Should your law firm be tendering?
Maybe.
At present there are a dozens of law firms considering participating in the biggest open tender of the year - the Whole of Australian Government Legal Services Panel, due to drop in early November 2023.
For B2B or B2G facing law firms winning a coveted spot on a government, financial institution or big corporate panel of external legal providers can seem like an easy route to a stream of revenue.
Especially in the post-COVID 2020s era with macro environmental factors (global economic ructions and geopolitical tensions) - our inclination is to chase every opportunity. And chase hard.
However, it should be remembered that winning a competitive tender, bid or proposal is just one ‘route to market’ and one of many ways to ‘close a sale’ or win a client.
In this piece I’ll walk law firms through some of the key dynamics at play in competitive selection processes and outline some of the less immediately obvious costs of bidding. If your law firm must pursue tenders, we’ll outline how you can position your firm to receive tender invitations and I’ll let you in on my #1 tip when considering a tender opportunity.
Understand the dynamics of competitive selection processes
A few things to consider when presented with a tender ‘opportunity’:
Has it been publicly advertised far and wide? For example, on a government procurement site or in the newspaper? These types of ‘open’ tenders are most likely to be issued by government or government entities that are required to seek competitive proposals to meet fairness, contestability and value for money tests.
Have you been invited late in the process, several days after the bid was released? This could mean you’ve been added as an afterthought, to make up the numbers, or as a favour by a friendly, well-meaning contact who has no real say in the outcome.
Do the request documents seem to assume a lot of knowledge of the tendering organisation? Does it feel like this request has been written for a specific firm?
If the request is not quite a ‘tender’ but perhaps a general call for Requests for Information or Expressions of Interest, is the vendor genuine about proceeding to a formal tender? Or are they just wasting everyone’s time with tyre kicking on epic scale because it’s a cheap form of market research?
Is the tendering organisation under pressure to go out and test the market widely but at the same time to reduce the number of providers?
What is the origin of this process, and why now? Is it cyclical? Political? New management? Cost cutting?
If several firms will be appointed (to a 'panel' or 'list') are you prepared to do further work to leverage your position, raise your firm profile, and build relationships once you’re on the list?
These are just a few of the different dynamics that can be at play during a procurement exercise and should be looked at with clear eyes before proceeding and getting caught up in the deadline driven 'process' that comes with tendering.
Before your law firm tenders, also consider all the costs
Beyond carefully considering the known and unknown background to a tender there are lots of good reasons not to respond. Consider these direct and indirect costs of participation and weigh them against your chance of success:
Financial costs (production, delivery, external consultants)
Opportunity cost (missing out on billable work, time away from better opportunities)
Morale cost of losing for your team (tenders take intensive work to prepare)
The risk of being seen as a ‘loser’ by the prospective client and/or evaluators (and potentially making it harder to prove yourself to them next time around)
Professional and management attention devoted to damage control and fall out post-bid.
But, our law firm still wants to ‘do tenders’...
If your law firm still wishes to pursue competitive bids, tenders and proposals read on to learn how to position for invitations to participate in closed tenders.
How can your firm get invitations to participate in ‘closed’ tenders?
As the name suggests, closed tenders involve only pre-selected bidders unlike government tenders which are advertised publicly and are 'open' to participate in.
Those invited to a 'closed' selection process have been pre-qualified in some way; perhaps by successfully making it through an Expression of Interest (EOI) round, or by being invited based on an existing relationship, referral or occasionally by market reputation.
Closed tenders are most likely to be found in the private sector; think banks, insurers, telcos and other large consumers of legal services.
To position your firm to receive invitations to bid in closed competitions you need to be prepared to play a long game. And the long game goes something like this:
Pick the organisation or organisations that you want to work for that align to your capabilities.
Look for ways to get to know them – where do they hang out?
Identify their issues and concerns, and what you can do to solve them.
Use your contacts to gain introductions to the right people.
Provide them with substantial, relevant and genuinely helpful thought leadership pieces (not just a copy of your firm newsletter).
Network (safely i.e. with appropriate social distancing) with key people (including those that can introduce or refer you) at professional and industry events and add value to those relationships.
Join and participate in LinkedIn groups and discussions, or other online forums, in which they are active (more essential than ever post-pandemic with remote and hybrid working arrangements now the norm).
'Rinse 'n' repeat' as part of your ongoing BD routine and repertoire!
If you can get some ‘off-panel’ pieces of work (and in the case of the Australian Government up to 10% of work can go off-panel), it goes without saying that you need to do an excellent job. Use the opportunity to give them a taste of your service style and demonstrate the great benefits of working with you (this is and has always been the easiest and best sell).
The long game can take a few years.
Yes, years. But don’t be put off, because when the procurement cycle comes up again, the time and effort you have invested will give you a much greater chance of being invited to tender. The perception (and reality) you’ve built up with that prospective client is that you’re an expert in the field who’s great to work with.
So, the long game is easy to learn, but difficult to master, particularly when it comes to the discipline of staying the course over a long period.
Much of the long game relationship development advice also goes for the publicly advertised tenders (such as those upcoming NSW Government bids) and for informal business development opportunities.
The #1 thing law firms should consider when deciding to participate in a tender
With all of the above in mind, your number 1 consideration, no matter the tender circumstance, open or closed, is ‘do we know the tendering organisation, and more importantly do they know us – at all?’.
If your firm has no relationships with, or real insight into, the tendering organisation, then what you can offer will be superficial and untargeted (especially when compared to incumbents); hardly appealing to evaluators and prospective clients.
If your firm is still having trouble deciding whether or not to pursue a tender 'opportunity' why not chat with us, our bid or no bid service can help make the tender decision making process a little more objective.