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Deborah Farone, left, and Heidi Gardner at the LMA Northeast Regional Conference. (Photo by Gregory Beltre.)
While niches may lead to riches, a changing legal marketplace is also placing a premium on collaborative teams.
That’s because legal and business problems are increasingly complex — and multidisciplinary groups can generate superior business outcomes, according to Heidi Gardner, a distinguished fellow at Harvard Law School and author of “Smarter Collaboration” (affiliate link).
In a recent panel at the Legal Marketing Association’s Northeast Regional Conference in New York, Gardner focused on how lawyer collaboration can supercharge firm profitability, solidify client relationships, and even ease technology adoption.
“Smarter collaboration: It’s a business imperative,” she said. “It’s absolutely essential that we understand what this is and what it isn’t.”
Here are some takeaways from the discussion, hosted by Deborah Farone of Farone Advisers LLC.
An Apt Acronym
There’s at least one term from the business management world that equally applies to legal practice: VUCA, or “volatility, uncertainty, complexity, ambiguity.”
The “C” for complexity is the foremost VUCA item for legal marketers to remember, according to Gardner.
With VUCA on the rise, today’s problems aren’t like a jigsaw puzzle that snaps together, she said, but more like the moving staircases in the “Harry Potter” movies, in which interconnected parts shift the direction entirely.
This creates a necessity for collaboration across practice groups and underscores the benefits of diverse viewpoints.
“Our problems are highly complex in ways that, if you only focus on whatever you can see through the lenses that you wear, there’s a good chance you’re going to be missing all of the sort of second- and third-order effects of those choices you’re making,” she said.
1+1 = … >2
While the quirks of the law firm structure can present big challenges to cross-practice collaboration, such efforts can also bring a major payoff.
Gardner presented data detailing a law firm’s revenue for clients served by one practice group versus clients served by multiple practice groups. (The data was “disguised” to fully anonymize the firm, but “the numbers are very representative of reality,” she said.)
The data shows that when a firm has two practice groups serving a client, they generate on average three times more revenue than each practice group would’ve generated on its own.
“And it keeps growing that way,” Gardner said. “One plus one plus one equals five or more.”
She described one firm that had a client served by five practice groups with a revenue multiple of 26.
“That’s massive upside,” she said.
Multiplying Value
Of course, clients wouldn’t be paying these bigger bills if they didn’t perceive increased value from the services they’re receiving.
For Gardner, cross-functional teams excel in this area as well.
She gave the example of a client looking for a top labor and employment lawyer — which could be found in just about any large firm.
But if that lawyer were working with a team of antitrust, tax, and real estate practitioners who all know the client’s industry and the general counsel’s goals, the team can become integral to the client and difficult for competitors to dislodge.
“So it’s not just that in any given year they generate more revenue and profitability,” she said. “It’s that over time there are significantly more valuable relationships.”
Talk to the Risk
Whether you’re fostering cross-practice collaboration, leading a project to upgrade your CRM, or answering a major RFP, you’ll inevitably face the challenge of persuading stakeholders to act.
Gardner suggests a focus on risk tolerance as a way to frame your message, sharing a personality spectrum ranging from “risk spotters” to “risk seekers.”
If you were persuading a “risk spotter” to adopt a new technology, Gardner said, you’d want to focus on how thoroughly all of the bases will be covered. For a “risk seeker,” by contrast, you’d want to focus on all of the features they could miss out on if they pass up the product.
The same goes for clients — even if they haven’t answered a personality questionnaire, you can gauge their risk tolerance by, for example, the questions they’d typically ask.
Gardner described one top rainmaker who will respond to an RFP by calling the general counsel and asking which aspects of it are most important to them.
The GC will usually respond at length to such a request, excited to explain the thinking behind the RFP. This will allow the firm to tailor a pitch exactly to the potential client’s thinking.
“We know that it is a rare instance when partners are taking that very client-specific, client-centric mindset to the smallest things like how they present the data,” she said.
“But getting your partners to think along those lines and equipping them to have that tailored mindset can really help people stand apart.”
Jeremy Barker is the director of content marketing for Breaking Media. Feel free to email him with questions or comments and to connect on LinkedIn.
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