Someone’s Got a Crush on Professional Services Providers But it Ain’t the General Counsel: Big Law and the Fight to Stay Attractive
As published in the October 25, 2021 edition of The Recorder
Unimagined supply chain challenges, scarce human resources and worrisome fallout from the inflation squeeze have corporate chief financial officers feeling vulnerable. When people feel vulnerable they look for comfort and support. Thankfully, for global CFOs, they can get the love they seek through sophisticated advisory services provided by the Big Four accounting firms. Be it support in auditing, cost segregation studies, internal controls, tax strategies, or transfer pricing and other needed services, quick responses and forward-looking strategies via a vast network of experts situated across the globe are theirs for the asking. Many a CFO and audit committee are batting their eyes fondly at this broad mix of providers ready to answer questions and solve problems, all at an agreed upon fixed fee.
While the Big Four may be getting sweet notes in their locker about the upcoming prom and what to wear to the big dance, global law firms are sitting by the phone, making doodles around their firms’ logos and listing their wonderful credentials over and over and over again, dreaming that the general counsel of their favorite corporation will see how cute and smart they are and maybe call them tonight, tomorrow, or surely by the weekend. After all, the GC and the gang in legal operations have always called before. Everybody who is anybody has always known that the law firm is totally GOAT. Besides, they have to call because only the law firm can offer certain legal services that the corporation can’t get anywhere else. And anyway, other service providers are really busy right now so they’ll have to settle on the law firm. Right?
Law firms must realize that someday soon, the phone could stop ringing. Law firms must also acknowledge the growing influence of the CFO on procurement decisions and that they are now being studied through a new microscope. Clearly the wandering eye of the suitor, be it the CFO’s or the GC’s, is influenced by what is happening in Europe and the Big Four’s push into the legal services market. The scope of services the accounting firms can now offer keeps broadening beyond tax strategies and is cutting into global law firm transactional and employment offerings with integrated solutions that are easily leveraged by most businesses. If your client is meeting with other advisors and telling you that “it didn’t mean anything,” you can bet it meant everything.
The pandemic brought out the best in many service providers; legal, accounting, healthcare, and otherwise but some were more helpful to society, business, and the crisis in general than others. It was uncomfortable to watch the slick and expensive videos produced by a few Am Law 100 firms boasting of their ability to pivot from working in the office to working from home. Didn’t most industries do this with relative ease? We are not impressed that employees have access to laptops and electricity and have mastered the Zoom call. This “look what we did” take on the pandemic is illustrative of the legal industry’s go-to-market mindset. It’s still more about “who we are” and not enough about the corporations and industries they serve. These kinds of missteps add up and make law firms look less attractive to those who are shopping for a good mate.
But your firm wants to stay in the game. To enhance appeal and bask in the love you see shared between a CFO and a global accounting firm consider the following:
1. Get on a self-improvement kick.
2. Rethink your firm’s beauty squad.
3. Develop crushes of your own.
Read, Grow, Learn: Self-improvement Is Your New Hobby
Someone is staring at you in personal growth. It’s a great line from “When Harry Met Sally” and Harry was indeed reading up on how to improve himself because he was in the middle of a divorce. You may not personally need some of the silly self-help books on the market today, but reading about the professional services industry, and particularly what your friendly competitors in the Big Four are doing to support clients, can’t hurt. How many consultants and auditors do you have in your LinkedIn network? Increase the amount of connections you have in this field and read the content they publish that relates to the industries you serve. You will learn about new techniques and trends. Follow the Big Four’s content pages and attend the occasional webinar related to a problem you believe a client is facing. You may also want to read books on B2B selling techniques and advances in knowledge transfer methods.
Who Is Helping You Look Good?
There is nothing like a new haircut or new clothes to make a person feel better. While law firms spend an enormous amount of money on marketing departments and often joke that proposals are simply “beauty contests” they rarely look in the mirror to see what their “stylists” have actually done for them. Marketing may have done wonders with the logo, website colors, and even sophisticated social media content strategy but you also need to mimic the attraction techniques of the Big Four. These tricks go beyond flirting and boasting about credentials to creating real bonds with clients. Client care processes to borrow from include setting up communication protocols with new clients, monitoring client service delivery, modifying the service team pursuant to critical feedback, and continually offering anticipatory guidance on mitigating risk or cutting costs. Instead of only hiring professionals familiar with law firm marketing, it may be time to make space for savvy account executives from the Big Four. These professionals can help you develop client-facing methods that will strengthen your understanding of consultative selling skills and how to increase client loyalty.
Fall in Love with the Client
Whether someone interests you or not, it is always flattering when another person is curious about your background or hobbies. Exploratory conversations should be mutual and, as the seller, it is your responsibility to ask the right questions and understand enough about the prospect to uncover needs or guide the conversation towards trends and anticipatory challenges. You need to demonstrate to the prospect that you are interested in their business, their industry, and their success. It helps when you have a true respect for the company or their culture. I believe this admiration shows up in the eyes or gestures and sets the tone for a mutually rewarding business partnership. I have seen, first-hand, opportunities blown because a service provider did not seem enthusiastic, engaged, or enamored. If you don’t like your clients, find new ones. You should love what you do and enjoy who you work with.
Your client’s CFO and GC work together. They compare notes. They may be whispering about you. Make sure the gossip is good.
Reprinted with permission from the October 25, 2021 issue of The Recorder (C) 2021, ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Wondering how a law firm can transition from a focus on credentials to a focus on client solutions? Scott Love of The Attorney Search Group interviews Brenda Pontiff about the business development checklist needed to start law firm transformation. Link below:
As published in the July 2, 2020 issue of The Recorder.
Law firms have much to gain by recruiting and retaining diverse talent. It is not only morally and culturally appropriate to do so, it also impacts the bottom line. Diverse professional services teams are sought after by important clients and have been proven to deliver exceptional results. In response, most firms have expressed a strong desire to change. Good firms hire implicit bias training facilitators. They provide internal mentors to nurture new legal talent. They appoint a partner or a committee of lawyers to oversee progress. So why is the legal industry still woefully behind in its ability to retain and promote a broad array of talent, particularly lawyers of color?
Without deploying an assorted and coordinated group of problem-solvers to formulate solutions and exchange information, the brand messaging tactics law firms have adopted regarding diversity and inclusion are simply acts of theater. It misses the big picture. For real success, firms must take a close look at the infrastructure responsible for supporting the recruitment, advancement and retention of diverse associates. It is not enough to hire a director or a few managers and put them in charge of diversity and inclusion if your entire firm is not building a path to success.
In a time when firms are severely cutting budgets, they must still:
- Invest in technology systems that provide transparency between diverse talent, administrative support teams, clients and management.
- Invest in benchmarking and review quantitative data regarding the cost of hiring, training and retaining diverse associates.
- Invest in the time it takes to analyze information from varied sources and formulate an action plan.
It Takes a Village to Raise a Partner
The career path of a lawyer is similar to the life cycle of any human being. It begins in a kind of birth and concludes in retirement. Think of the firm as providing the same family and community structure required to foster and develop a successful partner who might be the first in their family to obtain a law degree. For the best results you will need archetypes representing parents, relatives, external helpers in the way of teachers/tutors, doctors and religious advisers. Communication between all of these providers is key. Your village must commit to transparency between human resources, professional development, finance, technology, and marketing and business development. Integrated projects focused on eventual advancement to partnership include:
- Re-developing metrics and monitoring and tracking progress in business development. There must be a budget for sponsorships in programs such as the Leadership Council on Legal Diversity or statewide organizations such as the California Minority Counsel Program. There should also be funds set aside for customized training to help with networking and social media skills, consultative sales skills, and article writing and placement. All activities must be recorded into a central database.
- Developing client relationship protocols to ensure diverse talent has exposure to appropriate contacts and projects and matching skills and competencies with client needs, firm expectations and workload.
- Assimilating financial and performance benchmarks and openly discussing progress with the associate and appropriate leadership.
- Creating a safe space for interactive and confidential discussions between diverse associates and administrative personnel.
- Making promotions, lateral hiring and succession planning a family affair and integrating the best firm-wide professionals (lawyers and legal services providers) into the long-term process.
What Are Your Clients Doing?
While the partnership structure may be helpful in the practice of law, it is not the easiest business platform for accomplishing major overhauls. Law firms are challenged by communication gaps between practice areas and geographies. Additional boundaries are created between lawyers and administration. Though firms admit they have not been as effective as their corporate clients in nurturing diverse talent, they fail to look to their clients for operational and structural examples. This is surprising since many studies and reports have been generated (almost entirely by lawyers and lawyer-only associations) about the law firm diversity gap and point to the disparity between law firms’ abilities to make meaningful progress and the more visible evolvement seen in large corporations that have fared better in the last decade to build inclusive cultures, particularly in regard to race, as gender and sexual orientation equality are not as impacted by socioeconomic standing.
Obviously, in most corporations, a law degree is not required for advancement to the top and it should be noted that the most diverse ranks within law firms can be seen within administration. The development of the back-office law firm workforce has been far more blind to race, gender, gender identity and sexual orientation. These executives can and should bring value to the firm in a multitude of ways, just as their counterparts are doing so in the corporate world.
Why not leverage your diverse administrators and your clients’ successes? Consider developing a round table consisting of their diversity leadership and your key personnel. Let a broad mix of your administrative leaders drive the discussion. Questions they may need to ask include:
- Do you have any recruitment and/or competitive compensation best practices you are willing to share?
- What roles and reporting structures are your department leaders leveraging to ensure effective recruiting, nurturing and advancement of diverse talent?
- How are you retaining talent and mitigating departures?
- What types of outside vendors do you leverage to support training and retention of critical talent?
- Can you recommend any software or sophisticated technology solutions that assist in monitoring and tracking results related to how diverse employees navigate your culture and customer demands?
Building a New World
Once you decide to transform, you will have to rely on trusted advisers, internal and external, to execute on your plan. The big picture requires strategies and tactics best provided through a mix of vocations. Consider hiring administrative professionals who have outside experience with infrastructure and diversity issues. If your human resources or marketing professionals have only seen the inside of a law firm, no matter how impressive the firm, you are likely to wind up with more of the same. Look to other industries to recruit from and supplement the staff with employees who have knowledge of proven diversity methodologies. If you are wary of hiring full-time employees from another industry because you fear they won’t be able to navigate your culture (which speaks to overall issues about inclusion), hire the best consultants for a set amount of time and get your money’s worth by promising to listen.
Trust the people you hire and let them do their job. If your firm can’t compete with salaries demanded by your best diverse candidates, let your human resources and finance leaders develop compensation models and matter assignments to attract talent. If your diverse associates are struggling to bring in a book of business, provide them with customized coaching. If your diverse partners are leaving for greener pastures, hire a mediator to uncover the dissatisfaction and vow to remedy the problems. Collect all of your findings in a central database.
Law firms are in the conflict business, but it is well-known that many lawyers will go to incredible lengths to avoid conflict, particularly in regard to how their firm is managed. Devising a revolutionary platform to support minorities and professionals who have different backgrounds from your existing leadership will require courage and strength of character. It will also require an understanding that conflict is not bad, it is necessary and protections are needed for those articulating new opinions and new methodologies.
Brenda Pontiff is the senior marketer liaison for the Legal Marketing Association’s Los Angeles steering committee. She is also the managing principal of Partner Track Academy and provides business development training for senior associates navigating partnership candidacy.
Reprinted with permission from the July 2 issue of The Recorder © 2020, ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Having worked for both law and accounting firms, I know one thing for sure – accountants have a better life. Though they must navigate a partnership structure, their firms operate more like businesses and eventual elevation to partner usually means less paper work and more fun. This is largely due to the broad based pyramid structure accounting firms have leveraged.
A Sound Pyramid
A pyramid stands strong because the base is wide and holds up the top layers of the structure. The accounting firm partner to non-partner fee earner can be as high as 1 to 15. Law firm ratios vary widely but are often much less broad. This results in a completely different approach to client service and, ultimately, creates lifestyle challenges for law partners who are needing to bill as much today as their first few years with the firm.
Various compensation models can be found in both types of these professional services firms but accounting firms are more likely to operate in a lockstep, team sharing model. Law firms often focus on client origination and fees collected. The team sharing model opens firms up to more business development support, innovation in service delivery methods, and, most importantly, the wide-based pyramid.
The Top Heavy Triangle
In the last thirty years, the law firm pyramid has become an upside down triangle. Law firms let associate salaries get out of control and are now paying the price. (Clients are also paying the price and are looking for alternatives!) Because their young workforce is so expensive, the non-partner or income partner ranks have not grown to keep pace with incoming work. Law firms remain top heavy and senior law partners are often still in the weeds to ensure projects are completed successfully. Accounting firm partners rely heavily on much less expensive staff and devote their time to rainmaking, client satisfaction, and management.
Re-engineer Your Pyramid
It may be time to look at the budget and move money spent on real estate, public relations, or fee write-offs and move those funds to management experts who can create models for hiring, succession, and client service teams that only leverage senior partners in an advisory capacity. A fundamental blind spot for law firms may be that lawyers only look to lawyers for solutions and routinely fail to include non-lawyer experts in meaningful discussions that could uncover challenges, honestly examine the status quo, and build a better, stronger pyramid. Accounting firms have developed a more open culture. Global accounting and advisory firms are often refreshing infrastructure and, as business people, they are able to value roles and responsibilities and educational backgrounds that are dissimilar to their own.
New Legislation and Court Judgments: When Do You Create a New Service Line? As published in Best Lawyers Winter Business Edition 2016
Law firms are quick to post on websites regarding recently passed regulations or court decisions, but they rarely assess whether the situation warrants the creation of a new service line. In order to fully support clients while also strategically growing their law firms, leadership should be prepared to create offerings pursuant to market demands. The following criteria helps determine the viability of a new product:
Competition is fierce as ever among global law firms wishing to entice top-quality law school graduates. A base salary of $180,000 for first-year associates certainly draws attention. Much of that attention is coming from general counsel within the Fortune 100 concerned about fees. Savvy law firms will use this debate to bolster alternative methods of recruiting top talent while appeasing their discerning clients. Here are three ways to attract good lawyers while improving client satisfaction:
An existing client, one you’ve had a terrific relationship with for over six years has just issued a Request for Proposal (RFP). The client is looking for an additional provider of services in an area for which your firm has expertise but has not been previously engaged to supply. Because you realize that client retention is key in today’s marketplace and it is where seventy percent of tomorrow’s revenue will come from, you understand the urgency in capturing this new piece of business and serving your client in a superior manner. You must be willing to share this relationship with others in your firm and you must be able to convince the client that your firm can bring value. You will need to leverage relationships on both sides of the table as you examine the risks and rewards involved. This is an excellent opportunity for self-reflection and will require an individual to rely on specific characteristics.
Accountants and lawyers often remark that they did not go into their fields to become sales people. Most successful rainmakers in professional services admit it took them a long time to establish significant business and that they were more comfortable when the process seemed organic instead of intentional. To sell in an organic fashion implies that deals come about naturally. It sounds like luck when in fact it is often based on the seller’s ability to seize upon events in a timely manner and engage buyers by asking good questions to gather important information.
The ultimate goal in developing business is to create a mutually rewarding relationship with your clients. As you transform your working connection with a customer from one-off transactions with limited scope to that of ongoing trusted advisor and member of the client’s inner circle, both you and the client reap economic benefits, operational advantages and a rewarding sense of purpose. The client will always reach out to you for advice because you are knowledgeable, helpful, and available. Loyalty transcends pricing matters and logistics.
If you’re an associate attorney employed by a private partnership, you have two jobs instead of one. First, as a beginning lawyer, you need to gain knowledge and skills to effectively complete tasks to exceed the expectations of supervising partners as well as clients. Initially, you may believe this is the most important task-at-hand deserving all your time and energy. But if you’ve been working for a few years, you’ve probably noticed the ability to sell and acquire new business could be even more important to your long-term career trajectory.
Ten helpful ideas for young associates included in the article. For a reprint of this article as published in The Recorder, please email email@example.com.