I was on the train from York to London last Wednesday morning, sitting next to a lady who was diligently scribbling notes onto an RFP document, and I couldn’t help but smile to myself as her colleague proceeded to vilify all procurement professionals the world over as unpredictable, unfathomable, picky and impossible to please. Apparently deep into a tender response that was due on Friday, they went on to discuss how they’d better not give the client any opportunity to disqualify them and someone had better spell-check it properly this time. (Should just say at this point that they were discrete enough not to mention who they worked for or were tendering to…)
It struck me as a great theme for this month’s blog – how not to aggravate an extremely picky, unfathomable procurement person…I may now work exclusively with law firms but I still have a long list of procurement peeves that I help firms try to avoid!
So, in no particular order…
1. Surprised GCs
GCs hate surprises. They’re very rarely good news and words such as ‘unexpected challenges, ‘over-estimate’, ‘additional costs’ and ‘out of scope’ feature highly on the list of dislikes! In my experience, GCs invariably pass surprises to their procurement lead to sort out, and I’m sure you can imagine the conversation. Speaking to procurement first rather than going straight to the GC will allow framing of any request or bad news with appropriate budgetary analysis and help mitigate the response, facilitating quicker resolution.
2. I spoke to the GC yesterday and they said…
A sure-fire way to aggravate procurement immensely, as they then have to go to the GC and check whether they’ve properly understood all of the implications of that conversation, and deal with any financial or timescale impact. Not only is the GC cross at having to have the conversation twice (and wasting time), the firm could be seen as having inadvertently (or perhaps purposely) been trying to undermine the GC/procurement relationship. As with the previous peeve, approaching procurement first will lead to quicker, less painful resolution.
3. ‘The scope changed...Robert knew…’
See the notes under (2) above...In organisations where procurement helps to manage legal spend, they are invariably involved in the financial approval of matters over a certain value, from initial budgeting to bill analysis and processing. If not kept informed about scope changes that have a financial impact, procurement can’t manage the systems level changes that will make sure the approved expenditure matches the actual bills.
Assume that Robert’s told anyone from finance about scope change at your peril...and be prepared for delays in settling your invoices.
4. ‘Yes, we can do that for £20k ‘(when you know it’s going to cost you £40k)
Procurement, like legal firms and GCs, know that value doesn’t necessarily mean lowest cost. Underbidding to win work doesn’t do anyone any favours, and too low an estimate causes suspicion that a firm hasn’t understood the scope properly or that the client isn’t going to get the ‘A-team. Client’s really don’t mind paying a reasonable fee for high quality work. Just today I read a tender document that said ‘comparatively low bids will need to be justified and subject to a further discussion’. Be prepared to have an honest pricing conversation and say 'no' if the work isn’t profitable enough – a well-reasoned, polite refusal won’t be held against you.
5. ‘We can’t estimate at this stage…’
To enable budget approval there needs to be some sort of estimate, even if it’s caveated heavily. At the very least it serves as an audit trail that work was appropriately approved, and without it, a purchase order can’t be created, allowing you to be paid. Working closely with procurement to come up with a sensible estimate for challenging matters will allow client stakeholder management and messaging within the legal team and finance. They will have knowledge of the internal budgets that will ultimately ease approval and payment.
6. Late billing & debt
Many organisations sign up to the Prompt Payment Code, and aged debt together with late invoicing affect their performance.
http://www.promtpaymentcode.or...
Stick to the payment terms you’ve agreed at the outset of a matter and bill on-time, to help organisations pay within terms. Critical to this is ensuring you’ve followed the client’s expenditure approval processes BEFORE the work starts, have a Purchase Order number, and deal with any billing queries promptly. Managing billing issues is a poor use of partner and client legal team time, so get your finance team to work with procurement to proactively manage billing and debt.
Leaving it to chance causes a lot of extra work for the client in managing overdue bills when budgets may have been released on old matters, and cost-centres closed. A quarterly aged debt review is an effective, proactive way to manage any issues, and it will positively impact your balance sheet! Be easy to do business with.
7. Inaccurate and/or incomplete management information (MI)
My pet hate. As part of a panel or firm management role, sophisticated legal procurement will reconcile a firm’s spend reporting with internal reports from the account payable systems, and create management information that details comparative spend across all providers, detailing value add and progress against savings targets. Late, inaccurate and incomplete MI makes this process much more difficult. No-one wants to be the firm whose contribution is under-represented…
8. Poor RFP responses…ATQ & no weighty tomes!
Consider the pile of 20 RFPs that the evaluation team needs to read in their entirety, precis for the GC and FD, and score. Sound painful? Overly long answers with key points hidden, pricing that says ‘10% discount from headline rates’ but doesn’t calculate them, and the occasional mention of another client’s name do not help a firm’s chances of scoring well. Be concise, use every word well, and answer every question. Make your financial proposition clear and easy to compare with other contenders. I always had an evaluation criteria about ease of doing business…
Of course, not all organisations have procurement teams to assist the legal function, but then the peeves aren’t really exclusive to procurement. Consider them common sense tips to avoid unduly aggravating those picky, unfathomable individuals amongst us…
Steph Hogg
Senior Procurement & Bids Strategist (ex FTSE 100)
M: 0044 (0)7772 761 154
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