National Firm Gains 33% Reduction in Permanent Withdrawal Fees and 22% Monthly Savings on Outsourcing Contracts in Dual RFPs

The Background

With more than 1,100 lawyers and consulting professionals in 24 offices worldwide, this firm is a leading business and litigation practice with global reach. As is the trend with many successful large firms, this particular one had undergone a merger in 2009 with an established Atlanta-based firm.

Previously with the Atlanta-based firm, the newly named Director of Firmwide Vendor Relations engaged immediately in an office supplies Open Request for Proposal (RFP). As to her new title and role, the Director of Firmwide Vendor Relations comments, “Every law firm should have this position. It provides the ability to really dig down deep into projects the COOs don’t have time to address.”

This Director belonged to a professional networking group of Directors of Administration in Washington D.C. When she began the office supplies RFP, she reached out to her network for consultancy references. A few firms were recommended to her, upon which she performed her own due diligence; through that process, she selected Mattern for the office supplies project.

The Semi-Open Offsite Records and Open Outsourcing RFPs

Having seamlessly tackled the office supplies RFP, the Director of Firmwide Vendor Relations decided to take on two highly complex and nearly simultaneous RFPs: offsite records and outsourcing.

At that time in 2009 (and in part due to the merger), the firm had a total of 8 offsite records vendors and additionally maintained their own offsite storage facility. Multiple inefficiencies existed by way of managing multiple vendor contracts without co- terminus expirations as well as tracking various pricing structures detailed on complex, 20-30 line item invoices. To ensure billing accuracy, efficiency, and consistency, the firm identified the need to streamline vendors and desired to engage in a complex RFP process.

At the same time in regards to the firm’s outsourcing (and also in part due to the merger), they were engaged with 4 different facilities outsourcing vendors, 6 different equipment providers, running on 3 different equipment platforms, and operating an outdated cost recovery system. The firm set goals to standardize the equipment and software throughout its domestic offices, creating efficiencies for traveling attorneys and staff. Additionally, the firm wanted to capture the cost savings of consolidating vendors and leverage its size in order to negotiate better terms and pricing while right- sizing their duplication equipment.

“Mattern had performed well on the office supplies project,” explains the Director of Firmwide Vendor Relations, “so it was natural to keep them in the mix when we moved forward with the next two projects: offsite records storage and outsourcing. However, I always do my due diligence, and as with the office supplies, we received a few proposals from various vendors for the new projects. After careful review, the firm awarded both projects to Mattern.”

With regards to their offsite records contracts, the firm defined the main, long-term goal as reducing its permanent withdrawal, or hostage, fees. “The storage of legal records is extremely complicated with multiple layers of rights and permissions involved. The firm stores approximately 300,000 boxes of files in various offsite facilities, and the hostage fees were the most burdensome element when considering our needs to consolidate and achieve better pricing and terms through leveraging the firm’s size.”

Mattern performed an analysis and price justification and moved forward with an offsite records, semi-open RFP with the 8 incumbent vendors. Mattern provided the data and assisted the firm in narrowing the field of competing vendors. The Director remarks, “Every firm needs someone that has the expertise and ability to drill down into levels that most people don’t even think about. Mattern provided us with benchmarks that weren’t available to us. Vendors come back with numbers, but if I do not have access to the most current benchmarks, what good are those numbers?”

With regards to the firm’s outsourcing, the management team recognized that through the merger process, unique workflows existed at the individual, regional offices which needed to be respected and preserved as much as possible. For instance, two of the regional offices were not currently outsourcing personnel while several others were; some offices desired increases in hospitality services, others did not.

Mattern began this multi-layered outsourcing RFP by implementing end- user surveys and visiting all of the regional offices to compile the information. At the same time, Mattern’s consultants performed a detailed analysis of every machine and site. This was done against the backdrop of industry benchmarks as well as a detailed headcount analysis.

The Director of Firmwide Vendor Relations continues, “In both cases, Mattern remained neutral throughout the entire process. They provided the analysis as well as the necessary flexibility that assisted in consolidating our contracts while maintaining the integrity and autonomy of our regional offices.”

The Results

When the firm moved forward with the outsourcing open RFP, it was sent to a total of 7 facilities vendors including 4 of the incumbent vendors, one of which was for equipment only. The firm identified a short list through the process, and ultimately awarded the new contracts to two vendors with one of the new vendors gaining the equipment contract for the majority of the firm’s 19 US locations as well as labor in 11 locations, and a second, regional vendor selected to provide labor in 5 of the firm’s other offices.

As a result, the firm will realize 22% per month in savings for their outsourcing contracts; there will be 2 regional offices previously with in-house labor that will now be outsourced; and the financial incentives offered to the firm allowed them to cover costs of removing the existing equipment, terminate leases, and implement a brand new cost recovery system firm-wide. Sufficient flexibility was also achieved through the process for offices to add or delete hospitality services depending upon need.

All of the firm’s scan routing will be performed with the new cost recovery system, including scans to their DMS and financial and practice management systems. Mattern’s consultants will oversee the implementation of labor and multi-functional devices.

At the end of the offsite records semi-open RFP, the firm ultimately selected 4 of the incumbents, keeping their in-house facility, two regional incumbent vendors, and one primary national vendor who will be taking over new business for the largest offices. The firm gained contracts that will keep prices fixed over the next ten years, realized 25% in monthly savings, and streamlined their vendors and contract terminations.

Most importantly to the firm, however, was the achievement of their main goal: they were able to reduce the permanent withdrawal fees by 33% with better terms and conditions for future negotiations—and, the winning vendors will be paying the withdrawal fees. There will be net zero cost to the firm to end its current agreements.

The Takeaways

In the final analysis, the Director of Firmwide Vendor Relations concludes, “I don’t think you can do projects of this scale by yourself. It’s hard work that requires enormous amounts of background analysis. When I think of other firms that claim to be able to conduct projects such as this themselves, I don’t see how they can. What COO or facilities person would ever have the time to do this? It’s simply a great deal of work and there just are no shortcuts. An unbiased consultancy such as Mattern providing the data your firm needs to make the decisions in its best interests is an invaluable partner to have in this process.”

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