All professional services firms are improving the way they respond to request for proposals (RFPs) but UK law firms may
Making the effort count
marketing basics
Totum’s recent research into RFPs showed that firms are getting better at winning pitches, but which ones enjoy the highest conversion rates? And why? Liz Chappell delves into the detail.
A
ll professional services firms are improving the way they respond to request for proposals (RFPs) but UK law firms may currently have the edge over US firms in terms of converting bids into new work. This is according to findings from a survey carried out in the early summer by Totum and US recruitment firm J. Johnson Executive Search. The research fairly quickly suggested that firms generally are enjoying rising levels of confidence in their approach to bids and tenders. Firms are using a huge variety of tools to support their pitches and they are increasingly bringing in specialist expertise, which seems to be supporting both insight into bids and win rates. But we wanted to go further. In this piece, we compare the responses we received from both UK and US firms to ascertain how similarities or differences in approach impact overall success. Respondent firms from the UK and US represented a relatively balanced mix of large (600+ lawyers) and mid-size firms (100-600 lawyers), although the US sample also included a proportion (13%) of smaller firms (up to 100 lawyers). Both also covered a range of job titles from manager up to director level, although there were slightly more senior respondents among the UK sample – 55% were ‘head of’ or director level, compared to 44% of the US respondents.
Balancing effort with reward
The first striking difference between UK and US firms, shown up by the survey, is that UK firms seem to work on more pitches than those in the US: 32% of UK
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respondents work on 10-14 proposals a month, compared to just 4% of firms in the US handling the same number. Similarly, 38% of US firms work on just 14 RFPs a month compared to 18% of UK firms (see chart right). Not surprisingly then, UK firms also seem to spend longer on their proposals – 43% of UK respondents spend at least 15 hours a month on their proposals compared to 27% in the US. And a significant minority in the UK (19%) spend over 20 hours a month on them – just 10% of US firms do the same. Investing lots of time in proposals isn’t necessarily time well spent. US firms may only be responding to the RFPs they think they can win, thereby avoiding wasting valuable effort. But the figures also suggest that the hard work is in fact paying off, as UK firms seem to enjoy a higher conversion rate than those in the US. According to
This article originally appeared in PM magazine. For further details go to www.pmforum.co.uk
the survey, 36% of UK respondent firms win 51-70% of their new client proposals compared to 15% of US firms. And nearly a quarter of UK firms (23%) enjoy a win
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rate as high as 71-90%. Only 12% of US respondents fell into this bracket. In fact, of US firms polled, 17% win less than 30% of their new client proposals, compared to just 4% of UK firms (see chart left).
Insight delivers results?
The higher success rate might not just be down to time spent on proposals either. Interestingly, 21% of US respondents said they ‘have no idea’ what their firm’s win rate is. Only 5% of UK firms claimed the same. Could UK firms be achieving a greater level of insight into their pitch activity that is enabling them to win more work? The survey certainly suggests UK firms do more in terms of communicating the result of pitches – 95%, for instance, track results, and 81% communicate results and log details. While 81% of US firms also track results, only 53% communicate them and 52% log the details. But UK firms also seem to get more out of other RFP tools too, which in turn may be supporting higher bid-conversion rates. Although all respondents said they used a wide range of tools, from design templates to dedicated RFP teams, a higher percentage of UK firms claimed easier access to nearly all. Not surprisingly, therefore, UK firms seem to be more satisfied with the tools
they use, with 36% of UK respondents describing them as ‘above average’ compared to 16% of US firms. And only 4% of UK respondents labelled their tools ‘below average’, compared to 16% of US firms. These processes and tools combined may well be having a positive impact on win rates.
Bringing in new skills
Where the US seems to lead the UK is in the use of pricing specialists. Of US respondents 39% involve pricing specialists in their proposals compared to 27% of UK firms. In addition, 22% of US respondents said those specialists sign off on pricing. Only 5% of pricing specialists in the UK do the same. This is despite the fact that respondents cite very similar price pressures – 64% of UK respondents and 58% of US respondents described pricing pressure as ‘strong’. Could UK firms be missing a trick here – especially as they may benefit from more specialised pricing support given that they are shifting more rapidly to alternative fee agreements (27% of UK respondents work on fixed pricing for more than 50% of their proposals, compared to just 8% of US firms)? We know pricing specialists are on the rise in UK law firms but in this respect at least they may be on catch-up with US operations.
For sure, there were very few firms that felt that they had got their RFP work completely right. In ranking the sophistication of their firm’s approach to bids and tenders, only 5% of US respondents gave their firm’s approach a top score of five out of five. No UK respondent gave such a high ranking. But on the whole, more UK respondents seem to think their firms are moving in the right direction, with 82% rating their firm either three or four out of five for RFP sophistication compared to 59% of US respondents giving the same rating (see left). Firms think that a combination of time, effort, tools and good communication and intelligence gathering processes is the right approach to winning more work. But, more importantly, it is borne out by the conversion rates: the firms that win a higher percentage of their bids appear to be those that are currently investing more in that approach. And that tends to be the UK firms. The difference between UK and US firms may lie with the relative sophistication of their marketing and business development (BD) teams: for some time, there has been a perception that UK firms are ahead of the US in this respect. Teams in the UK have grown rapidly and enjoyed increasing responsibility for growing new revenue streams. But the US is catching up – other research we have conducted shows that US firms (particularly global operations) are now investing considerably more, in BD in particular. The findings around pricing specialists also suggest that they are willing to try new skills and ways of working – they don’t just follow the crowd. That may soon impact the findings of a survey such as this. In the meantime, it seems that UK and US firms have both made huge advances in this important area. Processes across pitches are better defined, the tools more comprehensive and widely available and winning work has clearly become more of a team endeavour involving not just partners but experts from across marketing and finance teams too. There is more to be done on both sides of the pond, but the path to success is perhaps now clearer than it has ever been. Liz Chappell is a consultant in Totum’s marketing and business development team. She specialises in recruiting from Manager to Head of positions across professional services.
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