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Love me tender

Feature Articles

Cite as: (2003) 77(7) LIJ, p.54

Tendering has become a way of life for law firms. Clients are becoming more sophisticated in their tender requirements and firms are having to find new ways to respond to them.

By Jane Fenton and Anna Grutzner

Tendering for work places an enormous burden on even the best-organised law firms, and firms are questioning how they can better manage winning new work in a tendering environment. Tendering has also highlighted the sharp focus clients have on the bottom line, with many law firms feeling that tender presentations end up being bidding wars on price.

Not only are companies (including even the smallest small to medium enterprises) using tenders with increasing regularity, big companies are laying down some challenging new ground rules. Some are driven by the need to better manage the tender process internally, others to deliver better end results. There is certainly evidence that corporate counsel are talking to each other about tendering as there is an increasing sameness about the new format of tender documents from companies which have in-house lawyers.

The new tender process often includes:

  • the use of electronic formats with strict word limits;
  • questions about the law firm’s business plans, profitability and competitors which most firms regard as invasive;
  • a shift away from the previous lavish documents and high-tech presentations to more low-key but professional pitches; and
  • a significant focus on alternative billing methodologies and fee arrangements which require law firms to think about how they will price their services.

WHAT MAKES A WINNING OR LOSING TENDER?

A number of important features are common to successful tenders. The tenders:

  • have a strong but brief executive summary in the front of the document;
  • evidence an understanding of the client’s specific legal and business drivers;
  • give a demonstration of actual expertise;
  • have a client-benefit focus; and
  • use simple charts and diagrams instead of complex text.

These types of tenders are usually only produced when the whole client team has brainstormed the questions and answers, and provided good input to the process of responding to the tender.

Unsuccessful tenders frequently suffer from too little partner involvement, an expectation that either the marketing team or the junior lawyers will provide the legal input, no time management and complicated fee structures. They do not follow the structure and numeration of the request for tender (RFT) (although actual compliance may not be an issue for some clients, it can be the downfall of anyone pitching for government work), are difficult to navigate and are invariably too long, especially the CVs. They have a generic feel because they are generic. Creating base materials and templates does save time and effort when tendering but it does not obviate the need for carefully client-customised responses.

Managing the tender process requires a more holistic approach than simply passing every RFT to the marketing coordinator and expecting a completed document on the final lodgment day.

KEY STEPS TO A WINNING TENDER

There are seven key stages involved in winning work through tenders:

1. Getting the opportunity to tender
Opportunities to respond to tenders come about in a variety of ways. Some tenders are open and advertised via the mass media to all and sundry. These are generally difficult to win. For most firms, responding to these will be a complete waste of time and energy unless you can answer “yes” to the factors below that influence client decision-making.

More often, law firms are invited to tender and compete against a limited number of other firms. The client has effectively short-listed the firm.

The chances of winning are significantly greater as the client has already determined that you should be approached for one of the following reasons: existing relationships, referrals from valued sources, your reputation in the area or areas of law, your reputation in industry and the profile of an individual lawyer or law firm.

It is more reasonable to spend significant time and energy preparing a response to these tender requests than the open-ended ones.

Incumbents generally have the front running in the tender process, for the reasons outlined above, except where the client is unhappy with the service.

2. Determining whether or not to tender
One of the most important decisions a law firm can make is whether or not to tender.

It takes significant time and effort to put together a response to a tender that is of a high standard and there are times when the firm’s resources would be better deployed looking after existing clients or seeking new targeted business opportunities.

Many of the law firms which tendered for the Victorian state government work found it cost them weeks of unbillable lawyer time as well as the cost of expert in-house or external marketing advice and support. It is not worth making this sort of investment if you have no chance of winning.

We have heard lawyers justify tendering for everything that comes along on the following grounds:

  • “we know we are not going to win but we want them to know we are interested”;
  • “we will never have a chance to break into new areas if we don’t tender for business”;
  • “it doesn’t matter that we can’t meet all their needs – we have to try”; and
  • “I play golf with the CEO – we have to have a chance”.

None of these add up to a business case for spending significant resources. Before deciding to tender, ask some key questions:

  • do you believe that you are a good fit with the tendering organisation?;
  • have you any other reason for believing that you might win it?;
  • is there anything special or different about you which gives you a chance?;
  • do you think it is a genuine tender?;
  • will it create a conflict?;
  • have you the resources to do it?;
  • will it cause any ethical or moral concerns?;
  • do you know anyone in the organisation who might support you?; and
  • are the deadlines reasonable – can you actually prepare a good response by the deadline?

You need to have the right answers to the majority of these questions to even begin the tender process.

3. Gathering the information for the tender
Information is what wins or loses tenders. To have any chance of positioning your firm as a provider of choice you need to understand what is important to the client. The more you are in tune with their needs, their future directions, business strategies and drivers, the easier it is to match your firm and its service offering to that of the client. Alternatively, if there is absolutely no similarity or a clash of cultures you may choose to exercise your right not to proceed because you cannot see a fit.

Information sources for finding out more about the tendering organisation include: IBIS World http://www.ibisworld.com.au; newspaper websites via the firm subscription; the tendering firm website; web research via a search engine; internal research by asking around the firm; news clippings; and, if allowed, a meeting with the potential client.

4. Preparing the written response
The written response is the basis on which you will be judged in the first instance. It is this response which will determine whether or not you get short-listed and invited for interview.

The most important step a firm can take at this stage is to plan to write a winning response. This means recognising that something cobbled together at the last minute with separate sections written by different people in different styles is unlikely to impress. Good processes are essential to the development of a winning response. These include:

  • developing a checklist of all of the things that must be included for the tender to comply;
  • identifying where the firm has appropriate precedent materials and where fresh material will have to be generated;
  • developing a project management plan – what has to be done by when to get the document ready on time;
  • allocating responsibilities – who has to do what on the project plan; and
  • creating some time for brainstorming and for thinking through the difficult issues like pricing.

All too often, the day before the tender is due firms are debating the numbers in the tender. They are trying to work out whether or not to discount, whether it is possible to provide discount for volume and, if so, at what level, or if a flat fee is what the client is really looking for, how to set that fee.

While each tender does have to be considered on a case-by-case basis, firms should do strategic work in advance to determine what range of fee options they can offer and what circumstances will dictate which option. The prices quoted in the tender document are often locked in for three years so these are important decisions – they can have a significant impact on the profitability of the work.

Once the procedural aspects have been taken care of you can start to consider how you are going to distinguish yourself in the written document. The key to achieving this involves:

  • writing in terms of benefits to the client, not features of the firm;
  • asking yourself how you can add real value to this client;
  • demonstrating expertise and experience rather than simply claiming it; and
  • ensuring you allow time for the professional presentation of the document.

Proof is the most important distinguishing factor, yet all too often tenders are full of unsubstantiated statements. If a firm is claiming leadership it needs to explain why it is a leader, and if it is claiming superior service it needs to be able to show why it is better and different.

5. Preparing a winning presentation
In most cases short-listed law firms will be asked to make a presentation.

This is a critical but often underestimated part of the process. This is where a panel judges not only your answers to questions but also your body language and style. It is at this stage they are asking themselves – “Do I like these people? Could I work with them?”.

As with writing a winning response, the key is preparation. Get information on the format, the room set-up, the number of people attending and the timing so that you can practise the presentation in the same format.

Create an internal panel to listen to your presentation and to ask you the difficult questions. Get them to review your answers and to give feedback on the presentation. It is practice which makes perfect.

You need to be absolutely clear about who on your team is going to answer which type of queries, who is going to say what in the presentation and how you are going to present as a team. The choreography of the presentation needs to be clear to all involved.

Both verbal and non-verbal communication needs to be practised, for example establishing rapport and eye contact, smiling, using powerful anecdotes and the use of client and team member names.

6. Doing a debrief
Some tendering organisations refuse to give debriefs regardless of whether a firm has won or lost a tender.

This is unfair and inappropriate behaviour, given the effort and time most firms put into tendering. If a firm has lost a tender the only opportunity to gain anything from the process is to get guidance on how to improve its response.

Assuming there has not been a total refusal to provide a debrief, a face-to-face meeting provides the best environment for finding out why the firm either won or lost.

If a bid has failed, then it can be helpful to send either a team or an individual to the debrief who was not actively involved in the tender process. It is much easier to assimilate negative feedback if you are not struggling with taking it personally and it also makes it more likely that the feedback session will be a listening session rather than a second attempt to try and win the work.

Here are a few of the areas you might want to question:

  • ask about all aspects of the process – both the document and the presentation;
  • ask who won and why – what was special about their response?; and
  • ask if there is any prospect of working together, for example on conflicts panel or in other areas of law.

Many firms only try to do a debrief when they have failed. But to find out why you won can be just as valuable. It helps firms understand what the key issues were for the client and assists them maintain their focus on the things the client thought were important.

7. Getting your share of the work
Sadly, as many firms have discovered, winning the tender is not the end – it is just the beginning. There are many instances where delight at getting on to a panel has turned to despair as the expected work fails to materialise.

While a few clients insist on giving work to their panel firms in turn, this is not the norm. A new firm on a panel has the time-consuming job of establishing relationships and developing and following through on a relationship development plan if it is to benefit from its tender win. Like every other aspect of marketing and business development, it is an ongoing process.


JANE FENTON is managing director and ANNA GRUTZNER is principal consultant at Fenton Communications.

They are public relations and marketing communications consultants who specialise in working with lawyers and other professional service providers. They are both members of the Australian Professional Services Marketing Association and Jane is a member of the Law Practice Management Association. They are the co-authors of Rain Dance – a practical marketing guide for lawyers, and a research report on Legal Marketing Today – Strategic tool or untapped potential?

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