Dateline: June 16, 2017, 10:00 AM Eastern
Gene*, the Retail Industry Chair of a major law firm, asked his partners to put together a list of issues and questions to discuss immediately with clients. “We want to be the first to talk substance with our clients. And this is going to stoke other deals so be sure to bring in the M&A folks. Call every consultant, banker, friend, and former executive you know and report back by COB tomorrow.”
He continued, "Ask them: 'What were they thinking about the Whole Foods acquisition?,' 'What could a competing grocery chain do?,' 'What ideas did these people have?' Let’s mobilize fast. We have to be the first to talk to our clients about this.” By the end of the next day Gene had assembled a master list of ideas and reactions.
As Gene shared the list with his industry group partners, he reminded them: “share these ideas with clients. You want to stimulate thinking and help them. You don’t need to have all the answers, but you need to have the conversation.”
The clients with whom the industry group partners discussed these ideas were thankful and saw them as value added. One client shared these ideas with their top management team. These clients know Gene and his team understand their business and have the collective experience to be a resource.
Clients love industry groups. Law firms are learning to love them too. 27.3% of law firms now organize themselves by industry, up from 11.6% in 2013**.
The law firms with well built-out industry groups have a clear edge. A robust industry group creates an immediate bond, sets an expectation, and suggests you can do a lot more than skim the surface of industry understanding.
Industry groups present a real opportunity. CLOs rank their primary law firms a barely acceptable 8.1 out of 10 in understanding their business—exposing a competitive weakness which you can exploit. (Clients start to pay premium rates for your understanding of their business when it hits 9.1 out of 10.)
Top legal decision makers become terribly, and sometimes irrevocably disappointed if they learn a law firm’s industry group is just a gathering place for attorneys who have charged time to a company in the industry. While some law firms use their industry groups to showcase the deals, cases and all the legal work performed in the industry, clients expect the vast majority of your industry knowledge to go well beyond legal issues. Clients will talk to you all day about such key issues as:
- Vexing issues facing industry peers
- Legal staffing strategies and headcount
- Legal spending ratios
- New and potential risks
- Risk management strategies
- Key industry events
Not only will clients want to talk to you, but they will want to see you again and again and give you their business. As long as you come armed with one nugget which adds to your client’s knowledge base each time you meet—you’re golden.
You can get this insight from your own experience, informal research with clients and partners, or formal research like BTI’s Legal Spending Benchmarks 2016, which we have been publishing since 2002.
Clients say industry experience as articulated in case work does not add value—clients want the hard-to-get tidbits which reflect peer thinking or industry-specific insights they can’t get anywhere else. Your ability to provide these insights is way more convincing than case statistics in pleading your case.
You can see who the industry leading law firms are and where you stand in our upcoming BTI Industry Power Rankings: The Law Firms with the Best Client Relationships in 18 Industries to be released on July 18, 2017. Reserve your copy here.
*Not his real name.
**Based on in-depth BTI research conducted on a rolling basis between February 2016 and April 2017. BTI conducted more than 340 independent, individual interviews with CLOs and General Counsel at Fortune 1000 companies and large organizations.