Authors: Štěpán Štarha, Ján Kapec
Currently, the topic discussed in Slovakia is the efficiency of the procurement of legal services by the State. We learn from the media about budget savings associated with termination of unfavourable contracts, and at first glance it seems that only the lowest price offered by a legal service provider is the right evaluation criterion. However, when a person has a serious health problem, he/she is usually not looking for the doctor who will perform the cheapest operation, but the one who will do it best. We will explain why the same should apply when selecting legal services.
Did you know that the EU outsources legal services with a weight of only 30% price and 70% quality? In Slovakia, it is the opposite.
The Slovak Prime Minister has himself criticized in the media the use of external law firms by the State due to allegedly overpriced prices. At the same time, he has announced a plan to establish a “state law firm with the best lawyers”, which should represent state authorities in possible disputes. It is certainly true that the lowest price criterion is appropriate for supplies of generically and qualitatively interchangeable goods, in which a comparable quality of performance from individual suppliers (e.g. utilities, food, etc.) can be expected when specifying corresponding parameters. However, the question is whether it is also possible to procure in this way legal or consultancy services that the public sector procures from its external advisors, as their complexity goes beyond the normal agenda of in-house specialists.
If a client from the private sector decides on the selection of professional advisers, he is interested not only in the price of the services offered, but also in the method they are provided, the advisor’s references, the team composition, and the advisor’s specific knowledge and expertise. The client’s interest is primarily to achieve a 100% result in terms of the scope and quality of the service, while excluding or minimizing any future risks. This is clearly true of matters of great importance to the contracting authority, in which any possibility of failure must be minimized or ruled out (disputes over extremely high amounts and values or highly specialised activities). If the output of the ordered service is to be a professional legal assessment or recommendation in such a fundamental matter, it is quite clear what is the difference between the assessment or recommendation prepared by an average expert compared to that of a respected specialist.
In the end, paradoxically, the lowest hourly rate does not even have to mean the lowest total price that the client will pay for the service provided. If a lawyer is not a specialist in a specific legal area, then due to limited experience in dealing with a given type of cases, he/she is usually less efficient and the work itself will take him more time compared to a specialist. Therefore, the client can subsequently pay the same or even higher price for the legal service provided than in the case of another provider which, although it originally offered a higher hourly rate, will spend significantly less time addressing the matter. Therefore, in our opinion, it is not right to organise a tender for professional legal (or, in general, also consulting) services exclusively with a single criterion that is the lowest price.
The level of the price of professional services depends to a large extent on the costs of professionals working for a respective firm; the better employees such a firm hires, the higher the costs of their remuneration, which is also reflected in the price of the service. Therefore, it is desirable to select a legal counsel using a combination of a wider range of criteria, where the assessment of the quality of the service offered has much greater weight.
Only this solution will lead to the selection of the most cost-efficient solution. At the same time, such a solution will make it possible to eliminate the risk of selecting an insufficiently qualified or technically, economically, personally or otherwise equipped counsel for a given public contract.
Public contracts on the principle of the prevailing qualitative criteria (over the lowest price) are also awarded by European institutions, including the European Commission. The EU awards public contracts for legal services with a weight of only 30% price and 70% quality – in the Slovak Republic it is the opposite, while mostly 70-80% of the evaluation is the price and the maximum (if at all) remaining 30-20% is the quality.
The client needs a lawyer who will win the dispute at the end of the day, save costs or otherwise help him/her effectively when he/she has problems. If a person has a serious health problem, he/she is usually not looking for the doctor who will perform the cheapest operation, but the one who will do it best. Similarly, a prudent businessman primarily approaches experienced and capable professionals to ensure success in his/her matter and not to risk losses or reputational risks.
Top lawyers have a quality education and spend a lot of time on demanding transactions and cases. At the same time, the experience, knowledge and references of top lawyers are the “variable” that will help the client achieve a 100% result in terms of the scope and quality of the service, as well as time efficiency of its provision, while minimizing any future risks.
Unfortunately, a brilliant brain is not a measurable value that you simply put in the tender documentation. However, in law practice, it is the most important factor, together with loyalty to the client, encyclopaedic knowledge of the law, and the willingness to work hard, especially in cases where lawyers work for the State or the public sector.
