Proper Proposals

Last year Exelon Corp. launched a massive RFP process to contract its outside legal service providers for 2008 through 2011. Forty-four law firms received invitations to participate, and 42 submitted proposals. In the end, the utility company rewarded 35 firms with positions on its preferred providers list.

“The RFP allows us to consolidate most of our outside legal work with a limited number of preferred provider firms that understand our company’s businesses and legal needs, are recognized as experts in their practice areas and provide Exelon with substantial discounts from their customary rates,” says Sandra Byrne, a legal administrator for Exelon.

This RFP attempt was Exelon’s third in six years. The company has a policy to regularly conduct these large-scale RFPs to streamline its outside counsel list, cut costs and find top-quality service providers. But using RFPs for the practice of convergence—reducing the number of outside law firms with which a company works on a regular basis—isn’t their only purpose. Take for example Votorantim Investimentos Industriais, a Brazilian holding company. Last year its legal department sent out about 20 RFPs for various projects, averaging three per project.

“The use of RFPs is effective for acquisitions, bond issues, large corporate transactions and mass litigation,” says Alexandre D’Ambrosio, the company’s general counsel. “We prefer not to have exclusive relationships with law firms, so the process helps us avoid the perception that we have favored the selection of certain firms for personal reasons.” Although Exelon and Votorantim use RFPs, their processes and purposes are different. This contrast is a microcosm for the varied opinions on RFPs, from those that see it as a tool for convergence to those that see it as a tool for special projects.

For more see InsideCounsel.com and prior posts on the subject of RFPs

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