Clients used to have 3 clear criteria to segregate out the bet-the-company matters. Their reasons were cut and dried for years, if not decades. Now they have at least 12. This explains why 32.7% of companies report facing bet-the-company matters—almost double the number from last year (17.6%). The 9 new and 3 established criteria are:
- Legal outcomes or related publicity hurting the stock price
- Material impact on the company brand or product brand
- Disrupting ability to operate
- Disruptions in supply chain
- Damage to the distribution channels
- Potential large loss of customers
- Impact on a core business process or technology
- Potentially damaging financial exposure to the balance sheet due to the size of claims or damages
- Loss of pivotal licenses or patents
- Investigations
- Shareholder actions
- Alleged criminal activity
The activities in italics are the new reasons C-suite executives see bet-the-company issues.
The bulk of the growth in bet-the-company work is coming in companies outside the Global 200. These smaller companies don’t have the balance sheets or resources to mount the massive campaigns the Global 200 can. These smaller companies rely more heavily on supply chain, distribution, and key processes and technologies. Any claim against these strategic assets has a bigger impact than larger companies. The growth in smaller company bet-the-company work opens the market to smaller and midsize law firms.
The biggest factor in getting hired for bet-the-company work is understanding the business risk. Clients tell us many law firms they decide not to hire because they are not “brand safe” show little understanding of the business risk. The winning law firms demonstrate how and what they will do differently due to the high risk—and ask a lot if questions. The key to winning is as much about listening as your legal prowess.
We recommend creating a short checklist to identify triggers for bet-the-company work. Run every piece of litigation through this filter. Certain matters need no checklist, but pinpointing the less obvious bet-the-company matters can change the perception of your value—and your win rate.
MBR
Forwarded to you?
Get your own copy every week!