The Winmark 2012 Looking Glass Report (available here) identifies some of the key challenges faced by General Counsel in major corporates, and their knock-on impact for the law firms who aspire to serve them.
Two themes to emerge among the General Counsel surveyed were a strong desire, first, to increase their strategic influence in their organisations and, second, to maximise the value delivered by their in-house legal teams. These are no mean tasks in an era of squeezed budgets and increasing regulatory complexity. Naturally, GCs expect their external lawyers to play a significant role in helping them achieve these aims.
As the report points out, if they are to do so, law firms need “to move beyond reacting to client demands by proactively addressing operational activities” (my italics).
Definitely. But what does this mean in practice? I believe there are two main dimensions to this issue, one cultural, the other structural.
First, it requires firms to have a mindset that is:
- Forward-thinking, and
Effective client service teams need a deep appreciation of the commercial context in which their in-house clients and their organisations operate. This ability to contextualise their technical, legal expertise in a way that resonates with General Counsel is an increasingly important aspect (and differentiator) of firms’ service delivery. As is the ability to scan the horizon, on behalf of their in-house clients, to help them identify opportunities early, on the one hand, and pre-empt problems, on the other.
I recently worked with a client engagement partner whose knowledge of one of his insurance clients is truly spectacular. He knows the organisation’s tax and legal structure inside-out, makes it his business to be absolutely on top of internal client developments via regular senior management meetings and by “walking the floor” at their offices. He and members of his team sit on industry working parties and keep their ear to the ground to sniff out acquisition and “white label”opportunities that might be of interest to the client. Day in, day out.
Moreover, he maintains a comprehensive and current grasp of his firm’s service lines. He meets regularly with service line leaders to understand their service offerings, and to discuss their potential relevance to his client. His aim is simple: to ensure that the full breadth and depth of the firm’s expertise is brought to bear on Client X’s behalf.
His ability to deliver truly effective (and, I should add, high value-added, highly profitable) client service by harnessing the firm’s collective expertise is outstanding. A clear case of the whole being greater, much greater, than the sum of its parts.
This highlights the importance of a key trend identified in the Winmark report: the shift in the relationship between in-house legal teams and their external advisers. As more organisations move to formalised legal panel arrangements the in-house-external lawyer relationship is changing from being individually-based to institutionally-based. Perhaps the days when the efforts of an outstandingly client-focused engagement partner are enough to sustain a client relationship are numbered? I think they are. Why?
Because demonstrating a firm’s ability to think and act as a unified whole requires more than energetic, client-focused partners. If firms expect to win and retain high value, sophisticated clients in future they need to embed client-centric thinking and practices across their business on an industrial scale.
This demands, above all else, a truly collaborative culture. One that transcends the client service limitations inherent in the two-dimensional (Service-line x Sector) and three-dimensional (Service-line x Sector x Region) matrix management models operated by most large professional service firms. One in which the sharing with one’s peers of information and ideas about a client is second nature. And it requires, too, the second – structural – element I referred to above. Namely, a well-developed business intelligence and key account management infrastructure that facilitates collaborative thinking and coherent service delivery.
All this sounds blindingly obvious. But remember, for a moment, Accenture’s iconic 2010 TV ad, “Shark“, which asked “Is your business in shape to compete?” A great question. How many firms can, hand on heart, say that their business intelligence capabilities and key account processes ensure that:
- Internal developments in key account clients and targets are comprehensively and continually monitored;
- Knowledge of clients and targets held in various parts of the business is shared and available across the firm;
- External factors relevant to key clients’ and targets’ businesses are tracked on an ongoing basis;
- Responsibility for gathering, disseminating and considering that intelligence on a timely basis is clearly allocated; and that
- Key account heads have a comprehensive understanding of the nature and breadth of the expertise available within the firm and, equally important, seek out ways of harnessing that expertise for the client’s benefit?
These questions focus solely on understanding the client. They don’t even touch on the issue of service delivery alignment.
In order to compete effectively firms must first maximise their knowledge of their clients and targets before they can realistically expect to shape and deliver solutions that are both fit for purpose and profitable. This has, of course, always been true. The 2012 Looking Glass Report is a timely reminder that deep knowledge and understanding of one’s client, and of one’s own capabilities, is the bedrock of a successful BD strategy.