Perfect pitch

Any practice with sizeable corporate clients will affirm the importance of tendering nowadays in securing work – “a hugely important part of our business development”, in the words of Henderson Boyd Jackson’s Malcolm McPherson.

Yet a survey of comments from leading Scottish firms reveals some surprising variations in practice on the client side, such that it would not be surprising if the outcome in some cases was rather more hit and miss. 

“I would have to say that the quality of the invitations to tender (ITTs) which we come across is very variable, and this is true of both the public sector and the private sector”, comments John Urquhart of Morton Fraser, who handles all the major tenders his firm submits.

“It is always a warning sign if the ITT comes from ‘Group Purchasing’ or ‘Procurement Division’. There is then every chance that you will be dealing with a standard document used to procure everything from the reconstruction of the fourth floor ladies’ toilets to the supply of the canteen sandwiches, with precious little indication of any attention to the fact that the subject matter is the supply of professional services, much less legal services.” He has even received cut-and-paste jobs still containing references from the last time the document was used, and electronic forms that reveal the final draft with tracked changes.

“The best run tendering processes have a clear programme from pre-qualification, through tendering to interview, and allow sufficient time to address each question in depth”, says Louisa Langley, acting head of client relations at Dundas & Wilson. Sorcha O’Connor of McGrigors’ business development team agrees:

“The most useful tendering process is demonstrated by a client that is clear about their requirements and open to discussion ahead of receipt of the tender, matched by a firm that does its research thoroughly and produces a targeted tender document discussing only relevant information.”

Internal conflicts?

One potential bone of contention, for in-house legal teams as much as for prospective advisers, is the growing involvement of procurement. In most cases there is some trade-off between the in-house lawyers’ advantage in assessing the competing candidates’ professional capabilities and the value offered, and procurement’s focus on budgetary and other commercial issues.

“There can be tensions between the two”, one former in-house lawyer commented. “It isn’t always the legal team that leads. But both teams have a part to play – the legal team has to have a say on the qualitative assessment of ability; while procurement are better placed to advise on cost, risk management and insurance.”

At the Scottish Executive, which puts out to tender work judged to be outwith the expertise of its legal team, a two-stage process is used. A panel of firms, currently 12 strong, is appointed by legal staff with advice from procurement on the process to be followed; while for specific projects, decisions are taken after a further exercise by legal staff in conjunction with the administrator responsible for the project.

What they really want

No one who spoke to the Journal appeared to consider that tenders are being won and lost on the basis of cost alone. “Clients seem to be looking beyond lowest price to things like culture, infrastructure and relationships”, in Louisa Langley’s view. “Looking at how much commitment to added value a law firm provides can greatly enhance the client-adviser relationship and the successful outcome of a project.”

Echoing these words, Malcolm McPherson comments that cultural issues extend to enquiring into the firm’s own standards as well as to a perceived shared mindset. “What billable hours are expected, say of someone two years qualified? They don’t want to be associated with unfairness.”

John Urquhart again sees a more professional approach adopted by some clients than by others. “Many clients use a formal matrix for assessing competing tenders, and it seems to me that there is no reason for the client to be secretive about the values attached to each aspect. For example, the client may specify that out of 10 points, four will be allocated to price, three to relevant previous experience, two to quality of personnel and one to added value.

“However I think we all feel that there are too many cases where clients take the decision on who to appoint on a very subjective basis. The ITT demands 50 pages of information about your firm, your experience and your charging structure, but you just know the client will spend no more than 20 minutes reading it.” And in some cases, the whole exercise may just be a means of forcing an established supplier to lower their prices.

Urquhart describes as “refreshingly different” one UK company's tender last year for the appointment of Scottish solicitors, which relied entirely on a personal presentation rather than submission of a lengthy tender document. Such an approach is unusual. At the other extreme, General Electric’s first UK legal panel was recently appointed via an online bidding process – albeit involving a shortlist selected by the in-house team based on past experience and work done. Either approach might make it harder to put into practice the received wisdom that to pitch successfully, it is necessary to identify and cultivate a target client well in advance of the ITT, in order properly to understand the issues, and to develop the personal contacts necessary to increase your knowledge – and your chances of success.

Only the first stage?

Once a firm is on a panel, it may still have to compete for actual instructions. Under the Scottish Executive’s two-stage process, panel firms usually bid for individual projects via a “mini-tender” procedure. “The purpose of this exercise is to seek an explanation of specific expertise that the firm can bring to the project in question to ensure that the best firm is appointed”, the Solicitor’s Office explained. At the latter stage, “quality of bid, experience and expertise and cost” are the principal criteria: “The idea is not to get firms to highlight the same qualities that got them appointed to the panel, but rather the specific expertise and experience that they can bring to the project.”

At a further level of sophistication, one UK financial institution adopted a three-tier panel structure, engaging “magic circle” firms for corporate takeovers and other major transactions, second-tier firms with significant commercial expertise for other substantial corporate work such as distribution arrangements; and firms able to handle high volume, low value transactional work for, say, debt collection.

In this way it aimed to ensure best value and allocate work to the most appropriate firm at each level.

Constant nurture

Commonly asked to re-tender every two or three years, firms also have to work hard to keep clients once appointed. “A well performing incumbent legal adviser may never be asked to re-tender”, says Sorcha O’Connor. “On the other hand expectations of clients are increasing all the time…. Firms such as ours are constantly working with clients to deliver extra value added services based on client need.”

With this level of sophistication, and such wide variations in practice as currently exist, it is not surprising that legal firms have woken up to the need to put substantial resources into getting their pitch right – itself a reason for carefully identifying in advance the clients you would most like to work for, rather than pitching for everything that comes along.

“We put a great effort into tendering”, asserts Malcolm Macpherson. “Previously we had a naïve approach, but now we are much more focused.”

Very similar sentiments are expressed by Wright Johnston & Mackenzie’s Nick Mackay, convener of the firm’s tenders management group, who claims an improved success rate since WJM took a serious look at its bidding practice.

“We were simply not doing ourselves justice”, he explains. “What was lacking was a clear and client-focused style of presentation that convincingly told the client: ‘We understand exactly what you are looking for and we have the resources and capability to deliver.’

“Our new approach starts with the clients and asks what they are really looking for. It sounds daft but sometimes we were only asking the client that question when seeking feedback on an unsuccessful tender. One comment we received was that the successful tenderer (not us) had offered a ‘hand in glove’ solution. Our approach now is therefore to understand the ‘hand’ better from the outset so that we can fashion the right ‘glove’. It’s definitely not all about cost.”

Any opportunity to talk through the tender specification with the client is now pursued, he says. “We no longer assume that just because we already know the client or work type we automatically have an off-the-peg solution.”

The value of feedback

In the learning process client feedback is important, whether following success or failure. Again some clients appreciate that this can be mutually beneficial, but others are less helpful. “A thorough de-brief whether you win the work or not is always really useful. Sadly, a large number of organisations only pay lip service to this part of the process”, comments Biggart Baillie’s head of business development Rob McInally. Nick Mackay reports: “In one case the client commented that we seemed to be offering the best value in our tender even though we had not made the lowest price bid. It was clear that, for this client, value stemmed from factors other than price alone”.

Sorcha O’Connor finds an approach from outwith the tendering team useful: “The marketing and business development team are increasingly carrying out these feedback sessions as companies seem to find it easier to give feedback to us rather than to the lawyers directly.”

The freedom of information regime can assist in gleaning information from public bodies; perhaps for this reason, some firms commented that these bodies do tend to give helpful feedback.

Clearly there are no hard and fast rules, and tendering demands considerable input if a firm is to score a reasonable success rate. Another illustration, perhaps, of the all-round professionalism needed to compete at the leading edge, even in our small jurisdiction.

THE SECRETS OF WINNING PITCHES

Winning work in competitive tender situations has never been harder for law firms. The standards are constantly improving, and prospective clients are demanding much more of their legal advisers. Those who know how to do it effectively are gaining considerable ground over those who do not. And clients recognise that putting their work out to tender can have many benefits – a lower price, better service and more efficiency are just some.

Learn the tricks of the trade

An invitation to pitch for new work normally doesn’t appear from thin air. It is usually as a result of ongoing business development effort, which includes all aspects of marketing, targeting and relationship development – and there is no doubt that where a firm already has established contacts or relationships, its chances of success in the proposal situation are far greater.

The proposal process involves a good deal more than simply producing a proposal document. Everything you do during factfinding “scoping” meetings with the potential client will be assessed by them, and the relationship you build with them at this stage will have a very significant influence on whether you win or lose the pitch.

What do the clients say?

We at the Results Consultancy undertake regular research into what clients want from their legal advisers. Of course all tenders are different, and the criteria for selecting the winner will vary from pitch to pitch. However, our research in the market indicates that organisations generally have similar expectations in key areas, and in order to win it is important for you to excel in each of these three areas:

• Work with us

All clients when selecting business partners to work with stress the need for them to be “people they can do business with”. Whilst it is not possible to transform yourself or other people on your team into something or someone they are not, it is important to think carefully about the team you put forward and the fit in terms of personal chemistry.

• Understand our business

Clients want legal advisers who understand their issues, both within the industry and within their company. They have little time for people who don’t demonstrate that they understand and, where possible, have solutions to the issues they face. All of the major legal firms have broadly similar skills – so the winning firm needs to make absolutely sure that their proposal demonstrates clearly how they will be able to add value to the prospective client, and in so doing differentiate themselves.

• Give us your best price

In these days of tight budgetary control it is important in a competitive proposal situation to be acutely aware of your potential client’s views on price as a deciding factor. Some sectors are particularly price sensitive and often tenders are won on this basis alone. It is vital, therefore, that your price represents true value for money. That is not to say that you should always be the cheapest. Instead, it means that your proposal will have the best chance of success if you are clearly able to demonstrate the tangible, added value benefits that you bring.

Seizing pole position

All of the research undertaken in this area indicates that the keys to success in proposals are both the quality of the relationships the firm has built up with the potential client and the firm’s ability to offer benefits in the form of tailored solutions to the organisation’s needs.

Neither of these is achieved by introspection or sitting in offices discussing the finer grammatical points of successive drafts of a proposal document. Success is often achieved by meeting the potential client’s people and using your expertise to understand the issues and identify solutions.

Successful firms therefore invest significant time and effort into preparing for, and participating in, meetings with the potential client. They treat each as a major step towards winning the assignment.

Managing the pitch process

Whether you are putting together a speculative proposal or responding to a defined invitation to tender, all those involved in the process need to be clear what is expected of everyone and when it is required.

You must demonstrate your quality and efficiency during the research and relationship building phases of the tender process. If you don’t demonstrate enthusiasm, commitment and a professional approach to working with the potential client at this stage, why should they think it would be any different if you win the tender? How you behave, and how you help build trust in your abilities are important deciding factors in the selection of the tender winner.

Keep in the driving seat

Developing a streamlined process in responding to proposals and tenders ensures that all those involved allocate sufficient time to the opportunity.

Establishing a clear timetable enables you to assign specific roles and responsibilities, covering fundamental requirements such as “thinking time” (i.e. on your strategy), researching and qualifying the client’s needs, and ultimately producing a tailored proposal document. The net effect of a general lack of planning is that all of your effort is concentrated on the written document, which significantly restricts your chances of success.

Agreeing strategy and tactics

To win business, you need to focus your efforts. A focused strategy gives direction to the whole proposal process. When looking at an opportunity, you need to take decisions as soon as possible in response to three key strategic questions:

Bid/no bid: Are you clear about what you want to achieve and why? Are you able, truly, to respond to the prospect’s real needs? If not, why are you bidding?

Your investment: How much are you prepared to invest upfront, considering the likely future returns? Are you able to undertake the work profitably? What impact will the work have on your staffing levels and leverage?

Selecting the right team: Do you have the right team to win – people who can work together internally to deliver externally; people with the right technical skills; and people available now to handle the work should you win?

On the basis that you are able to tick all these boxes, you clearly have to convert your strategy into action. This means tackling the following three issues up front, even before you think about starting work on the written document:

• Developing “value propositions” – differentiated selling messages targeted at real needs, and backed up with compelling evidence to support your proposition that they should choose you.
• Building strong relationships – meeting the people who will make the decisions on which firm to appoint before any documents are submitted.
• Beating the competition – finding out as much as you can about your competitors makes it easier for you to put together a strong case for choosing your firm.

The written document

The written document reflects your commitment to the prospective client. A poorly written and badly designed document gives out all the wrong messages. The converse is also true. The ideal scenario is to produce a quality, well-written and well-designed document to add further weight to the relationship you have already built up during your research meetings. Writing in a style that is easily understood and emphasises the benefits of your approach over others will make a significant difference to your chances of success. It is hard for a potential client to read three or more documents and compare them accurately. If your proposal gets to the point and sets out all the information requested in a persuasive manner, you have a head start going into the oral presentation, if there is one.

The oral presentation

The oral presentation is often the deciding factor in the tender process. The reasons for this are that, generally, all of the key decision-makers are present and that the oral presentation provides an opportunity to test the relationship between your team and that of the potential client. The team that differentiates itself at this stage by highlighting the benefits of their firm’s approach, its relevant skills and the value for money it brings, will score over those who don’t have such a clear message.

The debrief

Often overlooked and neglected, a formal debrief both internally and with the client ensures that lessons are learned and best practice refined. This should be undertaken whether you win or lose, as you can never be complacent or arrogant enough to believe that the client is always 100% happy with your performance in the pitch process.

The debrief should also be used as an opportunity to plan follow-up actions – either to ensure you keep in contact with the potential client (if you have lost), or to plan how the work will be delivered and the relationship developed (if you have won).

John Timperley is Managing Director of The Results Consultancy, which specialises in helping organisations win high value work in pitch and tender situations. t: 07710 035890 e: results@winningbusiness.net