How to retain your client at tender

One minute you’re handling the needs of a longstanding and in your eyes loyal and satisfied client – the next, the same client has requested that your firm retender for its legal work in competition with a handful of your competitors. This nightmare scenario is becoming more common for law firm partners as clients look to get a better deal from their legal advisers in an increasingly competitive legal market. So, what should you do when faced with such a situation?

Don’t panic

As the incumbent lawyers, and if your firm has not made an enormous foul-up of things, your knowledge of the client’s organisation, business, and legal needs ought to put you ahead of the competition. So, don’t panic but put yourself in the client’s shoes and seek to understand: (a) why they have decided to tender their legal services; (b) what they are seeking from their law firm(s) going forward; and (c) ask yourself how your firm can meet these needs.

Why has the client gone to tender?

In order to prepare an effective strategy to defend your firm’s position as the client’s legal adviser, the first thing to do is to find out why the client has decided to put their legal work out to tender. There are many reasons for such a move and the most common include the following:

  • The arrival of a new decision-maker directly responsible for appointing legal advisers, eg a new GC. This individual will usually have preferred advisers that they have worked with in the past and now they are looking to bring these into their new organisation. Holding a tender allows the decision-maker to construct a ‘transparent’ process to make this happen.
  • Poor performance by your firm may have led the client to review its options for using law firms going forward.
  • A ‘market testing’ exercise is being run by the client, perhaps by Procurement, to see if the best value is being obtained for legal services. In the current environment, such exercises are more common as increasingly influential Procurement departments flex their muscles.
  • Many clients are actively looking to reduce the number of law firms used by their organisation and retendering the services is often seen as the best way to do this.
  • A company restructuring, perhaps as part of a merger or acquisition, may have acted as the catalyst to review the organisation’s advisers, including lawyers.

Whatever the reason, it is important to understand whether the stated reason is the real reason or whether there is a hidden agenda which may affect your firm’s ability to defend its position.

At this stage, it is important to understand which individuals are going to be influential in the selection process and of these which are friends of the firm and which are not. Your friends may be able to help you to understand if there are any hidden agendas and how the firm might respond to these.

Generally, I would say that if notification of the tender has come out of the blue, it is usually not good news for your firm as it shows little respect for and loyalty towards the existing relationship. This is most common when the firm has provided poor service, or even negligent advice, which has damaged the client. If this is the case, use the tender process to make sure that you ‘drill down’ to understand where things have gone wrong with the relationship. It may be that things are so bad that the best course of action is to walk away without even trying to win the client back.

What is the client seeking in the future?

The ITT (Invitation to Tender) ought to set out the legal services required by the organisation along with the criteria against which competing firms will be judged. Use your knowledge of the client, and question your friendly contacts, to ascertain whether these are the real criteria or whether other ‘unwritten’ criteria will be more important.

Ask yourself whether the client wants better service, better value, better expertise, better jurisdictional coverage or a combination of all four, and what their priorities are.

Given your knowledge of the client, your firm may be in a position to ‘challenge’ whether these criteria are deliverable. If it is felt that the client’s expectations are unrealistic, lobby your friends in the organisation to test how your concerns might be received. For example, the client may be looking for substantial cost savings in its legal services spend, but realistically your firm believes that this could only be achieved by increasing the number of in-house legal staff to undertake more of the less complex work at lower cost, and this option hasn’t been mentioned in the ITT.

How can your firm now meet the client’s needs?

It is never easy as an incumbent firm trying to identify ways to improve the service to an existing client. For one thing, there is always the danger that such improvements or service innovations will be met by the client with a comment along the lines of, “Why weren’t you doing this before?” On the flip side, assuming you can just carry on as in the past without making changes to your approach may come across to the client as complacency.

As part of the firm’s tender preparation process, ensure that a fresh perspective is achieved by bringing in some new faces to the team who may be able to identify some service enhancements. If needs be, do not duck difficult decisions like changing the client relationship partner especially if your enquiries have revealed that the client would prefer a new partner to be leading the team.

Above all, approach the tender in the same way and with the same energy that you would if you were pitching to a new client. Gather as much intelligence on the individuals and their motivations, the organisation and its plans, the stated legal service needs, and the criteria against which a successful bid will be assessed. Finally, articulate a winning strategy by aligning your firm’s capabilities with the client’s requirements. Oh, and don’t panic!

More information on the key to winning tenders can be found in my previous blog ‘Ten top tips for winning pitches’.

Kevin Wheeler is a business consultant and coach with more than 20 years’ experience working in legal marketing and business development. He advises on and coaches teams of lawyers to win tenders and new business pitches. Kevin can be contacted at kevin.wheeler@wheelerassociates.co.uk

Filed Under: Practice of Law

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