Wednesday, September 12, 2012

Law Firm Proposals on the Rise

Key findings about law firm proposals and RFPs, taken from a new LexisNexis survey on legal marketing and business development practices, are highlighted below:
  • Overall, firms are responding to an average of 5 to 16 proposals each month. As expected, larger law firms are engaged in a higher volume of RFP activities than their counterparts in smaller firms. Although 68 percent of firms are handling an average of 10 or fewer RFPs every month, it’s a different story at the high end. 15 percent of respondents are juggling more than 21 activities each month, which equates to a run rate greater than 250 proposals a year.

  • 42 percent of respondents saw an increase in RFP activity at their firms over the past 12 months. An identical 42 percent believe the volume of RFP activity has stayed the same.

  • Responding to RFPs, pitches and proposals puts a strain on practice resources. While some 46 percent of RFP responses can be handled with fewer than 20 hours of effort, that total also means the majority of work takes even more time. The survey selections topped out at 40+ hours per RFP response, a category that still garnered 7 percent of the replies.

  • Based on all the replies, the average hours-per-proposal figure increased with firm size … ranging from 19.6 to 25 hours. Interestingly, this question also earned a relatively high “don’t know” response rate of 22.6 percent. Although the survey audience could address volume and growth rate questions, they were unaware of the amount of effort required from the firm to handle that workflow.

  • By combining average RFP volumes and average hours-per-proposal, it’s possible to assess the growing impact of these kinds of activities on legal firms. For smaller sized firms, the lower proposal count and hours required per response still adds up. On a yearly basis, it totals 1,175 hours of effort which is enough to fund more than half of a full-time equivalent (FTE) employee. For the largest firms, the average yearly total came to 4,800 hours, representing 2.3 FTEs.
About the Survey

The online “LexisNexis InterAction RFP Activity Survey” was conducted between July 23 and August 3, 2012, and included more than 350 total responses. Survey participants were asked to provide basic demographic information on the size and location of their law firm and to answer questions designed to quantify the time and resources dedicated to proposal generation efforts as well as any year-over-year change in law firm involvement in such efforts.

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