½ of Law Firms Woefully Behind in Marketing Tech

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Technology provides a clear advantage. You can see more of what matters and target your resources with precision. All CMOs dream of technology prowess. BTI research reveals just over half of CMOs dream of the basics—foundational tools to drive BD. AI and advanced analytics will have to wait until CMOs get what they need now, including:

1.      An Experience Database

27% of law firm marketing leaders dream of an experience database. These CMOs want to know what the firm has done (and when) so they can pitch clients with relevant and detailed experience. They want a summary of the work, the impact, the industry, the practice, the attorneys—and the outcome. All this is to support the proposal and BD effort and build systematic, easy-to-access knowledge. Some forward-thinking CMOs dream of linking this data to winning proposals to pinpoint experiences resonating most with legal decision makers. Lofty, but a future enhancement.

2.      CRM

As we discussed 3 weeks ago, client relationships are the lifeblood of any law firm. 25.5% of CMOs say the ability to map and learn about these relationships is their top technology need. They want to track down the firm relationships so they can pitch a team who knows the client and can garner institutional knowledge. CRM is also one of the few tools enabling CMOs to use past activity to inform the future.

The 2 building blocks of marketing infrastructure above make up over 52.5% of 169 CMOs’ wish lists across law firms. Ideally, firms looking for CRM will use systems with a self-populating feature.  

The CMOs who already have the experience database and CRM in place have a completely different point of view. This lucky group is wishing for a wide variety of technology, performance, and productivity boosters including:

BD Tracking and Analytics

Revenue-driving CMOs want to know a lot more about BD. Most firms only track BD hours in aggregate across the firm. Some high-performing firms track BD efforts with both existing and new clients. But 9% of law firm marketing leaders want to track how much time partners are spending on specific pitches. They want to know what is paying off. And, they are trying to spot the high performers early on.

Web Analytics

Some CMOs want to track their website’s performance, lead generation, and content usage. They want to use digital analytics to inform their campaigns and drive more focused content. They also want to know: where is the traffic coming from? How often do clients and prospective clients visit? Where do they go and who are they? These are just a few things these digitally minded CMOs wish for.

Tech Integration

Most organizations struggle with this. How to make the technology work in unison—one interface, one platform, one intelligent set of high-performance data.

Data Analytics, AI, and Everything Else

Only 5% of CMOs are looking for data analytics and AI, while 8% are looking for competitive intelligence tools. A small number are looking for project management and proposal software.

Thanks, But No Thanks

The biggest surprise is 12% of law firm marketing leaders say their tech wish list is blank. They are fine with what they have.

Technology Troubles? Don’t Be Worried—Yet

The great thing about technology at this stage is firms who still need the basics are not out of the game yet. You can easily leapfrog those in front of you with a clever strategy and the right technology. But, waiting too long will put you too far behind to catch up. Better to find a way to act now—while you can still jump out in front.

MBR

Holy S*#T – BTI Just Turned 30, It’s a Brand New World

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When does a company consider itself founded? When you leave your day job and start working full time on your new gig? When you ask your attorney to file the papers? When your attorney actually files the papers? When you pay the fee and get the stamped paper saying your business is a corporation? I have been told the answer may just be situation-specific.

Well, in this case, BTI completed all these things in the second week of August 1989. The papers were stamped August 11, 1989. This means The BTI Consulting Group is officially 30 years old – no matter how you twist it. In full disclosure, the first iteration of BTI was BTI Management Inc., who transferred the assets and became The BTI Consulting Group 2 years later.

But not to worry – despite 30 being the age where some people start slowing down – I feel like we are just getting started again. Look for new research, new offerings, new branding, and a new website – and a host of adventures to get things rolling. It is just as exciting today as it was 30 years ago.

We have more than 30,000 client interviews under our belt, more than 300 projects, and count the best run professional services firms in the world as our clients. We have learned a lot and plan on sharing this over the upcoming year – keep a watch out for a seasoned and well-informed perspective you haven’t seen before.

My personal thanks to all of our clients, friends, supporters and soon to be clients for your support and enthusiasm. It is truly an honor to work with you. A special thanks goes to Mrs. Mad Clientist.

We welcome your ideas on adding new things to our repertoire as we begin our journey into year 31 and beyond.  

 MBR

What the 26 Firms in the BTI Power Elite Do Differently

Aggressive client-facing initiatives—the one reason why 15 firms are new to the BTI Power Elite 2019. These firms are acting on a targeted set of high-impact strategies—with teeth behind them. The BTI Power Elite are driving their client service and client development initiatives further than all other law firms. This includes:

Adopting and posting relationship strength and client service performance indicators

The firms with the best client relationships rely on powerful indicators to track strength and momentum. These indicators include:

  • Client service performance—quantitative and qualitative measures—including BTI’s 17 Activities Driving Superior Client Service

  • Net effective billing rate by client (total fees collected by total hours billed)

  • Client retention annually for each major client

  • Annual and 3-year growth for each major client

  • New business generated from each existing major client

  • Number of practices delivered

  • Meetings to discuss issues outside of current work

  • Self-assessment by the lead relationship partner

  • Number of new client needs

  • Number of unsolicited proposals submitted

  • Net effective rates from unsolicited proposals

These indicators look at the client relationship from all angles, including client service and business development. BD is important because the best relationships grow. The financial indicators are essential as you make more money, and enjoy the higher productivity, resulting from strong relationships. An increasing net effective rate can also be a leading indicator of a strengthening relationship.

Training in client relationship development

The BTI Power Elite don’t leave much to chance. These firms train their attorneys in client service—some splitting into beginners and advanced. In most firms, attorneys learn from each other—but training ensures all the attorneys are working with the best knowledge base and strategies.

These same firms also train their attorneys in business development. BD skills not only generate revenue, they also build client relationships and keep competitors out.

Adopting client service standards across the firm

Client service standards define how attorneys interact with clients. These are the rules of client engagement. The standards govern communication, project management, client visits, and the steps to take to better understand your client’s business. These standards define excellent performance for all to understand—including clients. Client feedback is the most effective tool in serving as the basis for developing client service standards—this ensures the standards speak to client expectations and demands.

Enforcing client service standards in a meaningful manner

Client service standards are just nice promises without a meaningful commitment to meet these standards. The typical BTI Power Elite firm has tools to enforce the client service standards including:

  • Self-reporting of the activities and deadlines defined by the standards

  • Internal publishing of activities

  • Client feedback to rank firm performance in the client service standards

  • Performance audits by attorneys and/or staff

Advanced client teams

The BTI Power Elite rely on highly developed client teams going beyond the typical client team. These advanced teams develop long and short-term client plans. The team has a clear leader accountable to the client, with designated lieutenants.

The client is part of the team—providing input into certain aspects of the plan such as staffing, strategic objectives, budgets, billing protocols, communication protocols, and defining business risk. Larger clients also take part in law firm led strategic planning for the legal department. The best firms deliver all this in a coordinated, highly orchestrated manner. Everyone works together.

Large-scale systematic client feedback

The typical firm leader conducts an average of 12 client interviews per year. The BTI Power Elite firms conduct between 30 and 150 or more. One conducted 40 interviews at a single client. Client feedback doesn’t just inform—it drives action, improves performance, and engages clients. The benefits of larger-scale client feedback initiatives are vast. They include:

  • Generating ⅓rd more business per client with their top 50 clients than other firms

  • 35% higher client retention

  • More than double the fees from a single client

  • 7% rate premiums across all staff levels

Adopting and training attorneys in client communication protocols proven to improve relationships

You can’t have a strong relationship without strong client communication. These firms define the most critical aspects of client communication including:

  • Matter start up

  • Scope changes

  • Budget changes

  • Staff changes and additions

  • Invoicing

Your communication around these issues can make or break any client relationship. These firms provide sample dialogue, case studies, mock client discussions, and tools such as meeting outlines to ensure meaningful and timely client communication. This robust communication drives client confidence and, in turn, drives higher rates and stronger relationships.

Using activity-based metrics in addition to quantitative metrics to change and improve partner tactics to build deeper client relationships

Activity-based metrics define behaviors known to produce good outcomes. Examples of activity-based metrics include:

  • In-person client meetings to discuss issues

  • Taking a client facility tour

  • Offering unsolicited proposals

  • Conducting CLEs

An activity-based metric ensures attorneys are engaged in the most effective and impactful behaviors. We recommend providing a menu of proven activities and ask each attorney to pick 2 they are comfortable with. Provide the training and the tools, ensure the attorneys implement in a timely manner at 2 of their top clients—and watch client relationships start to strengthen and grow.

Adopting any of the strategies above improves client-facing performance. You are best served by investing big in a smaller, but targeted list. Each of the strategies above brings big impact. Not every firm in the BTI Power Elite is doing everything here, but each is deeply invested in a few strategies—and a few is all it takes. Learn more about these firms in the newly released BTI Power Rankings: Client Relationship Scorecard.

We have advised, designed, and helped implement some of the best client relationship-building programs in the world. I am happy to talk these through with you.

MBR

The 26 Law Firms with the Best Client Relationships

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Client relationships are the lifeblood of any law firm. Not just clients—but client relationships. Anyone can pick up cases—but building an ongoing relationship with robust energy and a continuing stream of work is hard. Very hard—but more than worth the effort.

The law firms with the best client relationships enjoy better performance than all others. This includes large firms, mid-sized firms, and small firms. Show me a firm with strong relationships (not matters but recurring relationships) and I will show you a high-performing firm.

BTI probed more than 650 top legal decision makers about all aspects of their law firm relationships. This enables us to dissect the strength and potential of each client relationship. No law firms submit clients and we don’t suggest names. The law firms and nature of the relationships all come solely from clients.

Latham & Watkins enjoys the strongest relationships of all law firms. This helps explain their meteoric growth and profits. The firm has been working at it for more than 10 years and has always been ever so close to the top—now the crown of best rests with Latham.

Jones Day, Skadden, Davis Polk, and Gibson Dunn round out the top 5. Mid-size firm Kramer Levin comes in at number 10—proving you don’t have to be a mega firm to have the best relationships. (Willkie with 700 attorneys comes in at number 28 to further bolster this argument.)

Some law firms have really upped their game in the 2 years since our last report, as 15 of the 26 firms in the BTI Power Elite are new this year. Please join me in congratulating the following 26 firms for developing the best client relationships of all law firms:

1.     Latham & Watkins

2.    Jones Day

3.    Skadden

4.    Davis Polk

5.    Gibson Dunn

6.    Morgan Lewis

7.     Akin Gump Strauss Hauer & Feld

8.    Arnold & Porter

9.    Jenner & Block

10.   Kramer Levin Naftalis & Frankel

11.   Cooley

12.   Pillsbury

13.   Paul, Weiss

14.   Kirkland & Ellis

15.   McGuireWoods

16.   DLA Piper

17.   Covington

18.   Dechert

19.   Sullivan & Cromwell

20.  Hunton Andrews Kurth

21.   White & Case

22.   Dentons

23.   Reed Smith

24.   Weil

25.   Morrison & Foerster

26.   Irell & Manella

The BTI Power Elite have more of the strongest relationships than any other firms. But they too have to look behind them.

Clients identify 34 law firms showing substantial underlying strength—BTI Power Players—who are right behind the BTI Power Elite. The Celebrities are the 9 firms garnering exceptional mindshare and clients are inclined to use them for substantive work. We found 27 trusted law firms (The Special Forces) are poised for special situations. These firms have more core relationships than 70% of all other law firms—but earn fewer unprompted recommendations—clearly an opportunity to boost client service and earn more business.

We found 188 law firms with the opportunity to truly leverage their client relationships into something bigger and stronger. The Underdogs are fighting all the firms above—but everyone likes a comeback story—so clients are not only likely to notice but are likely to embrace the new performance you can bring.

As we discussed last week, the law firms who know their position outperform those who don’t. Your standing with clients defines your strategy, the level of investment, and the effort required for success. You can map yours now in the just released report BTI Power Rankings 2016: The Client Relationship Scorecard—including a ranking in each of the 18 industries.

You can assess the strength of your firm’s client relationships through BTI’s in-depth client feedback—and use it to improve client strength and revenue.

MBR

Based on more than 650 in-depth interviews with top legal decision makers conducted between March 2017 and April 2018.

Clients See 8 Types of Law Firms in Today’s Market

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Clients use anywhere between 12 and 41 law firms, on average. Small and mid-sized clients use 12 or so. Some large clients easily go over 100 or more. Of these law firms clients use, only 10 are in the sweet spot—considered core by legal decision makers. This number drops to 5 at smaller clients. And even among these core providers, distinct differences can tell you whether or not your client relationship will stand the test of time.

First, let’s look at how GCs manage their outside law firms:

The Primary Providers

Clients turn to these law firms first when a new legal need arises. Clients consider these firms their most valued and trusted providers—and as a reward, these firms split the lion’s share of a client’s outside counsel spending. Clients rely on between 2 to 4 primary providers in total. Each wants to be the top primary provider. And with good reason: this is where the best, most complex, and highest-rate work lives.

Secondary Law Firms

While not in the primary seat, these firms still boast strong client relationships and receive a significant portion of external legal spending. In fact, the primary and secondary law firms combined account for 80% of a client’s total spending with law firms.

The secondary firm can be a great opportunity or potential risk. You can be auditioning for a primary spot – or be a fallen primary.

The Rest of the Law Firms

The last (and largest) group of law firms on a client’s roster are the firms where the relationships are the weakest. These are the firms handling specialized work (i.e., in highly specialized areas of expertise or geography-driven cases) with few points of leverage.

Success demands you understand the strength of your client relationships—especially the relationships you have with each of your most important clients. Your position dictates the best strategy for building stronger and better client relationships.

The combination of your positioning as a primary or secondary firm, and your client’s investment in your firm, drives your strength. BTI asked more than 650 top legal decision makers about where each of their law firms stands and who they recommend to peers—this tells you exactly where you stand. The analysis reveals 8 categories of law firms. These include:

BTI Power Elite

The 28 firms enjoy the absolute strongest client relationships; positioned for long-term organic growth and substantial inbound lead flow. These firms have the most primary relationships and are the first unprompted firms to be recommended to a peer. The BTI Power Elite have the best of both worlds—and these 26 firms have more of these relationships than any other firm—offering organic growth and inbound leads.

BTI Power Players

These 34 firms have a large number of strong client relationships—but not quite as many as the BTI Power Elite. The BTI Power Players are within shouting distance of the BTI Power Elite—with the potential to unseat Power Elite firms to gain more market share and clients.

Contenders

Current relationships are strong and have the underlying strength to be much stronger. These 45 law firms can harness the skills around their strong client relationships and jumpstart growth to develop a larger number of the strongest client relationships.

Celebrities

The Celebrities are the firms clients love to recommend; their recommendation rates far outpace the number of core relationships these firm enjoy. These 9 firms garner exceptional mindshare and clients are inclined to use them for substantive work. Their challenge is to develop these clients into more business to earn the strongest relationships. You can see by the small number of firms in this group— this is a unique spot from which to grow.

Special Forces

These are the 27 trusted providers clients call in for special situations; these firms have more core relationships than 70% of all other law firms—but earn fewer unprompted recommendations. Clients see their role as specialized and targeted—the Special Forces law firms have the opportunity to build on this trust to broaden the relationship. But, like the Celebrities—success demands a strong dose of business development and gaining the coveted unprompted recommendation. These firms have more strength than most.

The SWAT Team

The team to call to get the job done; these firms have functionally driven core relationships, but an absence of unprompted recommendations. Like the Special Forces, clients know they can rely on these 9 firms—their challenge is to build these into ongoing relationships through a combination of client service and business development—often delivered hand-in-hand.

Underdogs

These 186 firms are the firms clients love to root for; they have the potential to rise through the ranks if they can increase their share of core relationships. Success calls for serious and systematic business development initiatives – this would include BD training for client-savvy partners, client service training for all other partners, and a healthy dose of client feedback to detail exactly where to improve performance, spot opportunity, and better bond with clients.

Everyone Else

These firms are missing top legal decision makers’ radars when it comes to meaningful client relationships. They may be doing work but are in more of a functional or task-driven role. This can be a bit deceptive because a task at a large company can generate substantial fees—but they have a muted future. These firms can identify themselves as they will have high client turnover, high business development costs, and lower realization. The firms can start on the path to a stronger, more enduring relationship by targeting their best clients, getting feedback, embracing client service, and putting business development out front as a top priority—as the chances of new complex work finding its way to a firm in this group are low—even through RFPs.

Outperform Everyone Else

Firms who know the strength of their client relationships outperform everyone else. These knowing firms are the only ones who pinpoint the client development strategy best suited to their clients—and can drive it forward using the right skills at the right time. Everyone else has to guess.

You can assess the strength of your firm’s client relationships through BTI’s in-depth client feedback—and use it to improve client strength and revenue.

You can also see where you stand in the BTI Power Rankings 2019: The Client Relationship Scorecard—to be released August 1, 2019.

MBR

Based on more than 650 in-depth interviews with top legal decision makers conducted between March 2017 and April 2018.

CMOs Stress Levels Surge

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CMO Stress Levels Surge

Business is good. The best it’s been in recent memory. So, what’s the worry?

2019 marks the first time a large number of CMOs tell us the external factors are just as stressful as the internal issues. These law firm marketing leaders see outside threats and opportunities as being equal to the challenges within their firms.

My 30 years’ experience shows strategic changes are afoot when external and internal issues equalize. Let’s start with the newest and fastest growing stressors:

The Stress of the Future Soars

Perceived threats from The Big 4 moving into law (EY, PwC), legal technology, AI, and retaining clients caused an 8-fold increase in worries about the future. In fact, the future has become the top stressor. 24% of CMOs, up from only 3% last year, say the stress comes from their law firms’ apparent lack of concern about these issues. These CMOs don’t see a plan or anyone working on a plan with any sense of urgency. They see clear and exposed threats, and feel as if they, alone, are concerned about these issues.

CMO Workload

Just over 23% of law firm CMOs say workload is growing faster than their staff can scale. This is up from 20% last year. It seems business growth is driving new demands and needs—causing clients to hire new law firms. This brings more RFPs—especially in the Am Law 100. And, almost all law firms are changing their approach to marketing. The added coaching, staff training, and planning for new strategies are additive to the everyday job responsibilities for a CMO—pushing stress levels higher.

And Those Empty CMO Slots Are Causing Undue Stress

A number of high-profile law firms are operating without CMOs, Kirkland and Debevoise to name a couple. While it doesn’t impact current CMOs directly, it raises the open question of the need for CMOs in law firms. This is causing stress as it strikes at the existential need for such a role.

Some law firms like to give the impression they don’t have a CMO, but somebody is running the Marketing and BD show. These firms attract some good press and in an odd twist, attract a large number of good CMO candidates who want roles at firms with empty slots. Expect these roles to be filled—and a few more to open up.

Show Them the Money

15% of CMOs feel serious pressure to show their value. These CMOs are often forced to rely on murky metrics and face partners who take credit for any marketing wins. An over-focus on results leads to demoralization, stress, and burnout. It also prevents strategic thinking. Not good for these CMOs or their firms.

Not Worrying Causes CMOs to Worry

Complacency is the leading cause of sleepless nights for 20% of CMOs. They see lack of urgency spreading as their firms enjoy increases in business. Profits are strong, so there is little motivation to make things better. These CMOs tell us their firms believe strong profits cure all ills and prevent future problems—or at least underpin a lack of concern for future problems. 

CMOs give advice on how to deal with stress and pursue opportunity here. It’s worth another read and helps put things into context. And as any stress management teacher will tell you, stress is a sign you recognize something has to change—and can be helpful to our firms and ourselves when managed well. It’s not always easy to frame it this way—but it helps to remember.

MBR

Based on our survey of more than 160 marketing leaders, conducted between November 2018 and June 2019.

Law Firms with the Best Pitch

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It’s your moment. You are asked to come in and pitch. The typical company will ask 14 law firms to respond to an RFP. Next, they ask 3 to 8 to come in and pitch. Your chance to make your compelling case is here. And, out of these pitches—clients say a mere 20 law firms really stand out as giving a great pitch. All the rest sound the same —or worse.

So…who are these firms and what makes a truly great pitch? Let’s start with the second part of this question. Clients tell us a great pitch:

  • Starts with a discussion of the business or goals—not the law firm’s statistics

  • Asks questions and engages clients

  • Provides some unique high value snippet of insight into the company

  • Offers up partners with great executive presence

  • Gets into deep discussion of approach and strategy

  • Places their feet clearly on the ground

  • Goes off script and discusses any topic—and gets back quickly if they can’t

  • Looks so natural they must have rehearsed it 100 times

The message: talk about the client, unequivocally; be confident and candid; be practical and know something meaningful about the company. Success demands more of a change in behavior than skill. Clients tell us law firms just love to start a pitch talking about who they are and how many times they have done what you need—and clients already know this. Or, your insight and demeanor will show clients everything they need to know about your experience.

Please join me in congratulating these 20 law firms who clients say deliver the absolute best pitches:

Akin Gump Strauss Hauer & Feld

Arnold & Porter Kaye Scholer

Cravath, Swaine & Moore

Dentons

Dinsmore

DLA Piper

Greenberg Traurig

Jones Day

Latham & Watkins

Locke Lord

Norton Rose Fulbright

O’Melveny

Orrick

Paul, Weiss

Shumaker, Loop & Kendrick

Skadden

Venable

Wachtell, Lipton, Rosen & Katz

Weil

White & Case

MBR

1 Big Bad Boogeyman Adds to 3 Other Nightmares Keeping GCs Up at Night

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I have never heard a top legal decision maker talk about being blindsided in my 30 years of talking to clients—until now.

100s of top legal officers echo this same sentiment and suffer loss of sleep as a result.

Being Blindsided

Top legal decision makers are typically thorough, thoughtful, and forward-looking.  They aren’t comfortable with the unknown—and now, clients say, the chance of being blindsided is lurking around every corner.  

Uncertainty is at an all-time high (as we discussed in our Mid-Year Market Update 2019 Webinar last week); meaning the threat of the unknown is more serious than ever. Problems can pop up anytime and anywhere. Issues are unpredictable—and this is precisely why it causes insomnia for General Counsel.

This is an open invitation for law firms to reach out to their clients to engage in strategic planning, provide systematic risk identification, develop risk assessment tools, and conduct scenario planning sessions. The law firm able to help their clients look around the corner to avoid being blindsided will help clients sleep—and likely get the first call when the unexpected occurs.

Top legal officers tell us being blindsided is only one main source of insomnia—other concerns bring their own set of surprises and consequences. These are all issues clients want to have their preferred law firms in place for:

Cybersecurity/Data Privacy

The state-sponsored Marriott data breach, GDPR, new California regulations, and the intense scrutiny of privacy in the tech industry form the perfect storm making Cybersecurity/Data Privacy the second biggest source of client insomnia. Any breach brings legal issues, regulatory scrutiny, potential Board exposure, and can be quickly followed by securities fraud and class actions.

In short, it’s messy and ugly. Clients believe they won’t really and truly know if they can rely on their law firms until the dreaded moment comes. This is why Cybersecurity/Data Privacy is a top source of insomnia in 3 of the last 4 years.

Clients judge their law firm’s reliability for big things by the little things.  After all, if you take care of the little stuff, there is a better chance you will take care of the big stuff.  This is one of the reasons why small things like slow response to emails and questions, billing surprises, shoddy work, and the lack of informal dialogue have such an out-sized impact on getting the big work.

Regulatory Issues

So many regulations, so many interpretations and reinterpretations.  Top legal decision makers believe they are faced with a hostile regulatory environment where yesterday’s compliance is today’s violations. They see the rules being reinterpreted and reapplied. This results in cost, bad PR, workforce issues, and a host of other time-consuming impacts.  Clients tell us they see so many regulatory questions and potential issues they find it difficult to prioritize, develop a plan, and don’t know where the next question is coming from. With stakes much higher than they have ever been—regulatory issues are a recurring source of client insomnia for the 5th time in 6 years.

Clients value law firms able to offer counselling and access to specialists in their industry or relevant agency. They want a sense of what to worry about and what to do. These will likely be small matters to start—which many firms eschew—but these small high-octane conversations are the magnet attracting the big matters to come.

Workload

Complex needs may be surging, but budgets and headcount are not. The workload is growing as management makes more inquiries than ever. The average legal department has 2 fewer full-time attorneys on their staff than just 2 years ago. Internal staff is shrinking as risk and complexity soars. These diametrically opposed trends make getting the work done a source of insomnia for the 2nd year in a row.

Law firms can jump in and help prioritize the work. Clients love a good secondment—and it embeds you in a client’s culture. There is always the risk clients will steal your prized associate—but the upside is so high—it just might be worth the risk.

Attrition/Staffing

Top legal decision makers are watching key people on their staff retire and be recruited to law firms.  The cycle is now complete—corporate counsel started recruiting law firm partners just after the financial crisis when law firm demand was less robust. Now, law firms are doing the recruiting—the firms want industry experience, client-centric attorneys, and someone who can help teach other partners what it is really like on the inside.

You can help your clients by passing along friends or open positions at clients, offer help in evaluating candidates, and help clients with succession planning. Each of these steps brings the added bonus of befriending the very people who may be hiring you down the road.

Take the chart below, or issues in the chart below, and discuss them with your clients. Go over every item and see where your clients think they stand. You will get an education about how your clients think about their world, and walk away with more trust, more value, and new business. 

MBR

 
 

The 17 Biggest Takeaways From BTI’s Mid-Year Market Update

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So many changes. So hard to uncover. So easy to overlook. So lucrative for the firms who can talk risk and uncertainty. Here is a recap of our BTI Mid-Year Market Update 2019 webinar on June 19, 2019:

We lay out the defining new trends and opportunities changing the market. But first, we would like to thank the more than 1,200 individuals who joined us and appreciate all the feedback—especially considering how much client feedback we develop for our clients. Here are the highlights:

  1. Economic uncertainty is tied at all-time high with the financial crisis—driving a surge in new, complex legal work

  2. The surge in spending on complex work is driving unrelenting rate pressure in all other work

  3. Corporate counsel added $600 million to their outside counsel budgets since December 2018

  4. Clients want bigger, stronger law firm teams for complex work, especially in: cybersecurity, M&A, litigation, investigations, and anything smelling of Bet-the-Company work

  5. Clients want to hire law firms they believe can scale up to a larger team if the need should arise

  6. Large law firms have to prove they can work as a collaborative team—49% of clients think they can’t

  7. Mid-sized firms have to prove their team can work with the client and play a lead role when needed—most clients think medium sized firms need direction

  8. Small firms have to prove they understand the nature of the real or perceived business risk—clients already believe they can work in teams

  9. Clients are hiring small, medium, and large firms for lucrative complex work

  10. Only 36% of corporate counsel recommend a law firm to a peer—taking a key source of new business out of the system and ramping up RFPs

  11. Clients rate their law firms an average of 8.3 out of 10 for dealing with complexity

  12. 77% of client hires in the last year are new law firms—clients are looking for firms who know how to deliver services in the face of record uncertainty—and law firms who perform at 8.3

  13. Corporate counsel single out 23% of law firms as highly skilled in dealing with complexity

  14. Most top legal decision makers don’t see law firms asking about or indicating they understand the nature of uncertainty clients face today

  15. Law firms with sophisticated client feedback systems are learning about the uncertainty and complex matters well before anyone else

  16. These same law firms are going far beyond asking about goals, needs, and the ideal relationships

  17. You can learn the questions to ask to uncover this coveted work in these complimentary client feedback tools or by contacting us here

3 themes emerge: 1.) the stakes are high, 2.) clients want reinforcements in the waiting, 3.) you can’t get this work without deep, meaningful client dialogue. You can start with your best clients, your largest clients, or we love assigning each client-facing partner 2 clients to go learn about the risk and uncertainty. You will accomplish more with bite-sized goals spread throughout the firm than a big initiative.

Use the BTI complimentary client feedback tools to start, watch the video recording here, and go set some goals for your partners. Someday the world may be less complex.

Best in the market ahead.

MBR

Here's Exactly How the Raytheon UTX Deal Impacts Every Single Law Firm

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Deals are getting bigger than anyone is thinking about. Way bigger.

Older established companies—Raytheon, UTX, Fiat Chrysler, and Renault come to mind—now see M&A as only 1 of a small number of strategies to drive growth, reduce costs, create the necessary scale to compete, or take on the massive R&D risk to develop transformational products. This is part of the new world order.

Newer companies—Amazon, Apple, Facebook, and QUALCOMM—look to M&A to position themselves for the future. These companies don’t let size faze them. They may face strong political headwinds, but these organizations are smart and relentless. The headwinds just add to the complexity—making these deals high risk even if they are not mega-sized.

Clients believe only a handful of law firms are truly positioned to handle the size, scale, and complexity these deals bring. Ultimately, clients see the field of law firms able to play lead counsel on these deals as small—maybe 12 to 20 players total.

The Titan Deal Firms (TDF) will configure themselves, build the infrastructure, and staff up for the biggest deals to come. And, they will hunt this work down around the world. The successful TDFs will enjoy premier branding to attract inbound leads. TDFs will learn to hone their business development skills to position themselves to be hired 6 months before clients seriously start acting on any deal—which is how most M&A hires are made.

We also see this happening in the Private Equity world. Deals are getting bigger and more capital is being put to work. These shifts in deal size lead to unprecedented opportunity for law firms of all sizes and stature.

Great News for All Other Firms

As law firms in the M&A space migrate to the Titan deals in the market, there is unprecedented opportunities for new players to get into this lucrative space. Firms outside the mega-deal firms will win big. These firms will take on the deals the TDF firms leave behind or refer out. All firms will move up and have access to larger deals as they step in to fill the void in the market. The real winners will start to position themselves now—changing their pitches to engage large clients in dialogue about M&A. You can follow the playbook:

 
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I also recommend revisiting your strategic plans for M&A. The successful firms, the ones able to fill the void (and the TDFs) will design their strategy, resources, metrics, and goals to drive success. This includes deep and penetrating feedback on how clients are planning their M&A—as your clients are key drivers in your success.

There are few opportunities to witness, never mind participate in, a fundamental redefinition of the market. There is little downside risk for anyone with (or who wants) a meaningful M&A practice. The upside is enormous—and you can say you were there.

Congrats to Shearman & Sterling and Wachtell on their roles in the market-defining deal between Raytheon and UTX. And look for more to come.

Best of luck in the market ahead.

MBR

How to Get Rid of BD Skeptics and Directories in One Swoop

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Easy. Just wait.

24% of law firm marketing leaders say the BD skeptics will disappear in 2 years. Why? These CMOs think the combination of heightened competition, dwindling client retention, new client demands, and new GCs shopping for law firms will convert the unbelieving. And, they add, the baby boomers keep retiring so the skeptics in this group are dropping out of the system.

You are best served avoiding the skeptics at all costs and spending your time and energy on your BD believers. You can read more about CMO advice on dealing with the BD skeptics while they are still in your ranks here.

We asked more than 160 marketing leaders what trends would disappear from the legal marketing and business development world. While BD skeptics were the number one answer—here is the rest of the story:

Directories

15% of CMOs tell us directories will disappear. They point to 3 main reasons: 1) law firms will decide to stop using them as they did Martindale-Hubbell in 2007; 2) firms will no longer want to the fund the resources to support the effort; and 3) strong prayers by CMOs wishing they will disappear.

But, in an interesting twist—BTI sees more and more law firms embracing rankings as a measurement tool—so—this may be one of the last trends to disappear.

Old School Marketing

Another 15% of law firm marketing leaders say the last vestiges of traditional marketing communications including printed brochures, generic branding, mass-market webinars, and widespread broadcast messaging will disappear.

New School Marketing

A small group of CMOs predict social media marketing will vanish—as it is much less effective than personal interaction with clients and potential clients. Their point about personal interaction is well taken, but digital marketing can be to personal contact what spinach is to Popeye.

Nothing Will Disappear

25% of CMOs tell us nothing will disappear. They believe law firms will cling to their ways—printing brochures, sending mountains of aseptic email alerts to clients and prospects, and embracing their directories and rankings.

And the Point Is…

3 of 4 CMOs see (or hope) key aspects of the marketing mix going away. This is an undercurrent for change. It’s not enough of a wave to change direction completely—but enough to change course a bit.

MBR

Clients to Law Firms: Lean and Mean Legal Teams are Dead

 
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About 22 minutes into an in-depth client feedback interview I conducted, this client shared the real Achilles’ heel holding back the relationship. Our client, a mid-sized law firm, was steadily billing this client about $440,000 per month. Based on the feedback above, our client started offering bigger teams and staffing for contingencies. 7 months later, our client is now billing this same client just over $900,000 monthly. 

Lean and mean is dead. At least in any matter with risk or importance. Client thinking is going through a rare transformation—the risk of a legal team who can’t handle an unexpected problem far exceeds the savings of a lean legal team. Client risk and uncertainty are the new drivers in evaluating teams, and almost everything else. Your firm may have THE rock star in a practice—but if clients think you can’t scale up, they’ll look elsewhere.

How will you know if the matter in front of you is one of those matters, or in the case of our client, a continuing stream of matters? Here’s how:

 
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The move away from lean and mean is catching 62% of law firms off guard. Clients report law firms still propose smaller teams with no thought to contingencies, suggesting these law firms don’t understand what they are getting into. Clients will avoid these firms and unfortunately will still tell these firms it’s because of their rates—the easiest answer in the world to say no to a law firm—so don’t be fooled.

We will be discussing this and more during our upcoming BTI Mid-Year Webinar: 5 New Trends Changing How You Win High-Rate Work on June 19 at Noon Eastern. Please join us.

Clients Rank EY Law in Top 25% of Law Firm Brands

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Another first—a milestone for the Big 4 as well as law firms. 694 top legal decision makers rank the EY Law brand number 138 out of the 650 legal providers serving large clients in the US. Deloitte also makes a noteworthy appearance and is ranked in the top 35%. What makes these results even more significant is the rankings are all based on unprompted, open-ended responses from corporate counsel. BTI’s methodology does not probe on the names of specific legal providers and law firms cannot refer clients to be included in this research. Every law (or Big 4) firm earns its ranking on its own brand strength.

This ranking serves as another barometer of the Big 4 firms gaining traction in practicing law. EY Law’s brand performance is driven by the firm’s work with larger organizations—many of whom use EY Law outside the US. These clients don’t see the name, or experience, with EY Law as new.

EY Law is hitting the driving attributes clients use to assess law firms. Corporate counsel recommend the firm to peers and keep EY Law on their short list. These top legal decision makers note EY Law for its continuing innovation, tech savvy, and its efforts to improve the client experience—one of the most influential brand attributes. The only attribute the firm has yet to establish itself is as a bet-the-company firm. 

The Big 4 joining the ranks of best-branded law firms is only one of many changes in brand and client perception of law firms—all of which drive clients’ decisions to hire one law firm over another. You can see the other changes in the 9 key attributes driving law firms brands and hirability here:

Fewer Premium Worthy Law Firms

Clients’ Short Lists Get Longer

Fewer Bet-the-Company Law Firms

Clients See Fewer Movers and Shakers

Clients Say Tech Savvy Harder to Find

More Law Firms Making Changes to Deliver More Value

Clients See a Few Firms as Long-Term Leaders

More Law Firms Earning Client Recommendations

Fewer Firms Improving the Client Experience

 

You can learn more about these insights and detailed changes in your firm’s brand in the newly released BTI Brand Elite 2019: Client Perceptions of the Best-Branded Law Firms, available for purchase now.

 

Fewer Firms Improving the Client Experience

Fewer law firms are showing clients innovation around improving the client experience—top legal decision makers point to 14.6% fewer firms than last year. Clients are changing their expectations and demands as they face increased complexity and uncertainty—making it harder for law firms to understand. Fewer firms can keep up or improve as a result. This makes the top-branded firms even more impressive.

Please join us in congratulating this elite group of firms recognized as client service strategists:

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Best of the Best

• Hogan Lovells
• Jones Day
• Littler
• McGuireWoods
• Morgan Lewis
• Orrick
• Reed Smith

Leaders

• Arnold & Porter
• BakerHostetler
• Covington
• Davis Polk
• Dechert
• Dentons
• DLA Piper
• Gibson Dunn
• King & Spalding
• McDermott Will & Emery
• Paul, Weiss
• Seyfarth Shaw
• Sidley
• Skadden
• Troutman Sanders
• Wachtell, Lipton, Rosen & Katz
• Weil