 essentials
The 10 key components to include in your RFP for a panel are:
1. The introduction to the RFP
Start the document by setting out what your organisation does, its stature in its sector and why you’re establishing the panel. Provide an outline of the types of legal support you’ll be looking for from panel members and, if the panel is to be time-limited, how long you’ll need it for.
2. Background to your organisation
Use this section to give more detail about your organisation. Describe its legal structure, any statutory responsibilities and the regulatory framework it operates within. You could also set out what legal challenges you’ll face throughout the lifecycle of the panel, your internal resources and budget for external counsel.
3. Who the RFP is aimed at
To help external law firms decide early if it’s in theirs and your interests to apply to join your panel, set out here exactly what type of law firms you’re looking for. List any technical competencies, specific qualifications and sector-specific expertise your panel will need. Include too, any geographical needs and if you’re looking for a mix of small and large practices on your panel, say so.
4. Your legal needs
In this section, set out what type of advice and support you’ll want your panel to provide. Be as specific as possible. For example, you may be looking for:
- Operational legal support, such as legal advice in specialist areas beyond the capability of your in-house team. This could be provided by way of a telephone help desk or email support;
- Overflow support. If your team is small, you’ll probably need overflow support from time to time. You could also ask applicants to provide a suitably qualified lawyer on a rolling secondment scheme;
- Analytical support. As the regulatory framework in your sector evolves, you may need specialist lawyers to interpret changes and advise you on how they’ll affect your organisation. For example, you’ll need the factual implications and definitions of key terms, help in researching large volumes of cases relevant to your issues and expert assessments of whether any actions you propose are realistic; and/or
- Litigation support. Your risk of litigation will depend largely on the nature of your organisation’s activity. However, it’s important to be equipped and ready to either commence legal proceedings or defend your organisation against them at any time.
5. Who’s paying for the panel – and how
Insert a paragraph here about how your organisation – or its legal function – is funded. This will enable you to emphasise the need for value and accountability.
6. How your procurement process works
Give your potential panel members an idea of how you’d select them for projects if their application is successful. To maintain some competitive tension between members, you could state that you’ll shortlist from the panel for each project. The downside of this is that you may close off the option of discounted rates for exclusivity or volume work. If you work in a public sector organisation, remember your responsibilities under the Public Procurements Regulations 2015, particularly with regards to the value thresholds over which tenders must be advertised in the Official Journal of the European Union (OJEU), at least until the UK’s exit from the EU is complete.
Set out your process for appointing and working with a law firm from your panel. This could involve:
- Request for quote to panel members by email setting out the issue, what support or advice you need, when you need it done and when you want the initial quote submitted by;
- Request for itemised quote, draft work plan and fee structure. Let the panel member know you’re looking for them to set out who in their firm will do the work, why they’ve selected that person, how much time they need to do the work and how’ll they’ll charge for it;
- Review of the itemised quote, followed by any necessary clarification of the brief and negotiation on costs;
- Official instruction to commence work, by email;
- Execution of the work and progress updates at agreed intervals;
- An agreed process for changes to the scope of work, including who in your organisation is authorised to make such changes;
- Agreed billing formats in return for your commitment to timely payment of invoices;
- Provision in the contract for the panel member to reduce their fee if they fail to deliver work to the necessary standard or within agreed timescales; and
- End of project debrief and discussion around building and improving the relationship.
7. How much work you expect to outsource to your panel
Your potential panel members will inevitably ask themselves. ‘What’s in it for us?’ before deciding whether to apply to join. Help them with an honest view of how much work you anticipate putting out to your panel. If possible, break this down across the types of legal work you set out in Part 4 of the RFP (see above) along with any possible work outside of that scope. If you feel the volume of work is small, talk up the interesting nature of your projects and any wider opportunities they may offer your panel members.
8. The day-to-day working relationship
Set out how you see your relationship with your panel members functioning when you’re working on a project together. Consider:
- What is and what isn’t billable. Stipulate that costs for billable units of time – usually five or six minutes – spent educating junior staff or correcting learning errors are to be absorbed by the external law firm. The same should apply to the firm’s own administration work, such as preparing estimates and raising invoices. If a project is particularly heavy on admin, consider allowing some of your budget to pay for the panel member’s admin grade staff at cost;
- Time recording. Ensure every member of your panel has an effective time recording process;
- Staff continuity. As well as ensuring that panel members delegate your work to the most competent and cost-effective staff member, seek assurances that staff changes will be kept to a minimum. State too that, other than when new legal disciplines are introduced, you won’t accept charges for reading up time;
- Intellectual property (IP) rights. Where you commission a panel member to research the significance of a piece of legislation to your organisation, you’ll need to agree in advance who will have the IP rights to that work. In most cases, the client and the external law firm agree that both parties should be entitled to benefit.
- Communications. The best advice is advice that you can grasp quickly and share with senior managers in your organisation, who are likely to be non-lawyers. For this reason, use your RFP to demand applicants use plain English and write (and speak) clearly and concisely. Ask that summary advice be set out on no more than one side of A4 under an agreed set of headings. For more complex communications, allow provision for a bespoke format; and
- Professional indemnity. Insist that every panel applicant has professional indemnity cover appropriate to your needs and the size of their organisation.
9. What you want applicants to provide
To ensure you can assess applicants on a like-for-like basis, set out clearly what information you want them to provide, in what format and by when. If you’ll be using a scoring system to assess the law firm, explain how it’ll work. Key information to ask for includes:
- Confirmation that the applicant fully understands the RFP;
- Confirmation that the applicant understands your organisation and its legal needs;
- A brief summary of the applicant’s history, experience and expertise in the legal areas it’s tendering for from those you defined in Part 4;
- An explanation of why the applicant feels qualified to join your panel and why it’s interested in doing so;
- The applicant’s proposed team for your work, to include lawyers, admin staff and the primary point of contact;
- Operational details, such as organisational structure, VAT number and business address;
- A copy of the applicant’s diversity policy;
- A copy of the applicant’s data privacy statement;
- Proof of professional indemnity cover;
- Any potential conflicts of interest and details of how the applicant will address them;
- Who would represent the external law firm in a telephone or face-to-face interview to discuss the application;
- A declaration that the applicant knows of no reason why your organisation may regret, be embarrassed by or criticised for including it on your panel; and
- Proposed fees and charging models.
10. Your timescale
Finally, set out your timetable for the whole process. State the date your tender period opens, when you need applications submitted by, when you’ll hold any interviews and on what date you’ll announce your selected panel members.
A well-considered request for proposal (RFP) is a vital first step towards setting up a panel of external law firms. It’s your opportunity to set out what your organisation does, what legal support it needs and what type of external law firm you want to work with. By setting your needs out clearly and providing a realistic timescale for law firms to apply within, you’ll help make your evaluation and selection process easy, yet highly effective.