Request for Proposal Legal Counsel to Serve as Fiduciary Counsel May 2017 1
STATE UNIVERSITIES RETIREMENT SYSTEM REQUEST FOR PROPOSALS FOR LEGAL COUNSEL TO SERVE AS BOARD FIDUCIARY COUNSEL (Please reference the Fiduciary Counsel RFP in your responsive proposal.) I. SUMMARY The State Universities Retirement System of Illinois (SURS) requests proposals from private lawyers or law firms to provide fiduciary counsel services for the SURS Board of Trustees and the System. Minority-owned, women-owned and disabled-owned firms and individuals are encouraged to apply. SURS anticipates that the contract to be awarded will be a five-year contract. II. AGENCY DESCRIPTION SURS is the administrator of a $19 billion cost-sharing, multiple-employer public employee retirement system established July 21, 1941, to provide retirement annuities and other benefits for employees, survivors and other beneficiaries of those employees of the state universities, community colleges, and certain other state educational and scientific agencies. SURS services 61 employers and approximately 230,000 members and annuitants. The plans administered by SURS include a defined benefit plan established in 1941 and a defined contribution plan established in 1998. SURS is governed by an 11-member board of trustees that includes four elected members, two elected annuitants and five members appointed by the governor, of which the chairperson also serves as the appointed chair of the Illinois Board of Higher Education. SURS is funded by participant payroll deductions and annual employer contributions provided by the state of Illinois. By statute, SURS is defined as a body politic and corporate and is governed under Articles 1 and 15 of the Illinois Pension Code (40 ILCS 5/1, 5/15). A copy of SURS most recent (as of June 30, 2016) Comprehensive Annual Financial Report (CAFR) is available for review, or to download, at www.surs.org. III. SERVICES REQUIRED This position will be expected to: A. Provide advice and counsel to the SURS Board of Trustees and staff on matters involving fiduciary obligations, especially as they relate to plan administration and investment manager selection and retention. B. Provide advice and counsel on real or potential conflict of interest situations. C. Be knowledgeable concerning Articles 1 and 15 of the Illinois Pension Code (40 ILCS 5/1, 5/15) and other applicable state and federal laws (e.g., ERISA, ADEA, Investment Company Act of 1940, Investment Advisers Act of 1940, Securities Exchange Act of 1933/1934)), the Open Meetings Act, the Freedom 2
of Information Act, the State Officials and Employees Ethics Act (5 ILCS 430/), SURS administrative rules, SURS benefit provisions and SURS administrative review process. D. Attend quarterly meetings of the board of trustees, as well as interim meetings of the board and the board s Investment Committee. E. Represent SURS staff in matters that are appealed to the SURS Executive Committee. F. Represent SURS in litigation, as requested. G. Have knowledge of the legislative process in Illinois and be able to assist the SURS Board of Trustees and staff in responding to proposed legislation that will affect SURS members and annuitants and assist SURS staff with drafting legislation requested and approved by the board of trustees on an as needed basis. H. Provide such other legal services and advice as may be requested by the SURS Board of Trustees and staff on an as needed basis. IV. ELIGIBILITY REQUIREMENTS Minimum eligibility requirements: The law firm or attorney(s) must have been in business for a minimum of 10 consecutive years. Each attorney must currently be in good standing with the Attorney Registration and Disciplinary Commission of the Illinois Supreme Court (ARDC) and must have not been subject to disciplinary proceedings under the ARDC within the past five years. The individual(s) assigned to SURS as lead attorney(s) must be admitted to the Illinois Bar and have a minimum of 10 years of relevant legal experience. Relevant legal experience must include past or present representation, as fiduciary counsel, for one or more governmental public pension systems or funds. Preference will be given to those firms or individuals who have the following qualifications: past or present experience serving as fiduciary counsel for an Illinois retirement system or pension fund; past or present experience litigating cases in Illinois state court or federal courts on behalf of an Illinois public retirement system or pension fund; past or present experience reviewing and/or drafting legislative proposals involving the Illinois Pension Code or any statute impacting Illinois public retirement system or pension fund administration; past or present experience advising the boards of Illinois institutions of higher education, the boards of local community colleges, the Illinois Board of Higher Education or the Illinois Community College Board; 3
are firms that will help SURS meet its aspirational goals to utilize businesses owned by minorities, females and persons with disabilities pursuant to Section 1-109.1(10) of the Illinois Pension Code (40 ILCS 5/1-109.1(10)). V. PROPOSAL CONTENTS Any firm or attorney responding to this RFP must submit its proposal via email in one electronic document. A specific outline must be followed in order to facilitate SURS review and evaluation of the responses received. A response to this RFP must include the following sections in the order listed: 1. Transmittal Letter; 2. Executive Summary; 3. Expressed Understanding of the Services Required; 4. Qualifications to Meet the Required Services; 5. Levels of Coverage for Legal Malpractice Insurance and any other Professional Liability Insurance; 6. Detailed Fee Schedule and Cost Projection; 7. Responses to the Questions set forth below. VI. RFP QUESTIONS A. Background: 1. Briefly describe your firm s background, size, and history pertinent to the requested services in this RFP. Indicate which office will service SURS. 2. Within the past three years, have there been any significant developments in your firm such as changes in ownership or restructuring? Do you anticipate any significant changes in the future? If so, please describe. 3. Has your firm or any attorney in your firm s employ ever been disciplined or censured by any regulatory body? If so, describe the principal facts. 4. How does your firm identify and manage conflicts of interest? 5. Are there any potential conflict of interest issues for your firm in servicing SURS? If so, describe them. 6. Within the last five years, has your firm, or a partner or attorney in your firm, been involved in litigation or other legal proceedings relating to the provision of legal services? If so, provide an explanation and indicate the current status or disposition of the proceedings. 7. Does your firm represent the board of trustees of any other pension (public or private) plan? If so, list the full name, address and telephone number of each of 4
the pension plans and telephone number of the executive director and general counsel. 8. List any professional or personal relationships your firm s attorneys may have with any trustees or staff members of SURS. 9. List all attorneys you would expect to render legal services to SURS if your firm is engaged to serve as fiduciary counsel. Are any of the attorneys listed, pursuant to this question, rated by Martindale Hubbell? If so, provide the Martindale Hubbell rating for each. 10. Describe your legal team s experience with similar work performed for other public pension clients. 11. Identify the key attorney who will be the primary contact and lead counsel in providing services to SURS, whose continuing status as such is an essential element of any contract. Please describe your firm s backup procedures in the event one of more attorneys assigned to SURS leave the firm. 12. Has any pension plan represented by your firm been engaged in litigation during the past three years, other than collection proceedings brought on behalf of the plan? If so, without disclosing any information that is not a matter of public record, describe the nature and cause of the proceedings, the course of the litigation and the outcome if completed. B. References: Provide client references for whom your firm has performed work similar to that requested in this RFP. Provide each client s in-house counsel s (or, if none, CEO s) name, address and telephone number. C. Previous Clients: Identify all public sector clients who have terminated their working relationship with you in the past five years and a brief statement of your understanding of their reasons for doing so. Provide each such client s in-house counsel s (or, if none, CEO s) name, address and telephone number. 5
D. Insurance and Liability: 1. What limitation on liability, if any, do you impose through your contract? 2. Describe the levels of coverage for legal malpractice insurance and any professional liability insurance your firm carries. List the insurance carrier(s) and each carrier s rating by a nationally recognized service. 3. Describe your firm s disaster recovery plan and facilities. E. Fees: Describe in detail the billing rates, practices and policies of your firm that would apply if your firm is engaged to serve as fiduciary counsel. F. Appendices: Appendix A Biographies Include biographies for all attorneys listed in your proposal. Indicate what year each attorney joined your firm and describe his or her position, current responsibilities, areas of expertise, experience, education, professional designations and memberships, and relevant publications and presentations dealing with the representation of public pension clients. Appendix B Sample Contract or Agreement Attach a sample contract or agreement your firm uses for governmental pension fund legal services. G. Other Information: Describe any other processes, and provide any additional information, that you believe to be relevant to this RFP and your capability to provide the services requested. VII. CONFLICTS OF INTEREST The law firm and/or attorney(s) chosen must provide SURS with written assurance that no conflict of interest will exist between SURS and other clients. 6
VIII. PROPOSAL SUBMISSION In order to be considered for selection, proposals must be received via email in Adobe Acrobat or Word format by Ms. Karen Nyi at knyi@surs.org no later than 4:30 p.m. (CDT), on Monday, May 19, 2017. Please reference the Fiduciary Counsel RFP in your proposal. An email will be sent confirming receipt of the proposal. Proposals will be confidential during the selection process. Upon completion of the selection process, all responses, including that of the firm or individuals(s) selected, will be a matter of public record. All materials submitted in response to the RFP become property of SURS. Proposals remain confidential during the selection process. However, upon completion of the selection process, all responses, including that of the individual or firm selected, will be a matter of public information and will be open to public inspection in accordance with the requirements of the Illinois Freedom of Information Act, 5 ILCS 140/1, et. seq. If, in response to this RFP, trade secrets or commercial or financial information are furnished under a claim that they are proprietary, privileged or confidential and that disclosure of the trade secrets or commercial or financial information would cause competitive harm to the person or business responding to this RFP, such claim must be clearly made and such information must be clearly identified. (5 ILCS 140/7 and 7.5) Responses to this RFP with every page marked as proprietary, privileged or confidential will not satisfy this requirement. Bidders are required to make a good faith attempt to properly identify only those portions of the response that are truly furnished under a claim that they are proprietary, privileged or confidential and that disclosure of the trade secrets or commercial or financial information would cause competitive harm to the person or business responding to this RFP. Redacted Version of RFP Response: In the event Responder believes certain materials in the submitted response are exempt from public disclosure in accordance with language in this section, Responders are asked to provide a redacted version of the response it believes will be suitable for release under the Illinois Freedom of Information Act (5 ILCS 140/7 and 7.5) However, any claim of privilege from disclosure is not definitive. SURS has the right and legal obligation to determine whether such information is exempt form disclosure under the Illinois Freedom of Information Act and no information will be considered or determined by SURS to be proprietary, privileged or confidential unless it is identified and/or separated as indicated herein. (5 ILCS 140/7 and 7.5) IX. AGENCY CONTACT AND SELECTION PROCESS Prospective respondents who may have questions regarding this RFP may email Ms. Karen Nyi at knyi@surs.org by May 8, 2017. Please reference the Fiduciary Counsel 7
RFP in your communications. The question(s) (without identification of the questioner) and the answer(s) will be emailed to all parties who have contacted Ms. Nyi via email indicating interest in responding to the RFP and will also be posted on the SURS website. Following a review of submitted materials, selected firms should be prepared to make a presentation in Champaign, Illinois on or around June 5-9, 2017, if needed. All costs of responding to the RFP, including any travel expenses incurred, are at the cost of the responder. Rights Reserved. This RFP does not obligate SURS to complete the RFP process. SURS reserves the right to amend any segment of the RFP prior to the announcement of the selected legal counsel. In case of such amendment, all respondents will be afforded the opportunity to revise their proposals to accommodate the RFP amendment. SURS reserves the right to award all, part, or none of this contract and may award contracts to more than one law firm or individual if deemed appropriate and desirable. SURS also may, at its discretion, issue a separate contract for any service or groups of services included in this RFP. SURS may negotiate additional provisions to the contract awarded under this RFP. Objective of the proposal evaluation process. The evaluation process will be structured to secure highly skilled, diligent, responsive and experienced professional personnel who will be effective in providing the high quality of legal services that SURS desires. The primary objective of the evaluation process is to select a firm or individual(s) that: clearly demonstrates a thorough understanding of the scope of the engagement and the specific responsibilities entailed; possesses adequate resources to handle assigned responsibilities and to handle extenuating circumstances that may arise; assigns highly skilled, experienced, diligent, responsive and professional personnel to perform the required duties; maintains high ethical standards and reputation; is competitive in terms of fees; and has no conflict of interest existing between SURS and other clients. X. SCHEDULE The following schedule may be changed if necessary. If this schedule changes, affected responders will be notified by mail. In no event will the dates listed below be changed to earlier dates. RFP issuance on: May 1, 2017 Written questions from respondents must May 8, 2017 be received by: 8
Answers to written questions will be May 12, 2017 disseminated on: Proposals due: May 19, 2017 by 4:30 PM Central Daylight Time XI. RULES REGARDING CONTACT Please note the following Quiet Period Policy establishing guidelines by which the SURS Board of Trustees and SURS staff will communicate with prospective service providers during a search process. The quiet period for this RFP began on May 1, 2017. Initiation, continuation and conclusion of the quiet period shall be publicly communicated via the SURS website (www.surs.org) to prevent inadvertent violations; All board members, and SURS staff not directly involved in the search process, shall refrain from communicating with potential service providers regarding any product or service related to the search offered by the provider throughout the quiet period and shall refrain from accepting meals, travel, hotel, or other value from the providers; Throughout the quiet period, if any board member or SURS staff member is contacted by a potential service provider, the board member or SURS staff member shall refer the provider to Ms. Karen Nyi as the assigned SURS staff member who is directly involved in the search process; All authority related to the search process shall be exercised solely by the relevant committee or board as a whole, and not by individual board members; All information related to the search process shall be communicated by SURS staff to the relevant committee or board as a whole, and not to individual board members; The quiet period does not prevent board approved due diligence, client conference attendance or communications with an existing service provider that happens to be a provider in the ordinary course of services provided by such service provider; however, discussions related to the pending selection shall be avoided during those activities; The provisions of this policy will apply to potential service providers throughout the quiet period and shall be communicated to providers in conjunction with any competitive proposal process; and 9
A potential service provider may be disqualified from a search process for a violation of this policy. 10