Are your firm’s industry groups real?

In my work with law firms, it is extremely rare for managers to take seriously the need to set the firm and its lawyers apart from the pack when it comes to depth of expertise.  This depth should go far beyond legal skills.  True, clients don’t want to pay to train new associates how to write a contract or take a deposition; but I would venture to say that what irks GCs and corporate clients even more is paying to train partners and entire teams on the inner workings of their industry, their competitors, and their markets.  I am certain that this feeling underlies GC’s multi-year trend to bring more work in-house and spend less on outside counsel.
Clients expect firms to show their value by coming to the table with complete and deep industry knowledge, and functioning systems to support value-based execution of industry-focused client goals.  Law firm industry teams in law firms need to be real, from top to bottom.

As discussed in my previous post, William Henderson — Professor at Indiana Maurer School of Law and former Chief Strategy Officer at Lawyer Metrics –  knows legal market data and technology.  Bill recently presented at Wolters Kluwer’s ELM User Conference on the topic Bridging the Gap between clients and legal service providers.  In that presentation, Bill encouraged creative thinking and conversation.  My previous post fleshes out that thought, in strong support.  Data-based and technology-driven efficiency and spectacular results start with bold strategy born of open and innovative communication.

However, Bill’s ELM talk suggested that legal service providers de-emphasize expertise as a differentiator, finding that unimpeachable expertise is table stakes and firms’ resources should be focused elsewhere.  I disagree.   The vast majority of firms have not yet implemented their industry groups (or other expertise differentiators) as an efficient and focused line of business.

Industry focus must carry into every firm operating system.  Governance should follow focus:  industry group leaders should be responsible for profitability and utilization of the entire group.  Compensation should reflect industry priorities:  components of comp should reward revenue and efficiencies with new and existing clients in key firm industry practices.  Talent management and acquisition should track industry group goals:  management should view opportunistic laterals that don’t add to industry goals with skepticism, no matter the size of the book; and talent development should be directly related to industry topics.  IT needs should reflect industry needs and make clients “stickier” as a result.  Finance systems should track with discipline the metrics for industry matters and clients, constantly suggesting refinements in staffing and development to provide more client value.  And, quite obviously, marketing and business development should key off of industry strength.

In later posts, I’ll detail ways in which each firm operating system can and should reflect industry business lines in every law firm.  Try it, in a disciplined way.  Imagine how impressed your clients will be if you can demonstrate that your firm is singularly focused on ensuring that every business system feeds your understanding of and service to their world — their industry.

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