A 10 Point Guide to Legal Counsel’s RFP Response

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A 10 Point Guide to Legal Counsel’s RFP Response

Abhishek Mathur | September 2014

Amajor portion of business attained by Information Technology (IT) services companies flows througha response tothe RFP (Request for Proposal) documents issued by potential customers. The Legal team’s response plays an important part of it.RFP response forms the bedrock of the contractual relationship between the service provider and the Customer. For many inhouse legal counsels (Counsel), RFP-response forms a core part of their job responsibility. This article is intended to list the key points to be borne in mind for a crisp and legally sound RFP response.

Know the RFP-type & the Customer’s business
The response should be modelled to suit the RFP type. Restrictive RFPs have certainclauses which are statutorily applicable and are non-negotiable. These, should be flagged in the internal risk matrix. As a Counsel, it is imperative to underline the key offerings’ relevance in the contract.One key aspect to analyse this is to understand type of Customer’s business and the industry it caters to. For instance, a local telecom player is likely to be more focused to regulatory compliance, than a multinational software service provider, who might place intellectual property rights as their focus area.
Mark the Deliverables
The Counsel’s response should be based on an astute analysis of the success rate and risk taking appetite of the delivery teams in that particular business segment. A bad attrition record of a particular team, say in a manpower deployment agreement, should trigger an appropriate response to the clause which asks for guaranteed deputation-term of named personnel. All deliverables and SLAs need to be vetted and verified by the solutions and finance teams as well. Counsel should watch out for any hidden risks such as Step-in rights or penalties or fixed price clauses hidden in a time and materials agreement in a particular statement of work.
Ensure correct process flow
The Counsel should ensure that all the Deliverables as required by the RFP and as proposed by the service provider have had the necessary procedural approvals. Counsel, through internal communication should ensure the delivery unit’s approval of the work to be carried out for the Customer.
Don’t forget Key Clauses
Any clause which potentially has a financial and risk implication should be responded to with a proper justification andalternative of the change suggested. Without a viable option, even a friendlycustomer may not accommodate the Counsel’s request. The Indemnification Provisions, Limitation of Liability, Termination Rights, Governing Law& Dispute Resolution, Intellectual Property Rights, Penalties and SLAs are some of the key clauses which should be carefully responded. As and when required, latest laws and judgments should be referred.
Prepare for Negotiations with the customer
Negotiations should be meticulously planned. Each point to be discussed should be marked clearly in the discussion document. There should be clarity on the fallback position to be adopted by the Counsel in case the Customer is not ready to accept suggested changes. To this effect, timeline expectations, both internal and external, should be laid out clearly in advance. A good practice is to prepare a task sheet with a point of contact listed against a specific task and the date of task completion should be identified.
Give timely feedback
The Counsel’s job is to remove all riskclauses in the contract and replace them with acceptable alternatives. However, this is easier said than done and we all know that any business is inherently risky. The Counsel should carefully selectthe clauses to fight for and clauses toforgo. Upon the completion of the negotiationstages with the Customer, the risks should be flagged in an internal document and the response proceeds to the next step.
Follow the approval mechanism
The Counsel should be well versed with the respective internal stakeholders and the business unit decision makers. The exceptions report or the final approval clause matrix should be circulated amongst the approvers and their approval be noted, with respect to the relevant clause.
Make precise changes
Based on the response received after the three stages described above, the Counsel should carefully make changes in the contract document to be submitted to the Customer. This contract is often a part of the business team’s Best and Final Offer.
Preparing the final product
All decision makers e.g. the Regional business heads, Finance head and the Counsel’s functional head should be immediately informed of the final document. The final risk matrix should be sent as well, so that the management is aware of what it is signing in for. This matrix document helps decipher the risk profile of that Customer, business segment and the geographical region of operation.

“The Counsel should be well versed with the respective internal stakeholders and the business unit decision makers. The exceptions report or the final approval clause matrix should be circulated amongst the approvers and their approval be noted, with respect to the relevant clause.”

Sharing best practices

This refers to making a note of the lessons learnt during the contracting process and sharing it with other team members/counsels to learn and pickup correct verbiage and contracting clauses. This is a task if done properly, this yields reliable results and makes a consistent contracting practice.

Many organizations have their standard positions stated internally for almost each clause touched in an RFP. However, the legal response to RFP and the subsequent contracting process still remains a delicate art. The undercurrent of any legal response should be to be as business friendly as possible without breaking the legal tenets.

About Author

Abhishek Mathur

Based in the New Delhi office, Abhishek Mathur is a Junior Associate in the Litigation Team of Dhir & Dhir Associates. He has completed his LLB from Symbiosis International University in the year 2019 and holds a diploma in Competition Law from National Law University, Delhi. His area of interest and expertise lie in Banking and Insolvency Laws, Intellectual Property Law and Competition Law. He regularly represents clients in an array of matters before various Courts and Tribunals including DRT, DRAT, NCLT, NCLAT, High Courts and the Supreme Court.