Opportunity: This Am Law 100, West Coast firm has over 700 attorneys across 15 office locations. The firm had been in a lengthy relationship with its vendor for services provided for its back office, word processing and MFD equipment at its 7 domestic locations. Over the past year, the firm had negotiated directly with the vendor in an attempt to reduce costs, improve contractual terms and improve the current management team. Overall, the firm felt it had been overpaying for services received and that its contract was not up to market standards.
After achieving limited success on its own, the firm elected to bring in Mattern to conduct an open request for proposal process.
Solution: A review of the services by Mattern revealed that they were being performed well.
As part of the solution, Mattern outlined the objectives; increase efficiencies, improve pricing and terms, negotiate a contract that was flexible and in-line with the firm’s future plans, as well as ensure that the service provider had a clearly stated management team in place to address firm needs. Additionally, the firm wanted to wrap in a review of the MFD equipment since certain equipment was tied into costly leases. Thus, the focus of the Request for Proposal (RFP) was on contract terms, management plans, and efficiencies, all provided at a competitive cost for both labor and equipment.
Mattern did a complete on-site assessment of MFD equipment, outsourced labor and word processing services at each of the firm’s staffed offices as well as the off-site location where word processing operations were housed (eight locations in all). This included a comprehensive review of the outsourcing vendor’s MFDs, staffing levels, workflows, and processes. Additionally, Mattern interviewed the firm and the incumbent vendor staff to document all aspects of operations from execution to impressions of how operations were either successful or unsuccessful.
Based on this evaluation, and utilizing its industry knowledge, benchmarks, and long history with law firm operations, Mattern made several recommendations for the firm’s consideration that presented savings opportunities that ranged from 12% to 27%. Mattern recommended staffing and operational improvements in each office to increase efficiency. Mattern also recommended contractual improvements to bring the firm up to the standards of the Mattern Method benchmarks. Importantly, Mattern also felt the firm could bifurcate labor and equipment in order to maximize savings as an option. Mattern then collaborated with the firm to create a uniquely tailored Request for Proposal that addressed the firm’s areas of concern.
Result: The RFP process yielded several viable providers all with competitive bid and after a careful review, the firm elected to retain its current provider. However, the firm decided against awarding the incumbent provider both labor and equipment. This was done for several reasons, including the firm’s desire to maintain flexibility with its labor contract and to pursue a more comprehensive equipment approach separately from labor. Thus, the new agreement was a labor-only contract. With the new agreement, the firm gained substantial benefits, including:
- Right-sized staffing configuration
- Backfill allowance
- Untrained staff and staff underage credits
- Significantly improved terms and conditions, including Firm approved clauses regarding non-solicitation and severance
- Inclusion of National Account Program with executive sponsorship
- Guaranteed meeting requirements (monthly, quarterly, annually)
- Ownership of all non-MFD equipment
- Penalty based service level agreements
- Contract term-length suited to the firm’s long-term strategy
Through the Mattern process, the firm was able to enter into a contract that guaranteed it would receive the attention required all while decreasing month-to-month costs in excess of 20%. Mattern was also retained by the firm to oversee implementation for the project, as well as the on-going monitoring of the contract for the implementation phase.
Part II Equipment RFP:
The equipment RFP was sent to two vendors representing three different equipment manufacturers. After numerous rounds of pricing, onsite equipment demos overseen by the Firm’s IT staff, the Firm chose the same equipment platform it had under its previous outsourcing contract. The savings is projected to be 67% while obtaining 20% equipment flexibility, service response times backed up by penalties, and quarterly scorecards.