Oct 8 '14
Elephant Creative associate, James McLeod, specialises in helping law firms to improve the quality of their tender bids and develop their service methodologies. In this article, published in PM Magazine (October 2014) he discusses how clients are using the competitive tender process to find out what firms are promising and how they plan to deliver it.
‘Innovation’. ‘Commercial solutions’. ‘Continuous improvement’. ‘Added value’. These and other catch phrases describing what law firms are promising to deliver to clients now appear in nearly every firm tender bid and on nearly every firm website. But increasingly, large buyer organisations want to know more than just what firms are promising to deliver – they want to know how they’ll deliver it, and they’re using the competitive tender process to find out. To differentiate one firm’s offering from another, these clients are asking probing questions about the way firms work – their methodologies, best practices, systems and processes (which for simplicity I’ll refer to as ‘methodology’).
Over the years I’ve read hundreds of law firm tender bids – both when helping buyers to establish their legal panels and more recently helping law firms to develop their bids. I’ve found that whilst most firms are good at saying what they do, they’re generally poor at explaining how they do it. I expect that firms providing other professional services encounter a similar problem.
Why is this? Is it just down to poor communication or does it reveal a more fundamental problem with the way in which many firms deliver their service? I suggest it’s both. But first, let’s take a look at the importance clients are placing on methodology, the kinds of questions they are asking, and their reasons for asking them.
“Don’t just tell us what you’ll deliver; tell us how you’ll deliver it”
The importance that clients are placing on firms’ methodologies is perhaps best illustrated by the relative weighting assigned to questions about them in tender documents. In public sector tenders, where buyers must disclose weightings, the methodology (or ‘service delivery’) section is frequently greater than or equal to price in weighting. This is particularly interesting given the price sensitivities of public sector buyers. In the private sector too, most large buyers are including a substantial methodology section in their tender documents.
The kinds of methodology questions clients are asking span both the operational and strategic levels of a firm’s service, and cover areas such as project management, quality management, risk management, communication, reducing/managing costs, innovation, continuous improvement, added value, relationship/account management, and even how firms would approach advising on a particular factual scenario.
Whilst the often highly detailed line of questioning is making life difficult for law firm bid teams, from the client’s perspective it’s quite understandable. If they didn’t ask these questions, they’d be forced to select firms essentially on the basis of vague promises, technical expertise and hourly rates – all of which provide little indication of the level of service the client will receive and the price they’ll ultimately pay for it. Further, any firm can say they will do something, but if the statement isn’t backed up by a clear method, why should it be believed?
Even leaving aside the client’s drivers behind methodology questions, firms should be recognising the value in being able to explain their methodologies. Given that most firms are essentially promising the same or very similar things, those firms that can confidently explain the “how” behind the “what” will more clearly differentiate themselves and gain a competitive advantage.
Why do firms struggle to explain the ‘how’?
I think there are two reasons. The first and underlying reason is the general lack of standardised, documented methodologies within law firms. Clifford Chance recently provided a good explanation for this in it’s white paper, ‘Applying Continuous Improvement to Legal Services’, where it stated, “…lawyers historically have not been trained to look at the work they do as a process…the focus is on the acquisition of knowledge and expertise, rather than understanding the ‘how’ or ‘why’ of service delivery. The result is not a lack of process, but fewer fully standardised processes.” This explains why lawyers are often stumped when, in a tender they are asked to explain, “how will you ensure a quality service”, “how will you deliver a cost-effective service?”, “how will you manage our risks” etc. “What do you mean?”, they usually exclaim, “We just do!”
The same applies at the more strategic level of the law firm-client relationship. Traditionally, client relationships have been developed and maintained through ‘soft’ skills rather than through the more structured approach of a key account programme. But with tender questions now asking how firms will manage the relationship, how they will work as a strategic partner, how they will deliver added value, firms must explain their method. Very often, however, firms’ responses to these questions simply consist of the naming of a client relationship partner, a list of things the firm can do to add value (e.g. invitations to training events) and a promise of regular meetings to ‘assess how things are going’. From the client’s perspective, the response lacks a clear plan and process for managing the relationship.
Whilst some firms appear to be making progress in developing their methodologies, most firms appear to be struggling. For example, I was recently asked by a large law firm to review their template bid response to questions about continuous improvement. Not only was it clear from the response that the firm didn’t have a continuous improvement programme in place but also that the writer didn’t understand what continuous improvement, as a process, actually was.
This brings me to the second reason why I think firms struggle with methodology questions – very often the people who write tender bids don’t understand the methodologies they are being asked to describe. In particular, I’m referring to law firm Marketing/BD teams. Whilst documenting methodologies and developing template responses to frequently asked tender questions are important steps, rarely will two tender questions be identical, and it’s very difficult for someone to explain the how of their business unless they have a solid understanding of it.
How should law firms go about tackling the problem?
First and foremost, they need to invest in developing, standardising and documenting their methodologies. Based on the types of questions being asked in tenders and what clients appear to be saying more generally, the 3 key areas of focus should be Legal Project Management, Continuous Improvement, and Key Account Management. If firms can standardise their approach in these areas, they’ll be able to answer most tender questions with accurate, clear and compelling responses that differentiate them from their competitors. Obviously, it’s also important that firms commit to implementing these methodologies, and not just use them as window dressing for winning business.
Second, firms need to educate the people on the frontline of selling, particularly Marketing/BD staff, on their key methodologies. For example, if a firm was implementing a Legal Project Management programme, then BD staff might be invited to attend the introductory training to develop their understanding of what it is. They might then meet regularly with those running the programme to understand the key features of the firm’s method and the benefits it has delivered to clients, so they can then explain this in their bids.
It’s time for law firms to start getting to grips with the methodologies that deliver their value proposition, so they can confidently say to clients, “This is our way of doing things”. More specifically, they need to understand how they currently do things, align their existing practices with tried and tested methodologies, document those methodologies, and educate the people in their business who need to explain them to clients.
In the words of the management consultant, W. Edwards Denning, “If you can’t describe what you are doing as a process, you don’t know what you’re doing”. Next time you are preparing a response to a methodology question, you might like to put aside everything you know about your firm, place yourself in the client’s shoes and ask, “Does this really sound like we know what we are doing?”
Published in PM Forum Magazine, October 2014 issue. For more info about PM Forum contact Paul Lemon, Paul@pmint.co.uk.