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Are poor Business Planning and Business Development holding back law firms?

Who are the cultural heroes in a commercial law firm? Take a moment to build up a mental picture of them…

Our guess is that two answers pop up again and again:

The first is the senior lawyer working through the night to close a deal. He (it was a he, right?) is barking instructions to his exhausted team. He roves over dozens of piles of paper, swooping on details and spotting gaps that no-one else has identified. He barely touches his black coffee as he drives everyone towards the deadline that he himself set 72 hours ago.

The second is the rainmaker, just back from a very satisfactory lunch with a newly-confirmed client. He settles in to make the first of a dozen phone calls to his good friends at more established clients. He waves away a couple of associates who are waiting hesitantly at his door; they’re perfectly capable of solving whatever legal problems are bothering them.

You may say that these are clichés or caricatures, but we’d argue that they’re archetypes. They’re only lightly fictionalised. Many firms believe that these two personality types are sufficient for their future success; provided that they have a lot of the former, and a few of the latter, they should be fine.

When we ask our legal clients about business planning, there’s a feeling that what’s wanted is not planning but execution. Enter our friend, working through the night to make the deal happen.

When we ask them about business development, there’s a similar feeling that it’s not so much about business but personality. Enter our second friend, lunching through the week to work his magic on clients.

These two types may well have been responsible for the success of many firms. But we wonder whether they’re enough in the modern era? We all know that the landscape’s changing: more sophisticated and challenging buyers; specialist competitors[1].; commoditised low-end services.

Taken together, these changes will mean that our rainmaker has to buy more and more lunches. Our senior lawyer will need more and more of that coffee. Even then, geniality and hard work may simply not be enough to navigate the hyper-competitive marketplace.

Is there a need for something more sophisticated, something more “corporate”, structured, co-ordinated, purposeful? Beyond the individual heroes?

We think the answer is yes. In particular, the large, international full-service providers will need to find an answer to how they can actually benefit from their network, rather than being weighed down by their higher cost structure. They need a more conscious approach to cross-selling and delivering a seamless service across borders from pitch to execution.

However, there are barriers to overcome. We often see lawyers being reluctant to engage in business planning and business development (‘BP’ and ‘BD’). Apart from the allure of the past, there seem to be three main reasons:

It’s not in their blood. Lawyers tend to be happiest solving legal problems at their desk or, perhaps, talking to existing clients. Seeking out prospects? Brainstorming with colleagues? As Phoebe from Friends brilliantly said: “Oh I wish I could, but I don’t want to”. And the few natural rainmakers don’t spread their magic, so cross-selling does not happen reliably.

It’s not in their training. Lawyers are trained to be ‘right’. And BP / BD are inherently speculative and imprecise activities. Don’t they belong in a business, rather than a professional firm?

It’s not in their immediate interest. Time spent on BP and BD is time NOT spent on client matters. Globally co-ordinated initiatives tend to lose out to pressing local challenges. And often the reward systems don’t support such initiatives anyway.

Maybe there is a good reason for this. Maybe there is no value in devoting more coordinated effort to do BP & BD well. But what if there were?

We want to test a hypothesis: Poor Business Planning and Business Development are holding firms back.

We’re conducting a study to find out. We’ll be asking all sorts of questions. What do firms do at the moment? Is there a bigger prize? What better way to plan and develop business might there be? What could law firms learn from other professional services firms, and from other industries? Do firms need a more professional approach to these topics? Does it matter to their health or their survival? What needs to happen in law firms for change to become possible?

We would welcome your views. It’s just possible that our two archetypal heroes will save the day, but if you worry about it, and if you’d like to learn more about our study, please contact us.

[1] Juve Rechtsmarkt, Feb 2015: 54% of large multinationals based in Germany are increasingly using boutique specialists over their large international law firms, to bring down the cost of legal advice.

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