PERSUIT's Reverse Auction feature ensures you have obtained true market-value for any matter. You can set the level of visibility the firms get to see regarding their competition (rank, lowest price, all pricing), and they get the opportunity to compete for the work via a fair and transparent process. If you're thinking about enabling this feature, here are some recommended best practices to help you have a successful Reverse Auction.
How much time should I leave between the key timeline dates?
Publishing the Request --> Proposal Deadline: An average of five (5) business days.
- When a request goes out, we recommend giving firms an average of five (5) business days to respond if the matter allows. However, you can still use PERSUIT if you have a shorter window so select a firm.
Proposal Deadline --> Auction Start Day: Best Practice is to have at least one (1) business day between the proposal deadline and Auction Start Day.
- Your Proposal Deadline time should be when you are able to review and assess the proposals to ensure they are apples to apples, prior to the auction.
- If an RFP is due on a Monday, the Auction should be held on a Wednesday. The purpose of this review is to ensure that when the auction starts, the firms are fairly competing for the work under the same scope and assumptions.
How do I select an appropriate auction duration?
Generally, you want to keep auction duration short and concise. Once a firm has submitted their initial proposal, they have had a chance to consider all the issues and their proposed pricing. The Reverse Auction gives the firms more insight into price so that they can make an informed decision on how they want to revise their proposals. This assessment doesn’t take the firms a lot of time as they have already considered the substantial issues. Generally Reverse Auctions only need to be 30 min, however you may want to consider a long period if your matter involves any of the following considerations:
- Pricing Complexity - If the matter's pricing structure is complex (10+ pricing items / multiple components) you should consider setting the auction for 1hr +.
- Number of Participants - The more participants there are the more time you should give firms to digest the pricing information and revise their pricing.
- Visibility Setting - The more pricing data you are showing the more time you should give firms to consider and make adjustments. Rank and Price take more time than Rank Only.
- Global RFPs – If the firm is working with local counsel, and they will likely need to seek guidance from local counsel on their pricing to make a price revision, you should consider allowing the firms 48hrs.
What are the different auction types? What do firms see during auctions?
PERSUIT has three main reverse auction types to choose from, if you decide to enable the reverse auction feature. For all three auction types, firms will be blind to their ranking and price until the official start of the reverse auction. You can view more information on each reverse auction type and what firms see during auctions in this article.
If you would like to speak more in depth about how to strategically select a ranking type for a specific reverse auction, you can email our Legal Advisory team at firstname.lastname@example.org and a Legal Advisory Manager will get in touch with you.
What's the difference between Total Price and Comparison Value?
Total Price is a figure that is defined by the client. Often this is defined as the sum of particular phases or a different calculation that gives the client a good benchmark to compare firms at a high level. This is helpful when the client wants to utilize a specific reference in assessing the proposals. Instructions and assumptions on how to calculate the Total Price are typically outlined in the pricing section. If pricing items are revised at the phase level, firms and vendors should ensure that those adjustments are reflected in the calculation for the Total Price. This is particularly important during the auction and should be completed before the auction ends.
The Comparison Value is a figure that is automatically calculated based on the sum of all the pricing items. The comparison value does not sum hourly rates, rate cards, or discount %s. This simplifies the high-level comparison figure to a simple sum across the items and does not need to be recalculated or updated by the firms or vendors. The advantage of this figure is to allow firms and vendors to focus on the individual pricings items that make up the new Comparison Value.
What should I do between the key timeline dates?
The time between Proposal Deadline and Auction Start Date should be used to do an initial review of proposals - primarily focused on the pricing, assumptions and exclusions:
- Assess each firm's total price.
- Did any firm change the pricing model (fixed fee to budget estimate)?
- Review individual pricing items and subitems.
- Are there outliers or firms who did not follow the directions?
- Did any firm add additional subitems or not calculate fees correctly?
- Are there particular assumptions taken by firms that you agree with or disagree with? Should clarifications be issued to firms based on these assumptions?
When is the best time to hold a reverse auction?
Reverse auctions should be held during standard business hours.
What happens after a reverse auction ends?
When an auction ends, firms are no longer able to revise their proposals. You can view this article to find more information on what you can do next.