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

 
 

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

7 Ways BTI Business Development Badasses Are Different

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Attitude and behavior win you BTI Business Develop Badass status. It’s not only what you do, it’s how you do it—specifically. BTI research reveals 7 key differences between the BTI Development Badass (BDB) firms and everyone else.

1. Advance Notice of the Pitch

Knowing the pitch is coming before everyone else is a real advantage. BDBs carefully plan out the best team with both knowledge and chemistry. They know how to do the business development equivalent of synchronized swimming. These firms have a process and approach—and follow it when leads come in the door. They have more time to do it—because they knew before everyone else. And, they mostly don’t respond to surprise RFPs.

2. Mobilize Quickly

Swift and clarity are the only worlds to describe a BDB’s approach. They know who they want to lead the pitch (and it may not be the person who generated the lead) and who they want as the supporting cast. Everyone embraces their role. They spend little time sweating anything other than the best fit for technical skills, chemistry, and ability to win.

3. Play to Win

BDBs pullout all the stops and do whatever it takes to win the clients they want. And they pass on those they don’t.

4. Ignore the Rules

The RFP may say “don’t contact the client”, but BDBs don’t care. They reach out, ask questions, propose ideas and strategies - even ask what types of personalities clients prefer. Again, they do whatever it takes. As a side note - clients tell us they are surprised at how many law firms obey this rule.

5. Do Something Unexpected

BDBs focus on questions, strategies, goals, and issues. Any firm statistics about number of wins and deals closed are supplied in an appendix. In effect, BDBs treat the pitch as a kick off meeting - using information gained in the banned contact discussed in the paragraph above.

6. Differentiates Themselves

Telling a potential client a story with their needs as the center point is different. The themes include how a GC’s problem will be solved; examples of how life will be better, all the ways they deliver to budget, and new angles on old problems. The story includes the strategies to convince a client this firm won’t think of missing a deadline. Most importantly, they share industry and company insights and link these to legal issues their prospective client may face.

7. Rainmakers Lead–and Have Fun

BDBs bring in the rainmakers for the win. The pitch does not automatically go to the partner who gets the lead. The originator still gets the credit and rewards, but they may not be the best to close the business. The rainmakers share credit and love the pursuit. The thought of a big win is a source of energy and strength—and BDBs have found a way to put these partners out in front.

Your firm can be a BTI Business Development Badass law firm. It’s not as daunting as it seems. Most firms who make the changes ask themselves why they didn’t do it earlier. Contact me to discuss how to make this happen at your firm—and have your attorneys think it is a great idea.

 MBR

7 Unintended Branding Events to Stymie Any Brand Strategy

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Law firms have at least 2 branding initiatives at any single point in time. One is carefully planned, orchestrated, researched, and measured to determine its success. The other is far less formal. It occurs as interactions between the individuals at your firm and people outside the firm—namely clients and potential clients. This informal branding leaves a larger and much more lasting imprint than your formal initiatives.

The good and the bad news is the interactions between your firm and the rest of the world are almost limitless. But of this plethora of interactions, our research shows 7 stand out with much more impact than all the others:

Scope Changes

Inevitable scope changes either destroy or boost your brand. They are never neutral. The firms actively discussing scope changes with clients on a real-time basis look good and make their client look good. Your client can announce changes to their internal stakeholders well in advance of completion and look like they are in control and know where things are headed. Clients brand these proactive firms as being on top of their plan, strategy, and able to adapt on the fly.

Clients remark the firms not reporting the impact of scope changes on a timely basis are just not client focused and/or not thinking about their matters strategically. Neither is likely to get you more business.

How You Treat Your Client in the Courtroom or Negotiations in Front of the Other Side

Top legal decision makers tell us they learn so much about firms by watching them in the courtroom, negotiating deals, dealing with regulators, or in action somewhere. They watch the legal strategy unfold, but are equally mindful of how these attorneys treat their clients. Some describe opposing attorneys as heavy handed and dogmatic while others envy how the other side behaves. Equal numbers of corporate counsel make the decision either to hire the other side the next time out or to never use them based on what they see during a live performance.

Your Pitch

Clients believe they are seeing you at your best. Whatever you present, say, and do brands you forever, or at least for a very long time. This is the ultimate direct experience. Clients presume the insight you bring during the pitch will be the level they can expect during your work together. The look and feel of your presentation, the level of interactivity, the level of teamwork, the specificity you bring, and the ease with which you move through the pitch set the expectation—and to a large extent—tell clients what your firm is worth.

Your Final Invoice

The one document every single client reads. Whether or not you’ve discussed it in advance, clients always have a figure in mind of what your services will cost. They expect your invoice to be reflective of their expectations and expect it to be concise. The minute your final invoice includes any billings your client doesn’t already know about, the negative branding begins. Your final invoice represents the culmination of your strategy, planning, and ability to execute the plan.

When your invoice doesn’t match the client’s expectations, clients immediately know this is about surprise charges, untold changes in scope, impacts of unplanned events, or changes in fact and circumstance. If your client learns any of these things through the invoice and not in a conversation with you at the time of the change, they will label your firm as unreliable. To clients, their budget is just as important as the outcome.

The budget is one of the items which clients report to others outside the department. When clients have to explain budget overruns to their boss—or worse, the Board—they look bad in front of the people who matter most. The firms making them look bad are branded forever.

And if your client never brings up the budget, remember: Every client has a budget, even when they have no budget at all.

Your Voicemail Message

Clients believe your voicemail message speaks volumes about your approach to client service and individual clients. Clients want to know when you will be back and when you will be answering calls. They also want a reference to someone they can reach for immediate needs.

Top legal decision makers take note of the attorneys who are silent about when they will return; the messages just saying “leave a message,” and those saying they will “reply at their earliest convenience.” Clients brand these attorneys as those not to call with important and time-sensitive matters.

Your Email Signature

Clients want to be able to reach you when they want. All things being equal, which they often are, convenient access to your email and phone are surprisingly essential. This is especially true for questions about new issues and when your client wants to brainstorm or is looking for an opinion. These are the conversations which lead to new work. Be sure to include your email, direct office number, and cell phone in every email (and reply email) to clients.

Asking for Meaningful Client Feedback

Law firms seeking client feedback are still in the minority. This applies to the hardcore feedback which clients believe is so important to improving performance—and to making their own life easier. The law firms conducting world-class client feedback interviews where clients learn something about themselves and you learn how to improve, differentiate themselves from other firms.

You can turn unintended branding into a positive brand differentiator for your firm by exercising the same diligence as you do to intentional branding initiatives. Embracing the tools like scripts for voicemails, templates for email signatures, hardcore training for client-focused pitches, and measuring how quickly you tell clients about scope changes will all harness the power of unintentional branding. You will not enjoy a stronger and more unified brand—you will stop unintentional branding from standing in the way of winning the next piece of new work.

MBR