When we last left our intrepid band at St. Michael’s Episcopal Church interviewing law firms for advice on the church’s vacant, crying-out-for-development, corner lot (here’s the original column), we had just finished meeting with firms. Since then we sent out a very brief RFP and we’ve now heard back from all candidates.
Each of the three firms received the same one-page “Scope of Work” from us, which asked for a memorandum addressing these questions (I summarize and condense):
- What square footage is buildable as of right on the church’s property?
- What variances or permits could increase that figure?
- What’s the cost, timing, and odds of success of each potential variance or permit?
I’d like to be able to say the firms’ report cards have improved, but I can’t. Perhaps you can; I’ll let you be the judge.
Firm A’s response thanked us for considering them “for your land use matter” (nothing succeeds like the personal touch) and then listed, or trumpeted, their credentials:
- One of the largest practices in New York in real estate
- Did they mention they focus a lot on real estate?
- With very high quality clients
- And went into some detail on the background of the partner who heads up the land use practice group, although that individual’s degree of involvement on our matter was left somewhat murky.
After that, it was straight to the rate card, with a 15% discount off standard “rack rates” offered right off the bat.
Firm B’s response was quite similar, focusing on their credentials and reputation, and then the rate card.
Neither firm even alluded to alternative fees.
You may be asking yourself—perhaps you’ve done it yourself—what’s wrong with focusing on one’s credentials and the size of the practice group? What am I objecting to? Even more pointedly, what should I have expected?
Bruce, how would the committee have considered this response?
“Thank you for considering us for your project. Your property is in the R7-2 district, which allows medium-density residential use up to 3.44x the lot area. So if your lot is 30,000SF you can build a little more than 100,000 SF of total area. Your property is also subject to the EC-2 overlay which allows limited commercial use of up to 2x the lot area. This is part of, and not in addition to, the allowable building floor area. There are several ways to achieve floor area bonuses. Undertaking the professional responsibility to evaluate your chances of success on each is more than we can do in this proposal; we are willing to prepare a memo with the alternatives and likely costs and chances of success, in a form that your board can read and discuss, for a fixed fee of $______. Based on our conclusions and your time and budget, your board can then decide whether and how to pursue the project.”
Not to rub the point in too much, but if some guy (me) a couple of thousand miles away can identify the church’s zoning district and the base regulation in five minutes from the city’s zoning website, each of these three highly experienced firms should have one or two people on staff who can do it even faster.
Sadly, I agree with your committee member’s comment. Simply put, none of these firms care about your matter, not at this proposal stage and most likely would not care at the matter stage (should any of them get hired).
Ironically the most honest is Firm C – who basically says that hiring us is a license to abuse the client/law firm relationship. (No caps on bills. We staff who we want without telling you beforehand, etc.)
As you covered in part one, a firm even sent out an ill-prepared partner to pitch the business. It is telling you “Our business development/sales strategy is so poor (and we don’t care to change it) that we are willing to take a partner away from billable work for a pitch that has almost no chance of winning. But please have confidence in us handling your matter without reservation.”
I’d be interested in the aftermath. Would any of the rejected firms come back and ask how they could win the work the next time?
Crickets…
I understand from a business development perspective why you believe that these firms’ responses fall short, but have you thought about the potential conflict issues? It is not about giving free legal advice, bu the fact that if a firm responds to the questions posed, it increases the risk that they would be viewed as having entered into an attorney client relationship over these specific issues even if they were not later retained. Think of this scenario – one gives some off the cuff advice. Suppose it is wrong. It is possible that Firm A could be sued for malpractice even if they were never retained. But let’s suppose the advice was very good, that the site was great for development if x or y were obtained. But Firm A was not retained, but the church went ahead with someone else who obtained x or y. Now Big Developer client is interested in developing the site and approaches Firm A. But church, being very ethical, objects claiming that Firm A may not represent Big Developer adverse to the church on the same set of facts over which Firm A gave free legal advice. Firm A is conflicted out over its free advice. Sounds unlikely? It happens more often then you think in large firms.
I’m not saying that happened in this example, but giving free legal advice in a pitch in a circumstance where there are a limited number of experts and that if a firm fails to obtain the representation on one side, it is likely to obtain the representation on the other, is one where a complex calculus of values needs to be taken into account.
Hi and thanks for your thoughts.
I very much see the points you are making, but I wonder if a thoughtfully worded response from the firm might not take care of the situation–with all but the most irrational and misguided of potential clients, which I assure you St. Michael’s is not. Caveat: I’ve never been a law firm GC and I’m scarcely an expert on the niceties of professional ethics, but:
Finally, I have a somewhat more metaphysical reaction to the scenario you posit, where a firm purposely and consciously chooses to be nonresponsive in order to protect itself against some (IMHO) far-fetched potential liability that would require improbable and irrational behavior by adults down the road. And that reaction, as a client and as a human being, is along the lines of what in the vernacular might be politely expressed as “Puhleeze.”
Agreed. Not prohibited ethically and very likely not prohibited by even a conservative GC or firm policy, which are typically honored more in the breach any way.
Ultimately, an hour or two of work should have been all that was required (though I defer to others as I am utterly ignorant of RE). Any mid to senior associate worth their salt should have been able to step in, with perhaps a 5-10 min review by the partner. This is what associate BD budgets are for, at least in theory.
That this didn’t happen tells us that it might not have just been arrogance/laziness of the partners involved, e.g. 1) they jealously guard clients and won’t let an associate step into this kind of client-contact role; 2) they don’t have an associate they trust; 3) no associate was willing to kill 2-3 hours for the benefit of the firm. Sounds like a big firm to me, no?
In engineering or applied science, one would distinguish a Request for Qualifications from a Request for Proposal. Any document that included a Scope of Work would be recognized immediately as an RFP, and if it asked for a specific presentation (e.g., a memorandum on three topics), that would be read as a mandatory element of a response. Even without direction, the proposal would present its technical approach and a task structure to reach such conclusions as are needed. Ordinarily the technical approach and task proposals would refer to relevant experience used to support assumptions in the approach and often would include references that Client is invited to contact. The Proposal includes key personnel and makes a corporate commitment that they will be available at the level-of-effort designated, unless renegotiated. A cost estimate is considered mandatory, and if Client asks for it in alternative forms, that is how the Proposal responds. The standard engineering bid, even when time-and-materials is the basis, documents a Proposed Cost Not to Exceed Without Prior Written Approval. All these would be thought mandatory elements were the proposal to NIH or NSF for research, or to a mining company for construction of a dam.
All three of these replies, as described would be deemed Non-Responsive. This is your committee-member’s response. Companies that think there is too much competition to make the prospects of winning worthy of a serious reply decline to propose; naïve odds of 2:1 would discourage no one who is willing to work for the specific Client.
Worth considering (I often advise this to Clients when I am operating in support of the Owner): a list of critical elements (e.g., understanding of the problem; specific prior experience; team qualifications; technical approach; cost; schedule …) with weighting factors. Among other things, the results of such scoring are helpful to losing bidders who want to know how they could have done better and how they might improve their future proposals.
My take on the issue is that the three question sin the RFP asked the respondent to do actual work that they want to be paid for, just to get the information developed for submitting the proposal. So, they went into sales mode.