...a competitive advantage for law firms may be the ability to collaborate instead of compete.
The growth in demand for legal services in 2017, according to Thomson Reuters Peer Monitor, was stagnant. That compares to an ever increasing spike almost every year prior to the Great Recession. As a result of this sluggish market, the competition among law firms for instructions has been described as being “fierce.”
Law firms are competing hard against each other, essentially with the aim of eating your competitor’s lunch before they eat yours. So, it might be surprising that a competitive advantage for law firms may be the ability to collaborate instead of compete.
Even in a stagnant market, the legal needs of clients have become increasingly specialized and global.
This is ostensibly the reason why firms are growing ever larger – planting flags across the globe and bolting on hundreds of lawyers from disparate firms. While there are a few of these mega-firms that attempt (I emphasize: attempt) to provide every category of legal services in every jurisdiction, most firms – even very large ones – naturally have gaps in geography or specialties.
However, those missing pieces should not limit a firm providing seamless service to their clients across the practice spectrum or around the world. There are terrific lawyers that are great to work with globally. They just happen to work in a firm that has a different name on it. You can provide a differential level of support and service to your clients by making sure you have developed an infrastructure of relationships with the right lawyers and law firms. Plus, you need to make sure that your firm has developed the internal capacity – the collaboration gene – and culture to collaborate effectively.
What does a collaborative infrastructure look like? Each firm has to devise the platform that works for them as each firm has its own unique geographic footprint, composition of practices, and historic connections.
However, I can tell you what it does not look like – simply a static list of firms to whom the firm refers work from time-to-time as called for by a client need.
Your relationships cannot live on a page or an Excel spreadsheet. True collaboration only really works when you develop an actual relationship with these firms. Seamless service and robust collaboration is the direct result of investing time and effort into the relationship.
Your relationships cannot live on a page or an Excel spreadsheet.
Just like cross-selling or (the new term) cross-serving only can occur internally if your lawyers know well the services and skills of their colleagues, that same level of familiarity is critical in working effectively across firms as well. The more you know about each other’s capabilities – strengths and weaknesses – the easier it is to work together.
Formal law firm networks can be a powerful tool to accomplish the above. They provide a ready-made platform of compatible firms and an administrative framework to facilitate collaboration.
There are usually frequent opportunities for network members to meet each other and share information about their firms’ competencies. Firms should carefully evaluate a network before joining. They should not simply look at the firms that are part of the network’s current roster.
Simply being a member of a great network will not necessarily result in lots of super collaborative activity.
Prospective members need to ask hard questions of the network’s leaders about the level and types of information sharing and propensity for members to truly collaborate. Simply being a member of a great network will not necessarily result in lots of super collaborative activity.
Lawyers need to invest time and effort in developing a strong relationship with network firms, as discussed above, to maximize the sharing of information about each firm’s practices.
The collaboration gene
Being a great athlete in large measure is dependent upon an individual’s genetic make-up. No matter how hard a mediocre physical specimen (like me) works out, peak performance will likely elude them without the right building blocks.
Similarly, an effective platform of relationships can only really work for you if your firm has a culture of cross-firm collaboration and lawyers who have a willingness to partner with another firm with a specialty or in a jurisdiction that your firm does not cover.
...really great collaborative firms have the gene that allows them to build the sandbox together with other firms.
I often hear and use the expression “playing well in the sandbox.” The “collaboration gene” is more than that. It is one thing to work with other lawyers once you have been positioned to work together – plopped into the sandbox. However, the really great collaborative firms have the gene that allows them to build the sandbox together with other firms. Lawyers at these firms have the skills and desire to forge strong connections using the techniques discussed above.
Differentiation by collaboration
No doubt about it, it is an incredibly competitive environment for law firms. Our clients are savvy and are demanding that we provide comprehensive solutions for their increasingly complex legal needs. The firms that can identify the right talent anywhere in world, work effectively together, and do so economically will differentiate themselves and attract new work from loyal clients.
[David Kaufman is the Director of Global Strategies at Nixon Peabody LLP. In this role, he manages and helps develop strategy for the firm’s international practice, international offices, and relationships with law firms around the world.]