The IP Litigation Outlook for 2019

IP Litigation is poised to be the fastest growing segment within Litigation at 5.15% in 2019. The number of companies expecting significant IP Litigation dropped slightly. Increased spending plus fewer matters equals higher hourly rates and larger spending on each matter. These dynamics offer law firms opportunity to develop bigger relationships—more than offsetting the drop in companies with IP Litigation needs. Look for the biggest increases to come in Chemicals, High Tech, Manufacturing and Pharmaceuticals. 

You can learn more details about the best opportunities, how client expectations are changing, and the 53 law firms clients recognize most in IP Litigation in the just released BTI Litigation Outlook 2019.

You can also learn why clients recognize 7 firms as IP Litigation Powerhouses—and 11 firms as IP Litigation Standouts. Please join me in congratulating the Powerhouses and Standouts.

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IP LITIGATION POWERHOUSES

  • Fish & Richardson

  • Jones Day

  • Kirkland & Ellis

  • Orrick

  • Perkins Coie

  • Sidley

  • WilmerHale

IP LITIGATION STANDOUTS

  • Alston & Bird

  • Duane Morris

  • Finnegan

  • Goodwin

  • Greenberg Traurig

  • Hogan Lovells

  • Kilpatrick Townsend

  • McGuireWoods

  • Morrison & Foerster

  • Pillsbury

  • Wilson Sonsini Goodrich & Rosati

Learn more about the firms clients singled out for IP Litigation prowess in the newly released BTI Litigation Outlook 2019.

37 Law Firms Most Feared in Litigation

Advantage goes to the feared.

Good strategy stops others from acting before they start. The most feared firms make their opponents either stop or change what they are doing. Feared firms have the upper hand as the opposing side is reacting to your changes—meaning you can better drive the process.

Clients change their views on law firms to be feared based on law firm behavior—and what they hear from their peers. This year, clients point to these specific behaviors:

Unpredictable

The most feared law firms will do things their opponents don’t expect. Until just 2 years ago, clients felt like they could anticipate the strategy opposing counsel would take—no more. The Fearsome Foursome and other feared firms stand out for their new, unexpected, and winning strategies.

Show of Force

These feared client teams want to start off with a show of force. They bring a lot of talented attorneys to bear early and come on strong. This initial surge lets the other side know they are in for a bigger fight than they ever dreamed—and their client is wildly committed to getting the outcome they want. It may cost more, but clients are convinced it’s the cheapest way to go over the life of the matter.

Cut Through Complexity

The most feared law firms cut through complexity swiftly and decisively. This is a real advantage as complex matters are the fastest growing segment of the litigation market.

Unrelenting

Fearsome firms are unrelenting in meeting their client’s goal—and their behavior lets everyone know of their unmatched commitment—including the opposing side.

Please join me congratulating the following 37 law firms:

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The BTI Fearsome Foursome—the most feared law firms in litigation.

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The BTI Awesome Opponents—these firms are nipping at the heels of the Fearsom Foursome.

The Fearsome Foursome Honor Roll

Being Fearsome is one the biggest differentiators in the market today. The number of Fearsome Firms is shrinking; meaning the more Fearsome your firm, the more you stand out, to clients and the other side. It is the Fearsome firms who have nothing to fear.

Learn more about how your firm can take advantage of how client behavior and spending is changing for 2019—and what your firm can do to adapt, in the new  BTI Litigation Outlook 2019: Changes, Trends and Opportunities for Law Firms. Available now.

MBR

(Research based on more than 350 in-depth interviews, with top legal decision makers conducted between January 11, 2018 and August 28, 2018.)

3 High-Performing Practice Leaders Share 5 Tips and Secrets

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Practice Leaders agree and disagree on a lot of things. But when 3 high-performing practice leaders agree, it’s a learning moment. I enjoyed having an insightful panel discussion with Rich Moche of Mintz, Tom Schulte of Clifford Chance, and Philip Sellinger of Greenberg Traurig at the Practice Management 2.0 Conference in Chicago. We focused on how to drive performance. Each of the 3 panelists presented a different perspective—but the following common themes emerged:

Prioritize

The move into practice leadership means an exponential increase in situations with an apparent need for attention. The solution—prioritize. Don’t limit yourself to taking a hard look at the list of items competing for your precious attention. Scrutinize and decide what you absolutely must do and can’t delegate—and what needs to be done now. Now does not mean just short term—now can mean starting strategic initiatives as well.

Prioritizing can become a second nature skill, enabling practice leaders—and their practices—to be more focused and get substantially more done.

Delegate

Delegation quickly follows prioritization in lessons learned. These practice leaders looked to see what they could delegate up, sideways, down, or to support staff in some way. Limiting yourself to downward delegation constrains the ability to leverage your time. Practice leaders are moving more towards using support and management staff to help get things done.

Embrace Other Professionals Within the Firm

Embracing other professionals is a key part of a practice leader’s strategy. This includes the Marketing/BD department as well as HR. But, the newest area of support is coming from practice managers. These individuals help with running the practice and ensuring associates are being utilized—both for associate careers and maximizing billable time. Some of these practice managers drive communications and act as the go-to person to try to resolve issues which may not need practice leader attention.

Learn Why Not What

As a relationship manager, partners want to know what their client really wants, needs—and how to make this happen. As a practice manager, your focus becomes: “Why did we win this work”? What can we learn from this to win more work? What did clients see as our strengths and why did we stand out? All the practice managers agreed—the only way to learn is to ask clients—whether they interview clients themselves or through 3rd parties.

Talk and Listen to Millennials

The generational divide is top of mind. Our panelists suggest the best strategy for understanding and getting the most out of your millennials is to talk to them—and listen to what they have to say. The millennials may or may not want to be lifers at your firm but—the more they are heard and believe their voice matters—the longer they will stick around. These practice managers also note millennials have a sense of how the business of law and delivery of legal services may be disrupted—as disruption is a routine part of their life.

Overall, these practice managers are optimistic about the future but don’t suggest it will be easy. Each is highly focused and has a clear idea on where their practices are headed—and what they want their practice to look like. Successful practices use different strategies than other practices. These tactics are among those defining the high performers.

The panel consisted of:

Richard H. Moche, a Member at Mintz Levin and Chair of its Public Finance, Real Estate, Bankruptcy, and Environmental Division

Philip Sellinger, who recently served as Co-chair of the Global Litigation Practice at Greenberg Traurig and currently serves as Managing Shareholder- New Jersey; and Regional Operating Shareholder

Thomas Schulte, Senior Counsel at Clifford Chance. Tom recently served as Head of the Americas Banking & Finance Practice and was a member of the Firm's Partnership Council, the supervisory board of the global firm.

I extend my deep appreciation to Rich, Tom, and Philip for their candor, time, and energy in sharing these thoughts with a captivated audience at the Practice Management 2.0 Conference held last week (October 4, 2018) at the Gleacher Center at the University of Chicago.

MBR

Making Better Associates Faster

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Associates want more than money. They want some recognition—not much, but some—and they want to feel like they have a future. A big part of this sense of future is feeling like their firm is investing in them. Law firms can take immediate steps to make the future more obvious and brighter.

Ask associates to make decisions before you think they are ready

Not the biggest decisions, but just ahead of where you think their knowledge and experience are. Put these associates in a position to chase instead of following their performance. The associates who will grow into leaders want the opportunity to strut their stuff and be challenged.

Their ability to make the right decision is an intangible benefit providing confidence and increased job satisfaction. They may be wrong in their decisions, but they will learn faster by making their mistakes in a protected environment. Be ready to coach and explain why they might have made a wrong decision in time to make it right.

Find a reason to bring associates to clients

The best associates thrive on client air. Nothing compares to observing clients, interacting with clients, and seeing how different things can be with a client present. Your associates can observe partner behaviors and discussions, and gain insight into the art of client management and how to talk to clients. Associates will also be better able to support partners as they hone their knowledge of what partners need.

Ask your best clients if you can bring associates to meetings to learn and observe

Most clients welcome this opportunity. They enjoy mentoring and influencing an associate’s career. This gesture shows clients how client-focused you are as you teach associates what clients think. If you are skilled and/or lucky, your client will invest in your associate’s success.

Give your top associate a specific role in client meetings

Then, immediately give them detailed coaching on how to play this role. This includes practice sessions before you go to the client meeting. Don’t go easy—practice the difficult questions as well as the softballs.

Ask your associates to research one major client in depth to find new information and insights

Understanding a client’s business is one of the biggest law firm differentiators in the market. The best associates crave information about the client for whom they perform work. This adds up to a high-power opportunity for associates and law firms. Ask an associate to perform business research on a key client where they bill time. Ask them to look beyond immediate headlines and find product plans, growth plans, M&A history, and business challenges.

Ask these associates to use all firm resources but insist they synthesize the data into usable analysis, and bullet points. Ask for partner-ready summaries which relationship managers can use to discuss things with clients. Associates love the responsibility to make an impact and partners get help in developing high-value client conversations.

Train, train, train, and train

Few things say I’m investing in your future like training. Training goes well beyond teaching associates new and useful skills…it drives culture. Associates adopt the values the training supports. Start training in client service and watch associates embrace the importance of client service. Train them every year and they will believe it is increasingly important in everything you do.

We recommend developing and delivering associate training in 4 key areas:

  • Client service—a core component of any client-facing business. You can’t train anyone early enough nor hone their skills enough. This associate training will also improve partner support and productivity—as associates use newly acquired client skills with partners.

  • Business development—a proven tool to draw out the associates with interest and potential talent in business development. Use this training to introduce business development and bring it into the firm’s culture early. This will make business development a more natural and effective process when the associates reach partner.

  • Social media—your associates are already using it. Leverage their natural inclination to incorporate social media into their professional success. The art of social media for business can be taught and is effective for making new contacts and clients.

  • Networking—always talked about but rarely taught. Teaching associates when, where, and how to network is giving them fuel for their careers and business development.

Associates are more valuable than ever—and continue to increase in value. Law firms are working harder to keep them—and keep them longer. These steps turn associates into better attorneys, makes them feel more invested in the firm, and helps define their clear contribution to the firm besides their billable hours. This is your opportunity to make your associates better and keep them around a lot longer.

MBR

Radical, Crazy and Off-the-Rails Moves to Expect from Law Firms

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Nothing—including robots, AI, and technology—is as exciting as law firm behaviors. Law firms will become emboldened, impatient, highly strategic, and desperate as the more aggressive law firms make ever-bolder moves on the market.

Stealing once untouchable laterals is commonplace. Grabbing practice groups is part of the new norm. Baker McKenzie openly states its goal of finding merger partners to build out the East and West Coasts. All this is going on while other law firms either believe bold moves are too risky or look to leap frog everyone else.

We are about witness a new round of old moves as firms jockey for position. Look for the more noticeable moves to include:  

1. No Charge for 1st- and 2nd-year Associates

A prestige law firm stops charging for 1st- and 2nd-year associates. The associates will work on matters governed by alternate fees or other arrangements to enable firms them to change the economics.

2. Law Firm Buys a CPA Firm

A major law firm buys a CPA firm with the intent of getting into the audit business and merging their tax business. Think of a reverse play on the Big 4—on a smaller scale.

3. Become Management Consultants, Too

Entering the management consulting business. McKinsey was started by partners who left Jones Day. This business offers non-conflicting growth. The management consulting-bound firm will recruit top partners from the established management consulting firms to build the business.

4. Dive into the Forensics Business

Firms will move into the forensics business. This market will grow. Law firms receive one of the first calls in situations where forensics are likely to be needed. Law firms could have the first shot at this work and be bringing the added benefit of client privilege.

5. Establish an Investigations-only Firm

The investigations market will grow more quickly than anyone expects. A few current rock stars will leave their posts in and outside of law firms and form a boutique—boasting prowess, client service, flexibility, and brand. They will use other firms to meet the need for big teams.

6. Conduct Post-win Debriefs Routinely

Law firms learn so much when probing why they won instead of why they lost. Win rates will increase, and any meaningful win will be followed by a debrief as to why.

7. Completely Redesign the Client Experience

A small number of large law firms are acting. These firms assign a small group of senior partners to completely redesign and redefine the client experience. Their goal: to make it drastically better than today’s standard. This experience will establish a new standard and be designed to change and evolve. The time has come. The time is now. Clients want a vastly better and different experience.

8. Secondments to be Standard

Select law firms will see secondments as the fertile training and business development ground it is. Every associate at these firms will spend at least 3 months at a client within their first 3 years.

9. Magic Circle Merger

The Magic Circle merger with a Wall Street/NY firm is inevitable. Between global demands, US‑style litigation slowly spreading around the world, and pressure for firms to grow—look for at least 2 mergers of this kind.

10. A Big 4 Accounting Firm Buys Law Firm with Scale

The Big 4 will set up clever vehicles to effectively own a law firm of size and substance.

Remember, the big accounting firms are the primary reason we have LLCs. This is the logical move to build a firm. The Big 4 know how to integrate and can streamline delivery. Everyone and no one will be surprised.

Admittedly, we have eluded to the last 2 before, but we just couldn’t resist saying it again.

These radical moves will get a lot of attention and will be copied. Some of these strategic moves will be real and outsized winners. Others will be winners for some firms and not others depending on culture,  mindset, commitment, and appetite for real change. All will happen and influence the market—making strategic planning more interesting, more demanding, and more impactful than ever before.

MBR

More Clients than Ever Cutting Law Firm Rosters; Sets New Record

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Clients are at it again. No sooner had clients cut their law firm rosters to record lows than they turn around and start cutting again. But on a much wider scale.

22% to 30% of clients are cutting, or about to cut, their law firm rosters. This sets a new record and is double the prior average of 13% of clients looking to cutback at any one point.

These top legal decision makers say the trifecta of a surge in shoddy law firm work, increasing complexity, and lackluster client service turns too many law firms into way too many law firms. Managing this many law firms costs way more than money—it costs money, cycle time, and increases risk.

Why They Do It

For clients, fewer law firms translates into better risk management. Fewer law firms means more uniformity in approach, overriding legal philosophy, and fewer people to understand and make understand. Communication is more streamlined and direct. In short, life is easier and work flows more smoothly. It also saves money.

As a result, clients are planning the biggest cuts to their rosters yet. These clients are planning reductions from hundreds or dozens of firms to fewer than 10. The fringe players will be gone or phased out. A few secondary providers will move up the ladder. The current primary firms will have to prove their worth to keep the coveted primary spot as the firm receiving the biggest portion of the work.

Clients are looking for firms who can deliver on the client service front. These same clients are looking for signs of collaboration within a firm as work streams grow in size. Currently, only 51% of clients believe their law firms show signs of collaboration, and only 33% recommend their primary law firm. The field is pretty open. Clients will rely as much on your pre- and post-pitch discussions as your initial pitch to see if your firm makes the cut.

After talking to 359 clients—here’s what we recommend you do:

  • Ask clients if and when they plan to shrink their law firm rosters—these are no longer public events and may be conducted with little fanfare

  • Help clients plan to use fewer law firms by segmenting work based on risk and complexity, business units in your client’s company, or other high-value categories

  • Develop a plan to perform the best work with a new approach, including regular budget and update meetings and training to better learn client objectives and sensitivities

  • If you have to pitch in a competition, talk all about client needs and risk—they know who you are and are eliminating firms who act like they are pitching a new relationship and are talking about themselves

  • Ramp up every aspect of client service to ensure you not only show improvement but also stand out

  • Get deep and meaningful client feedback about how you can improve and your clients’ plans—yes we do a lot of this, and clients are happy to share—especially if they want to keep you on their panel

Every client cutting their law firm panel is a major growth opportunity. Look for it, go find it, and use it to your advantage while other firms still see it as a threat. Your clients will welcome the help if you have a meaningful relationship—like the kind of client you want to keep. Those firms who don’t act like they already deserve the work are the first to fall by the wayside.

MBR

(Based on more than 350 in-depth interviews, with top legal decision makers conducted between March 2018 and August 2018.)

Top 7 Client Innovation and Technology Needs

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Two viewpoints dominate innovation—clients and law firms. The gap between the 2 is large. Clients say only half of all law firms are showing any sign of innovation. The law firms who are among the first to close this gap will win the innovation race, or at least take the lead.

BTI’s exclusive research with top legal decision makers uncovered 27 client needs and priorities—some demand technology, while a significant number don’t. We discuss 7 of these needs below:

  1. Online access to (and storage of) working and final documents
    Clients want their law firms to place their documents in a secure, easily accessible digital location. These clients want to see current work product and drafts but want history as well. They also want client-friendly naming conventions, clearly describing the content.

  2. Dashboards with budget status, timelines, and KPIs
    Clients routinely report financial performance for their department and selected matters to key individuals. The days of chasing law firms for this information are coming to an end. The innovative law firms are pushing this out to clients and provide near real-time access in user friendly formats—AKA—a dashboard.

  3. Remote access to work product through apps and cloud‐based systems
    Clients want simple to use apps to access the data on 1 and 2 above, just as they do in many aspects of their life.

  4. Online support
    Clients want to know where to call, knowing it’s not their lawyer, to get help using your website and accessing data.

  5. Contract development and management tools
    In what could be the first real client adoption of AI-based tools, clients see great benefits in using software to manage contract development and existing contract management.

  6. Process and workflow management strategies
    Clients tell us the real benefits in improving process and workflow are better quality, more clear communications, and shorter cycle times. The reduced billable hours and resulting savings are a strong 2nd place benefit.

  7. Artificial/Augmented Intelligence tools
    Top legal decision makers are looking for benefits in e-discovery and contract automation. Other tools such as AI-based legal research can bring benefits—but clients expect law firms to adopt these tools to improve quality and cycle time. The main message—top client needs are foundational—focusing on day-to-day activities and needs. AI becomes interesting when it hit daily operations.

The law firms standing out for innovation are talking to their clients, getting feedback, and putting innovation officers in direct contact with clients—as well as getting client feedback. These firms then build tools or change behaviors and apply these changes to the broader client base.

You can learn all the details behind the 27 client needs and priorities in BTI’s just released BTI Legal Innovation and Technology Outlook 2019: Clients Rank Their Needs and Law Firm Performance. This report also details 40 law firm actions and tactics clients see as the most innovative—in full detail. Learn more here.

MBR

(Based on more than 359 in‐depth telephone interviews conducted between February 20, 2017 and July 8, 2018)

The 52 Law Firms Clients Single Out as Best at Innovation

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Who knew. Law firms are innovative. Well, at least half of them are, according to top legal decision makers. Clients point to 338 law firms who bring a meaningful innovation or use of technology. But, most firms bring only select aspects of client needs and priorities. These firms are on the right path.

52 firms stand out as being able to put together the broadest, most impactful and robust innovation and technology strategies. These firms stand out as providing the most benefit as well as being the most innovative. Please join me in congratulating the following firms for their bold, client-centric, and practical innovation, which clients single out as best—in a completely unprompted manner:


You can learn exactly where your firm stands compared to the 52 above and 338 firms clients talk about in our just released report BTI Legal Innovation and Technology Outlook 2019: Clients Rank Their Needs and Law Firm Performance.

This is the only guide to rank firms on legal innovation and technology based solely on client input. You can also immediately discover: 

  • 27 specific client needs and priorities driving innovation and technology. Use this insight to immediately target clients’ most compelling needs and be seen as a market-leading innovator
  • 40 law firm actions and tactics clients see as the most innovative—in full detail

ORDER NOW and immediately receive your copy of this essential report to stay ahead of client needs, other law firms, and the market.

MBR

Based on more than 359 in‐depth telephone interviews conducted between February 20, 2017 and July 8, 2018

9 Reasons Practices Thrive While Others Struggle

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Law firm performance is lumpy.

A small number of practice groups thrive in up, down, and even hostile markets—while others dwindle in the best of conditions. You can see this within a law firm or across a spectrum of different law firms. Thriving practices use strategies and tactics the others don’t. The good news is, you can learn how to start using these tactics immediately to improve your performance—even if you’re already thriving.

These 9 strategies and tactics include:

Training

Not to teach—but to bond and teach. Good training bonds the participants almost like boot camp. Bring your team together to learn and sweat over a never-before-seen problem and come to agreement over solutions. But the team-building could be more valuable than the learning. To practice, train everyone at least once a year in both hard and soft skills.

Continuous Informal Knowledge Sharing

No matter how big the group, the attorneys in the top practice groups are all talking to each other—and do it all the time. They talk about clients, legal issues, unusual circumstances, thorny problems, new ideas—and in this day and age—politics as well. Some of this time becomes billable—some not. But, the knowledge sharing results in better outcomes for clients—and this morphs into new business, cross-selling, client referrals, and a cohesive group who shares leads as part of this knowledge.

Ongoing Informal Dialogue

Unlike knowledge sharing, informal dialogue includes social talk, sharing about hobbies, families, and a whole other world outside law. While not the dominant topic over a year, a relevant topic providing the on-ramp for all the other conversations to take place. These practices also provide opportunities to foster this dialogue. We discuss this more in depth in this post: The 8 Habits of Highly Profitable Law Firms.

Shared Goals/Clear Strategy, Sense of Purpose

Top performers define clear approaches to the market and clients. Thriving practices have strategies for their largest clients, smaller clients, and set goals for growth. This contrasts with underperforming practices who rely on attorneys to develop their own individual strategies. This individual approach dilutes resources, prevents teamwork, and increases business development costs as each partner requires a unique support system to go to market.

Client-Centric Approach

So many practices rely on referrals from other practices (although they may never share this plan with these other practices), marketing to state bar associations, lawyers’ groups, and referral sources. While these can generate business—there is nothing more effective in building a practice than marketing to clients and decision makers directly.

Uniform Client Experience Through Client Service Standards

Every single client of the top-performing practices expects a uniformly high level of client service—and gets it. The top practices have client service standards which govern how each attorney interacts with clients. They can be as basic as informing clients of all filings to partners telling clients about change in scope within 48 hours of the change.

Client Feedback

High-performing practices embrace client feedback. They want to know how they are doing—exactly, how they can improve, and how client expectations are changing. These practices don’t care how good they already are; they care deeply about how good they can be.

Superior Client Service

Attorneys in the thriving practices deliver with anticipation and certainty. They know their clients and what they want to accomplish in each matter. Their clients have fewer surprises than others because their attorneys keep them up to date in near real time—and faster when needed. These high-performing practices work to always improve their client service—not just for their personal rewards—because clients expect their attorneys to always get better. This is one reason high-performing practices obtain client feedback.

Meetings and Retreats

Get togethers are the vehicles to create opportunities to meet, talk, and get to know one another. The more facilitated social time, the better. The more provocative speakers you offer, the more conversation you create. More conversation creates informal dialogue.

Any one of these tactics can improve your performance. As you adopt more tactics, you see benefits multiply. These tactics require time—no technology or size requirement stops any practice from embracing each individual step.

Hear More from Top Practice Leaders Live In-Person

I am honored to be discussing these topics and more with Philip Sellinger, Co-Chair, Global Litigation Practice, Greenberg Traurig; Thomas Schulte, Head of the Americas Banking & Finance Practice, Clifford Chance; and Kristian (Krist) Werling, Co-Chair, Life Sciences Practice, McDermott, Will & Emery in a panel discussion at the Law Firm Practice Management 2.0 on Thursday October 4, 2018. This one-day conference developed by my Co-Chair, Patrick McKenna, promises to be a high-impact and interesting event.

All BTI clients and friends are welcome to register at a 20% discount using this code: PMSPK20 as you register.

 Conference Agenda:

Law Firm Practice Management 2.0 Agenda

Event Details/Landing Pages:

Law Firm Practice Management 2.0 Event Summary

Law Firm Practice Management 2.0 Event Details

Hope to see you there.

MBR

10 Lessons from the 10 Most Popular Posts

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The Mad Clientist, BTI’s blog, is just a few blog posts shy of 200 posts. Our goal is to make each post more insightful than the next—with an occasional break for insightful humor or offbeat topics. We also learn many lessons as to why some posts are more popular than others. Uncovering the reasons posts are popular teaches us as much as we hope the posts inform you. So now, we put it to the test. We went back to the first post on this site and measured readership of each over time. Here are the top 10 in order:

13 Unspoken Rules of Client Relationships (March 11, 2015)
Clients play by their own rules. Especially when it comes to outside law firms. This post discusses these rules based on more than 14,000 interviews with top legal decisionmakers. BTI clients and friends keep telling us how much sense this makes in thinking about their clients.  

The 8 Habits of Highly Profitable Law Firms (September 16, 2015)
Clients have as much to do with profits, maybe more, than managing costs. The most profitable firms have the right clients, the right client mix, and know how to manage these clients

Is $5,000 an Hour Next? (May 11, 2016)
This post marked the first time BTI uncovered law firms being paid $2,000 an hour. This was for super-premium work and we found only a few firms in this rarified air. Despite the increase in complex work, we have not seen this record broken. Yet.

5 Reasons Rainmakers Book 5 Times More Business Than Everyone Else (October 14, 2015)
Rainmakers do things differently and book 5 times more business than an average partner. Interestingly, this 5x ratio remains constant across all size firms. It pays to be different.

6 Killer Rules to Developing Business (April 18, 2018)
Clients say firms who win work don’t win by chance—they win because they do things differently than other firms. We discuss the 6 tactics allowing firms to dominate and develop serious business.  

Client RFPs Hit 15-Year High (January 27, 2016)
As law firms were deluged with RFPs, this post helped explain why. Clients had set a record for the number of RFPs issued. We also included a deep discussion of what it takes to win in this sea of competition.

Exactly When, Where and How the Big 4 Will Steal Your Firm’s Best Clients (October 4, 2017)
The Big 4 are practicing law all over the world. Speculation runs rampant about how—we think this post still tells the story.

The 16 Most Important Trends and Opportunities for 2018 (December 13, 2017)
2017 was the first time in 9 years law firms started to feel the impact of clients moving their budgets back to outside counsel—breaking an 8-year trend. This post discussed how, and where, the trend would continue—offering the first optimistic views in a long, long time.

Clients Name the Best Law Firms in Top Spending Industries for 2017 (July 26, 2017)
Law firms are starting to think about going to market by industry. BTI’s analysis is the only source of insight into where law firms stand by industry. This analysis also provided insight into law firm industry strength from the client perspective—helping law firms hone their marketing and business development strategies.

Please let me know which one is your favorite from this group or any Mad Clientist post. Also, please let me know about anything you would like to see—old or new. Many thanks for your support.

MBR

New York Firm to Merge with a Magic Circle Firm?

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A Brief Lesson in Modern History—How Lateral Rules Were Rewritten

Everyone knew you couldn’t pull laterals out of the big NY firms—until Kirkland, Paul, Weiss, and a few others did. Quinn grabbed partners out of Skadden who have now been plucked out of Quinn by Dechert. The new rules are: every partner is fair game everywhere. The previously unheard practice of recruiting big NY firms' laterals to new firms is almost routine.

Up Next? Mergers

Most law firms merge to gain market access, new geographies, and new practices. Some of the mergers are financial rescues, but even most of these bring market access. Firms still see mergers as a vehicle to extend reach.

The global tie-ups offer the merging firms international market access. They expect to market to each other’s clients, cross-sell, and otherwise develop what they hope is a preferred or captive market.

Now it’s time to rewrite the law firm merger rules. Two new kinds of mergers are coming:

The Consolidation Mergers

Look for law firms to consolidate markets instead of extend reach. Every city (except major financial centers) has 2 large players—each of whom will claim market leadership. You will see these firms merge. These market leader mergers immediately create economies of scale and mega clients for the newly created firm—the kind of formula proven to deliver superior profits.

Yes there will be conflicts, but like all good mergers, these will be overcome.

The Rock Star Mergers

In 1998 Price Waterhouse and Coopers & Lybrand merged to become PwC. They were an instant powerhouse with a plan to dominate the largest 200 companies in the world. Rock star law firms will merge and change the entire competitive landscape. These mergers will look like:

There may be other rock star mergers with the same impact, but these mergers will make every other firm rethink their approach to business and life.

Preparing Yourself and Your Firm

We expect these mergers to happen in the current planning horizon. You can incorporate these events into your current thinking through scenario planning and answering the following questions during a leadership retreat:

  • What would, and could, we do when the 2 biggest competitor firms in our markets merged?

  • How would we protect our client base if a NY firm merged with a Magic Circle firm?

  • Even though we don’t take in laterals, who are the 5 laterals we would want—by name—if we suddenly change our minds?

  • What would be the ideal criteria for a lateral partner?

  • Even if we don’t want to merge, which firms would make the ideal merger partner to help grow clients and boost profits with the lowest risk?

You could ask more questions, but these will bring you to the heart of the matter. And will keep you plenty busy with strategic thinking.

To circle back to where we started—all the rules are being thrown out the window. New rules apply. A few firms will redefine the rules while others scramble. If you don’t want to redefine the rules, which most don’t, then be ready to act when others do—and you can still jump ahead for the future.

MBR

EY Circles Its Legal Prey as It Acquires Riverview

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Another move, another round of guessing. The Big 4 legal services question is no longer if and when—it’s how much and how fast.

How are the Big 4 going to make their law splash known? EY just took another step closer. More of a baby step than PwC setting up a Washington, DC office, but a step none the less. EY’s acquisition of Riverview Law expands EY’s presence in the managed legal services game—a market where they already supply services.

Not Performing as Well as Law Firms

Currently, corporate counsel and legal decision makers rate legal outsource providers a 7.7 out of 10 for overall experience. By contrast, a primary law firm—who provides the same services—earns an 8.7 out of 10 for their client experience. Law firms have an edge, and Alternative Legal Services Providers (ALSPs) still have an uphill battle. This is one place where EY can crush its competitors—the firm’s knowledge of and ability to deliver an exceptional client experience is a differentiating source of advantage.

EY also knows how to scale and leverage technology. This is where their real strength plays out. When and how EY invests to scale will be the event to watch. Otherwise, the Big 4 firm is just another player in an early stage market.

Managed legal services gives EY additional exposure to the GC’s office—a maneuver critically needed to make a full-scale move into legal. EY will use this acquisition to further develop relationships, better understand client needs, and develop client-by-client strategies to sell legal services. This is no different than what the best performing law firms do. Law firms lacking client-specific plans are immediately at risk.

A Wide-Open Market

In the US, only 60% of GC offices have been approached by ALSPs. BTI research shows 39% of corporate legal departments have tried an ALSP in some form. This leaves more than half the US market untested and untapped. This also suggests the ALSP who can scale their sales and marketing first will have a serious advantage—at least in the US.

The decision to use ALSPs in the US sits squarely with the GC. They may get a slight nudge or push to use an ALSP from a CFO—but, few will question the Chief Legal Officer on this one. The CLO owns the risk—they own the decision.

The EY acquisition is one more prod to law firms to rethink their game. They don’t want to leave doors open for the Big 4 by staying out of the managed services game. Law firms can partner with managed service providers or do it themselves. ElevateNext comes to mind as a team talking about this for a long time and consists of Elevate and the founders of Valorem Law Group. But, even the firms not doing anything would benefit from making a formal assessment and decision instead of passively opting out.

The only events which would dampen the Big 4’s encroachment into legal would be an accounting crisis like Sarbanes-Oxley or the loss of a large accounting firm. Both are in the highly unlikely category. The future is now. Baby step or not—the Big 4 are here.

This is a small excerpt from our upcoming report, BTI Innovation Review and Outlook: Corporate Counsel Rank Law Firms and Their Needs 2019, to be released in September 2018. BTI analyzes the ALSP market as well as client innovation and technology needs, and ranks law firm performance—by name.

MBR

(Based on more than 400 in-depth interviews with strategically selected top legal decision makers in the US at companies with $1 billion or more in revenue between November 2017 and July 2018.)

The 94 Law Firms Clients Recommend Most

Top legal decision makers have a time-honored code—they will recommend the law firms doing a much better job than anyone else. Even the most contentious competitors will share these recommendations for one simple reason—each one knows they could easily face a high-cost-of-failure circumstance—and want to know what the best options are. Their best and most reliable source of this law firm intelligence is the unprompted recommendation from a peer.

The peer-to-peer recommendation is serious business. Every recommendation is a personal statement about the type of provider—the commitment, service, quality, and demeanor—you are willing to entrust to a peer—from whom they would expect the same. We discuss this in more detail here. 

Why Recommendations Matter—Big Time

Your law firm’s recommendation rate—how often your clients recommend you to their peers in an unprompted manner—is one of the most powerful indicators of future growth potential and sustainable business development. More than half of corporate legal decision makers will hire a law firm based on a single, unprompted recommendation from a peer.

Only 15% of the law firms serving large clients earn this coveted recommendation. Please join us in congratulating the 5 law firms earning the absolute most unprompted recommendations:

In addition, please congratulate the following 10 firms who garner more unprompted recommendations than all other firms except the 5 above:

You can learn who the remaining 79 most recommended firms are by downloading our complimentary report BTI Most Recommended Law Firms: The Law firms Legal Decision Makers Recommend 2018.

Earning recommendations is no passing honor. Recommendation rates are one of the most powerful indicators of future growth potential—clients think highly of you—a real advantage when pitching or quietly developing business with your best clients. Learn about the drivers behind recommendations and why they are so powerful in our no-cost report or here.

Good luck.

MBR

93% of Clients Recommend a Law Firm—It’s Probably Not You

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Only 1 in 3 clients recommends their primary law firm to a peer. A level rivaling both last year and 15 years ago. The reason for the drop: clients expect more. Much more. In their minds, they are spending more money with outside counsel—mostly on complex matters. The complex matters demand more attention and increased levels of client service. Instead, here’s what clients tell us:

Clients have only recently started to spend more money with outside counsel—on mostly complex matters. They expect more attention and deeper understanding of their situations. And, they expect their primary law firm—as in the one who gets the most business—to deliver on every front—especially the sources of frustration listed above.

Peer-to-peer recommendations are the single most powerful source of new business for a law firm. Everything else pales in comparison. The main reason clients recommend a law firm—client service—is 61% of all reasons. This is nearly 5 times the next factor.

The law firms who manage to earn client recommendations are growing faster and booking new business at a lower cost of acquisition. This not only drives revenue—but drives profits.

GCs make these recommendations to each other in private conversations. These include one-on-one discussions, group meetings, conferences, and a host of formal and informal venues. Clients find it a hot topic—who is good. And they want names.

These are not the “will you vouch for me” recommendations. Unprompted recommendations happen when a GC offers a name, without any prompting or suggestion of who. This recommendation comes from the ongoing evaluation of all the law firms in GC’s mental roster. The firm with the best client service wins—whether they are primary or not.

Stay tuned—next week BTI is publishing the most recommended law firms—by name. See you then.

MBR

7 Questions to Ask Every Client Before August 15

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Let’s play word association.

I say: “July or August

You say: “Vacations, people out, summertime” 

Top legal officers say: “Next year’s budgets, end of year results, and adjust for the 2nd half of the year”

Large clients are thinking about next year’s budget right now. Many have submitted their first drafts to management. Your clients are learning how their company’s 4th quarter will play out—and any changes in plans/priorities which may result. They are integrating the unplanned events which popped up earlier this year while predicting surprises yet to come. All in addition to their day jobs.

This is your chance.

Engage your clients by asking questions and providing answers. Offer perspective on the budget trends you see at other clients—are they flat, headed up, or headed down? These insights are valued and hard to come by. Clients use your insight to manage their management and their budgets. Here are the questions we find most effective: 

1.       When do you submit your 2019 budget?
2.       Are you working on your 2019 budget? (If already submitted—how was it received, do you need to make any changes?)
3.       How is your budget performance looking for this year?
4.       What were the big surprises this year?
5.       What do you think they will be next year?  
6.       Are there any changes in management pressures or goals for the second half of the year?
7.       What can I do to help you meet your year-end goal?  

And maybe don’t ask the last question—act instead. Offer the following:

-        Help triage priorities for the year
-        A 2nd-year associate to help with leg work
-        Perspective on changes your clients are making to headcount, AFAs, technology, and training

The really bold can offer up some fixed fees for specified portions of your client’s caseload or work in the new year.

Summer is one of the best times to start locking in future work and help where clients need it now.

MBR

There's a Bull Market for Law Firm CMOs

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The market is ripe for law firms to up their marketing game.

Smaller firms, bigger firms, and global giants are all bringing on new marketing leaders. In the last 6 (or so) months alone, we’ve seen many notable changes in leadership:

This flurry of top-level turmoil can be credited to retirements, a drive for law firms to build more marketing muscle, people leaving for new opportunities, law firms setting new strategic directions, and a host of other factors.

Think for a minute. Almost ½ of law firm CMOs are on the road to burn out. Only 20% see themselves as trusted advisors to their firms and only 45% rate their jobs an 8 of 10 or higher. In short, a lot of talent is open to greener pastures.

So… How can law firms use this to their advantage?

Love the One You’re With: Double Down on Your Marketing Leadership

Up your support, listen more, listen better, and an occasional extra thank you never hurts. Include your CMO as a central figure in the firm’s strategic direction. Take the time to review the firm’s strategic vision, marketing & business development plans, and client-facing philosophies. Ask them for new ideas and thoughts about how to up the marketing and business development game—and give them the support to see their initiatives through.

Find Your True Love: Find the Best Performers Looking for More

When a potential new CMO walks through your door, tell them a compelling story—the firm’s vision and how you see marketing and business development playing a central role. Sharing your marketing and BD philosophy right away will tell you more about each other than any other conversation you have. Make sure everyone who meets your candidate can tell the story. Revisit priorities, even briefly, to be sure everyone in leadership is in sync with the role of marketing and business development. This shows your candidate they can make an impact, be respected, implement new programs, and see their contribution to the firm’s success.

And, your candidate knows you already. They’ve checked your firm out in Chambers, BTI reports, and talked with folks who have worked for you—they want to know your vision and how this role fits in, not about the firm’s history.

It should go without saying but treat your candidate well. Think of candidate service as a proxy for exactly what it will be like to work at the firm. CMOs tell me stories of firm management being late to interviews, partners taking phone calls during interviews, and no one ever saying thanks for coming in—even when the candidate travels from out of town.

To attract the best-in-class CMOs, offer a market-based salary. High performers believe their current pay plus a percent doesn’t speak to commitment or value—it speaks to offering enough to make a move. CMOs have a good sense of what the market will support. And, the top performers view themselves as being at the top of the market.

More than a few law firms are still on the hunt for a marketing leader. The candidate pool is strong. Look for more offers, more moves, and law firms with strong leaders making sure theirs don’t go.

MBR

New, Classic, Light, and Heavy Summer Reading—All with Lasting Lessons

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Summer reading can be a light or a serious read. I recommend a selection from each for summer reading—a light and short and maybe something longer when you are done. My selections include:

Leonardo da Vinci by Walter Isaacson

Learn all about creativity and a great mind. See how a genius thinks about the world and thinks in general. See how he relentlessly pursues answers to satisfy his curiosity and how he procrastinates. Learn how he manages not to create boundaries to limit his thinking.

How to Think Like Leonardo da Vinci: Seven Steps to Genius Every Day by Michael J. Gelb

Mr. Gelb, who is also an excellent presenter, offers practical insight into being more creative and what holds us back. He suggests strategies such as focusing on questions instead of answers and how to eliminate the constraints of outcomes to encourage creative and more original thinking.

In the lighter category, I highly recommend a read or re-read of:

Who Moved My Cheese? by Spencer Johnson, M.D.

This highly readable book can be digested in an hour or so. 2 mice and 2 people deal with change, complacency, contentment, and the obstacles to change—presented as a story about the different approaches to the dwindling cheese supply. Amusing and thought-provoking, this book is about to celebrate its 20th anniversary. It spent 5 years on the New York Times best seller list.

And, a set of summer reading recommendations would not be complete without:

The Mad Clientist’s ABCs of Client Service by Michael Rynowecer

This fully illustrated book is a light-hearted look at a deadly serious skill: learning how to improve client service. The Mad Clientist distilled 14,000 in-depth interviews with top executives into 26 pithy, pointed actions for you to start using today. Spend just 26 minutes with The Mad Clientist and his ABCs of Client Service and improve your client service immediately.

Clientelligence: How Superior Client Relationships Fuel Growth and Profits by Michael Rynowecer

Learn how to drive growth and develop the best relationships with clients—based on in-depth research with 14,000 top decision makers who hire professional services firms. The decision makers point to 17 activities described within Clientelligence as driving superior client relationships, service, and new business.

Learn and enjoy.

MBR

Rainmakers Kicking Big Time Butt: Increase Their Books 4X Others

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A typical rainmaker added just over $1 million to their existing book of business since 2015. This increase is way ahead of any industry growth or other market-based phenomena. And it is 4.5 times bigger than the average partner's increased bookings.

Unrelenting

This performance comes from one thing—unrelenting focus on clients. They understand relationships are everything and don’t consider the possibility they won’t deliver. Their clients know when budgets will change in real time, and they exude confidence to be a “turn-over partner”—a client calls in the middle of the night, shares a crisis, and can then turn over and go back to sleep, confident their rainmaker has it covered.

7% of Rainmakers Hidden and Waiting to Be Found

BTI research shows only about 7% of all partners are rainmakers in the largest 600 law firms. By contrast, 86% of partners say they lack the skills to develop new business in a meaningful way. This leaves 7% unaccounted for—these are rainmakers-in-the-making. Find them in your firm. Cull them out. Train them. Give them tools, training, and most importantly—access to your most strategic clients—where they can really build a relationship—and new business.

Unleashing Your Hidden Rainmakers

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If you want to lose the 7% of up-and-comers, constrain them and don’t give them access to clients. Rainmakers and rainmakers-in-the-making hate to be constrained. They get their energy from clients—suppress the energy and you suppress the rain.

This 7% of up-and-comers are likely already high performers. But, they may not have the length of experience leadership typically expects. The risk of letting an up-and-comer loose on a strategic client is much less than the risk of keeping them from clients. Someone (think recruiter or another firm) will spot this talent and lure them away to the greener pastures of client access.

We realize this can mean hard decisions for law firms. What do to with your partner managing a strategic client but not booking new business? How to allow for more client-facing time and how to provide the infrastructure a rainmaker-in-the-making might need? And the advanced coaching, mentoring, and training up-and-comers crave. However hard the decisions, law firms will make them either passively through inaction or actively by preparing up-and-comers for outsized success. But the decisions need to be made.

MBR

Based on in-depth interviews BTI conducted with more than 160 law firm marketing leaders and 150 law firm partners between September 2016 and May 2017.

Where Law Firms Think They're Great, and Where They Ain't

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The B players outperform the A players.

They are hungrier, want to make change and are ready to fight city hall (aka management), if need be. These law firm marketing leaders are focused on blocking and tackling issues such as: client service, client feedback, basic business development skills, client teams, and an occasional industry group.

This is from the results of more than 160 law firm marketing leaders’ self-assessment of 15 key areas of performance.

B Players are Building with the Basics

The B players are much harder on themselves—offering a self-ranking of 8 out of a possible 10. But, they sport the highest 3-year growth rate of all law firms, at just over 5%. It pays to be just a bit humble and focus on the basics.

A Players are Building Strategy before the Basics

The self-ranked A players show the slowest 3-year CAGR, at a 1.2%. The self-ranked top performers are focusing on the strategic. They are emphasizing legal prowess, technology, innovation, content marketing, industry groups, and collaboration—all important. But these programs rarely show results without training in the basics. These strategic programs are highly effective in attracting clients—but don’t turn into business unless partners can turn these leads into clients—using the basics which remain the focus of the B players above.

Doing What Works – the Self-Ranked 7s

Law firm marketing leaders ranking themselves 7 and below receive less institutional support than the self-ranked 8s, 9s, and 10s. The 7s put all their energy into getting programs, tactics, or a single effort in place—but they are making forward progress—at the 3-year CAGR of 4.3%.

These 7s are like the 8s—they focus on basics and building blocks. And don’t let go until their program is up and running—and working.

Influence by Osmosis

At a self-ranking of 6, the law firm marketing leaders are making an impact at the partner level. They may get a firmwide program or 2 off the ground (usually client feedback) and will use the feedback and their coaching skills to drive improvement and change. These CMOs take on the one-to-one relationships with the vested partners—and drive change with each one. The good news—the vested partners are typically the most interested in building client relationships and new business—so it’s well-placed leverage.

The self-ranked 6s deliver a CAGR of 2.8%.

The Disenfranchised

Ranking their firm’s performance at 5 or less—these CMOs are most likely to be in the market looking for a new gig—they try—but can’t get a lot of traction. They are pushing water up hill and want to make more progress. Usually, somewhere other than their current firm.

Few Areas of Greatness

Only 3 areas really stand out with a self-ranking of 10—with more than 20% of CMOs ranking themselves a 10—these are:

-        Cultivating Work from Existing Clients
-        Setting Strategic Direction
-        Providing Tools for BD

Conversely, more than 50% of CMOs rank their firms at 6 or lower in 4 areas: 

-        Partner Accountability
-        Using Metrics to Drive BD
-        Attracting New Marquee Clients
-        BD Training for Attorneys

You can see the full results of how CMOs rank their firms in each of the 15 activities by clicking here.

The best performers show a bit of humility and hunger. They show how mastering the basics beats the strategic at this stage of the market. But, it won’t always be this way. Business development is going to become a lot more difficult—and those firms who mastered the basics will be the first to really get benefits from a well-crafted strategy.

 
 

Based on in-depth interviews BTI conducted with more than 160 law firm marketing leaders between September 2016 and May 2017.

Clients Pay Their Highest Rates to These Law Firms–and They Are Worth It

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Clients are slimming down the list of firms to whom they pay their highest rate. This can help explain why the top rate hasn’t budged in 3 years—at a lofty $2,000 an hour. And, only 56% of clients say these firms are truly worth it.

Clients pay the highest rates when they need deep insight, understanding, and unflinching confidence in the ability to deliver. This presumes the firms bring unique knowledge and understanding of the risk. The following firms stand out above all others for: 1) Being identified as the firm clients pay the highest rate; 2) Clients sharing this high rate with BTI; and 3) The firm was well worth this highest rate.

The Highest of the High

The above firms are part of the BTI Client Service 30—the law firms clients single out for delivering the best client service.

Garnering Super-Premium Rates

The firms below also enjoy their clients’ highest rates—but not quite as high and not quite as many clients as the firms above. Please join us in congratulating:

Follow the Money

It is no coincidence one of the largest spending industries tops the list of highest rates paid. These rates are averages of the highest rate paid reported in each industry:

Life Sciences
Insurance
Banking
Transportation
Chemicals
High Tech
Manufacturing
Professional Services
Utilities
Retail
Media
Energy
Consumer Goods
Telecom
Financial Services

$959.17
$882.65
$869.06
$863.18
$863.13
$857.78
$838.89
$836.72
$830.83
$828.75
$823.75
$814.25
$812.93
$808.89
$773.75

 

We live in a world where top legal decision makers are relentless in wringing maximum value out of their law firms. These firms are living proof of value being delivered at the very top of the rate spectrum. The firms who enjoy these rates gain their credibility by:

  • Dropping everything and showing up—or making it seem so

  • Showing up with piercing questions and a plan

  • Pivoting with ease—as in changing the plan when facts, circumstances, and/or goals change

  • Mobilizing quickly—and never discussing resource issues in front of their client

  • Bringing bigger teams on their matter—there IS safety in numbers—top dollar is not lean and mean

  • Being ready to talk budget right then and there

  • Speaking unequivocally in their thoughts and recommendations

  • Having one person clearly accountable

  • Exuding a certain calm

As more clients pay more law firms their highest rates, their expectations will soar along with these rates. As complex work grows, look for clients who want you to look high-rate ready—especially since more and more matters are morphing from complex to bet-the-company midstream. Every relationship partner can start adopting the top-rate behaviors at any time—this will give you practice for when the big day comes—and just might get you happier clients at premium rates.

You can see the list of all firms earning the highest rates in our newest report BTI Highest Rate Firms 2018. Order your complimentary copy here.

MBR

*Based on BTI research conducted between September 2017 and January 2018. BTI conducted more than 360 independent, individual interviews with top legal decision makers at large organizations with $1 billion or more in revenue.