Page 157 - MASTER COPY LEADERS BOOK 9editedJKK (24)_Neat
P. 157
Leaders in Legal Business
“association”) structure: Whilst fully integrated international or global partnerships have endless struggles
over their alignment and profit sharing systems, the Swiss verein structure which is more of a network of
independent national law firms does not require this. Their primary challenge will be to maintain or even
to improve profitability in their relevant national markets. Besides that, their global approach will lead to
additional challenges such as how to ensure that all partners align with the firm’s vision and implied
partnership ethos; implement a worldwide quality management system; and keep the “one firm” promise,
which is: We do not only look like a firm, we are an integrated firm.
These considerations should help our John Doe to take a decision about where to go: the elite way?
The global law factory way? He has to make a decision because there will no longer be an international
“middle of the road” law firm segment. Remember the words of political activist Jim Hightower that ring
true today and apply to John’s situation: “There's nothing in the middle of the road but yellow stripes and
dead armadillos.”
With regard to strategic positioning, John Doe’s firm has to take a decision. Both ways are not easy,
and require hard work and thorough discussions with partners and market observers. Strengthening the
existing network? Go down the Swiss verein route? Each decision will be met with skepticism, and the
structure of the partnership will look different from today — but it is the only way forward.
This is not all. Strategic positioning is the exercise of defining the firm’s place in the market. It has
a number of consequences that has been described more than once. To know — and to understand — the
place in the market is vital; otherwise there is a high risk of making the wrong growth decisions.
Client Focus
Every law firm makes a promise to clients: “We are the best thing that could ever happen to you.”
Clients tend to smirk when they hear this; from their perspective the relationship with law firms is difficult,
to say the least. Why is this the case? It seems that too many law firms do not stick to a really simple rule:
Know your client, and know yourself. In other words, know who your clients are and why they chose you.
Does that seem too simple? Right, it is that simple. Knowing one’s clients means far more than sending
Christmas cards, or inviting general counsel to lunch or even dinner (I have some news: GCs hate this). It
means knowing clients inside-out, knowing why their CEO can’t sleep at night, why their numbers are
down (or up), and what is happening in their relevant market. Today, clients are far more sophisticated
when it comes to legal procurement, with clear requirements and excellent knowledge about the market.
The second bit is: What do we have to offer, and why did they choose us? Not knowing the answer should
make managing partners extremely nervous.
Part of this exercise is innovation, by means of product innovation (which is what we know as
creativity) and service innovation. We all love to receive better service, day by day. Clients do, too.
Regarding product and service innovation, many articles and books have been written on these issues, hence
why there are so many ideas out there to better your client service in order to put yourself ahead of your
competitors. Just go out and start doing it.3
Alignment of Partners
It is odd, but whatever type of firm, they all claim to have and maintain a partnership structure.
Even those firms that have up to 1,000 partners (who don’t know one another and who need name tags at
their meetings for partners in order to differentiate themselves from the service personnel) hold themselves
out as partnerships. I am afraid this is an endless source of misunderstandings and causes strategic,
structural, and cultural mishmashes.
What do we mean by “the partnership model”? It is something very simple: two or more people
joining forces to pursue common goals with a view to achieving profit. That’s it. Very successful structure,
3 See, e.g., Markus Hartung & Arne Gaertner, From Idea to Action, MANAGING PARTNER MAGAZINE, September 2013.
150
“association”) structure: Whilst fully integrated international or global partnerships have endless struggles
over their alignment and profit sharing systems, the Swiss verein structure which is more of a network of
independent national law firms does not require this. Their primary challenge will be to maintain or even
to improve profitability in their relevant national markets. Besides that, their global approach will lead to
additional challenges such as how to ensure that all partners align with the firm’s vision and implied
partnership ethos; implement a worldwide quality management system; and keep the “one firm” promise,
which is: We do not only look like a firm, we are an integrated firm.
These considerations should help our John Doe to take a decision about where to go: the elite way?
The global law factory way? He has to make a decision because there will no longer be an international
“middle of the road” law firm segment. Remember the words of political activist Jim Hightower that ring
true today and apply to John’s situation: “There's nothing in the middle of the road but yellow stripes and
dead armadillos.”
With regard to strategic positioning, John Doe’s firm has to take a decision. Both ways are not easy,
and require hard work and thorough discussions with partners and market observers. Strengthening the
existing network? Go down the Swiss verein route? Each decision will be met with skepticism, and the
structure of the partnership will look different from today — but it is the only way forward.
This is not all. Strategic positioning is the exercise of defining the firm’s place in the market. It has
a number of consequences that has been described more than once. To know — and to understand — the
place in the market is vital; otherwise there is a high risk of making the wrong growth decisions.
Client Focus
Every law firm makes a promise to clients: “We are the best thing that could ever happen to you.”
Clients tend to smirk when they hear this; from their perspective the relationship with law firms is difficult,
to say the least. Why is this the case? It seems that too many law firms do not stick to a really simple rule:
Know your client, and know yourself. In other words, know who your clients are and why they chose you.
Does that seem too simple? Right, it is that simple. Knowing one’s clients means far more than sending
Christmas cards, or inviting general counsel to lunch or even dinner (I have some news: GCs hate this). It
means knowing clients inside-out, knowing why their CEO can’t sleep at night, why their numbers are
down (or up), and what is happening in their relevant market. Today, clients are far more sophisticated
when it comes to legal procurement, with clear requirements and excellent knowledge about the market.
The second bit is: What do we have to offer, and why did they choose us? Not knowing the answer should
make managing partners extremely nervous.
Part of this exercise is innovation, by means of product innovation (which is what we know as
creativity) and service innovation. We all love to receive better service, day by day. Clients do, too.
Regarding product and service innovation, many articles and books have been written on these issues, hence
why there are so many ideas out there to better your client service in order to put yourself ahead of your
competitors. Just go out and start doing it.3
Alignment of Partners
It is odd, but whatever type of firm, they all claim to have and maintain a partnership structure.
Even those firms that have up to 1,000 partners (who don’t know one another and who need name tags at
their meetings for partners in order to differentiate themselves from the service personnel) hold themselves
out as partnerships. I am afraid this is an endless source of misunderstandings and causes strategic,
structural, and cultural mishmashes.
What do we mean by “the partnership model”? It is something very simple: two or more people
joining forces to pursue common goals with a view to achieving profit. That’s it. Very successful structure,
3 See, e.g., Markus Hartung & Arne Gaertner, From Idea to Action, MANAGING PARTNER MAGAZINE, September 2013.
150
