The CFO of a leading PE firm was frustrated by their large outside counsel spend on deals and fund formations. It wasn’t clear what exactly they were paying for – and if they were getting good value.
As their rates began to rise, the CFO began to question if the rates were reflective of the quality of the work and if they could receive better rates from other firms for the same type of deals.
Using Bodhala’s Benchmarking Suite, the PE firm was able to utilize Internal Benchmarking to aggregate their historical spend data from their top 6 panel firms to compare their rates and overall costs by work/deal type – M&A, Fund Formation, General Corporate, and Litigation. Internal Benchmarking also provided more visibility by allowing them to measure and understand their firms’ discount structures, as well as historical write offs by work/deal type.
Using Bodhala’s Market Benchmarking data from competitive firms doing similar work, they were able to compare rates to a relevant cohort of firms in each practice area – Tier 1 M&A, Tier 1 Fund Formation, Tier 2 Litigation, establishing leverage for rate negotiations.