This article originally appeared in Legaltech News, here.
Everyone knows that requests for proposals put a lot of pressure on law firm marketing departments, but just how much can be surprising when you start putting numbers to it. On average, firms spend about 46 hours on any particular RFP or 4738 hours per year and it is costing the firm about $959,141.34 annually—but these numbers often swell on the higher end to over 100 hours on an RFP or $2 million annually.
When you take these numbers and consider that law firm win rates are around 18%, one may start wondering what can be done to improve this process.
It may come as a surprise that the outcomes of RFPs are the top metric firms use to measure the overall effectiveness of their department according to Thomson Reuter’s Marketing Partner Survey. At the same time, law firm marketing budgets shrank in 2023 (see Thomson Reuters State of the Legal Industry 2024) though revenue grew, overall, by 4.6%.
It’s really a perfect storm of challenges which is why we surveyed legal marketing professionals across the Am Law 100-200 to flesh out some specifics and, hopefully, propose some solutions.
Here’s what we learned.
In addition to the above numbers in terms of sheer hours and dollars spent responding to RFPs, the top priority of marketing and business development teams inside law firms is to increase their win rates (58.82%) and spend less time doing it (winning) (41.18%).
Firms, however, are spending a majority of the RFP response time on activities that don’t directly correlate to increasing win rates.
And herein lies the rub: if marketing is spending so much time and expense on RFPs, shouldn’t it be helping firms win more?
But Is It Helping Us Win?
While most firms (59.26%) firms believe that understanding client needs and requirements as well as the strength of existing client relationships are the greatest contributors to winning any particular RFP, that is not where time is spent during the RFP process.
The lion’s share of RFP response time is spent simply trying to find past work and relevant experience (42%) and reading past RFPs (31.43%)—despite the fact that over half (52%) of any given new RFP is duplicative and/or contains questions the firm has previously answered and firms are spending.
This effort of locating past work and past RFPs is the number one process bottleneck facing all law firms of any size, but it doesn’t stop there: it triggers a whole set of ensuing process bottlenecks, including an over-reliance on attorney input. Current systems put marketing and BD into the position of tasking their attorneys more, not less, during the RFP process.
Not only is this costly in terms of hard dollars but attorneys also face a series of tremendous market pressures of their own, including a significant decrease in demand and productivity. (see Thomson Reuters State of the Legal Industry 2024)
Where possible, attorneys should be directed towards billable hours, building client relationships, and adding value (ranked as “highly popular” and “highly effective” in their BD efforts by the attorneys themselves), not marketing tasks (which attorneys rank as highly “under-popular” and “not effective” by t). (see 2024 Marketing Partner Forum Survey).
RFPs: A Use Case for Generative AI
Generative AI has shown to be exceptionally adept at summarization, content aggregation, synthesizing and searching multiple answers–and doing so across a vast corpus of documents.
To that end, generative AI is a better-than-human solution to attack the top 3 process bottlenecks in the RFP workflow:
- Trying to find past work and relevant experience (42%)
- Reading past RFPs (31.43%)
- Addressing the duplicative questions/content (52%) of any given new RFP
Here’s what applying generative AI to the RFP process could look like:
- Reduce time spent by 90%. For example, if firms are spending approximately 46 hours per RFP, currently available gen AI tools can reduce time spent to 4.6 hours.
- Time allocation. Generative AI allocates back to marketing and BD at a rate of approximately 41.4 hours per RFP to spend more of the high value time marketing and BD professionals know makes the difference between winning and losing a proposal.
- Billable time allocation. Generative AI can reduce attorney time of 10.12 hours per RFP response (22%) to 1 hour per RFP response.
- Focus on winning work. Generative AI enables marketing and BD to focus on the high value efforts they know helps them win, including everything from spending more time understanding client needs and requirements, to crafting better, high value engagement letters.
- Create better outputs. Generative AI creates better-than-human outputs in terms of accuracy and brand consistency in proposals –in seconds.
Notwithstanding the existence of experience management technology, the power of generative AI is quantifiable to marketing and BD teams. If the department also has an experience management platform, these results are multiplied by these benefits:
- Offloads and streamlines attorney input by centralizing their relevant matters and expertise and making it accessible to marketing and BD.
- Removes the pain of the very “under popular” marketing work attorneys dislike and gives back of attorney work as well as freeing up more billable efforts, more time for the attorney to spend building client relationships.
Generative AI can reduce the hours spent from 46 -106 to 4.6 -10.6 per RFP and this includes the nearly 25% of attorney time spent on marketing activities they don’t even like doing in the first place.
Time is transformative—and that’s the give of generative AI.
Conclusion:
The business case for generative AI is becoming more and more clear to the market, and the application to the RFP process is one of the most salient to date. Generative AI provides a better-then-human solution for the precise workflow obstacles that are causing firms to spin their wheels on work that doesn’t produce results: brute search for past work and previous responses.
It materially impacts profitability and wins back time to marketing, BD and the firm’s attorneys to do of the high value work they were meant to do so they can win more.
Importantly, it’s not merely ‘wasting’ time that’s at stake. All of the professionals involved in RFPs—marketing, BD, attorneys—want to be doing the interesting, valuable and impactful work of understanding clients better. This shift has productivity benefits of its own and is the story of the value generative AI can bring to law firm professionals, not as a replacement tool, but as a true augmentation of intelligence.