Clients want to tap into swarm intelligence
The relationship between a client and its lawyer has traditionally been a personal one. Even after lawyers had started to work together in law firms, there still is this very personal relationship between the lawyer and the client. I have written about this topic multiple times, raising the question whether a client is the client of one partner or a client of the firm. I have raised this fundamental question on many occasions with partner groups and almost invariably the individual partner wants to ‘own’ the relationship with their client. As it comes to ‘client relationships’, partners have kept behaving pretty much like sole practitioners.
Arguably to a large extent also clients see the relationship with a lawyer as a very personal one. This is most prominently demonstrated if a partner decides to make a lateral move and switch firm. Data shows that under such instances over 50% of the clients decides to follow the partner to the other firm, even if this means an organizational nightmare. At the same time clients are complaining that law firm partners work in silos, don’t share information and are hesitant to invest in a relationship that they do not ‘own’. Those same clients are also increasingly expressing concerns that specialization in law firms has gone too far. Sure, clients like to consult every now and then with a partner who has an exceptional deep and detailed knowledge of a certain niche topic, but commonly clients would prefer their outside counsel to have a broader interest and knowledge.
All sectors of the economy are facing tremendous challenges
Law firm clients are real-life companies and organizations that must work very hard on a daily basis to remain relevant in their market. Almost every industry is facing new challenges these days. The banking industry, which has been going steady for decades, is now facing negative interest rates, a much tighter regulatory framework and stiff competition from crypto currencies and new entrants into their market. The energy sector is seeing transformative challenges it has never seen before. The automotive sector is disrupted by electrification and so has every other private or public sector comparable challenges of their own. All this calls for strategic ‘out-of-the-box’ thinking. Just applying experience from the past doesn’t cut it.
Helping clients navigate the changes in the market and help lead the way to new market opportunities and new business models, requires skills and creativity that goes well beyond what any individual could achieve. General Counsel were first to recognize this need. On countless occasions GC’s have voiced their desire to get broader input from their outside counsel. This is not about handling individual mandates, but about exploring new ways forward, which is crucial for any company's future existence.
The other day I was having a conversation with the GC of one of the world’s leading new technology companies. This particular company is enlarging its product line and its global footprint at a rapid pace. In doing so, the company faces a myriad of novel legal challenges that can make or break its very existence.
A multi-talented lawyer remains a white raven
This GC gave me two great examples of outstanding assistance from outside counsel. Example one was about a situation where the company was making a major investment in a certain country. As there were multiple countries that were very keen on attracting this investment, national and local governments were offering all kind of ‘sweeteners’ to make the decision fall their way. For this reason, the GC had engaged a tier-1 state-aid partner from a very reputable law firm. One might expect that a partner with such specific specialization would have a narrow and limited scope. Not this partner who was in his early forties. The GC told me this partner had such an exceptional understanding of the company’s business and strategic objectives that he had asked him to take the lead on all negotiations, way beyond just state-aid issues. Obviously, this partner would pull in other partners from his firm with other specialist knowledge, but it was him who was heading the negotiations and who had the lead. Unfortunately, this type of partner remains a white raven as this GC was not aware of any other partner at any of their panel firms across the world that would have this ability. This is a great example of a partner who, despite having a specialization, has maintained a broader knowledge of the law, has a deep understanding of the client’s business and who knows to tap into other partners when needed.
Involving third-parties in a workshop
The other equally rare example this GC gave me was about a workshop organized by one of their panel firms. One of the elite law firms that this company uses, has offered them to set up a one-day brainstorming workshop to discuss some strategic issues this company is facing, from many different angles. They did not only invite the legal team, but also members of the company's commercial, finance, production and engineering team. From law firm side also all kinds of experts were present. All of this was free of charge (although this law firm charges hefty rates (reduced) for all regular matters for this client). The best thing however was that they also invited other third-party experts. The GC told me that this workshop had been very professionally prepared and led. One day brainstorming and exchanging ideas from many different angles had provided several valuable new insights for his company.
We need swarm-intelligence to face strategic challenges
This article is meant to argue and demonstrate that lawyers should stop working as individuals and in silos. The changes clients are facing in today’s market go well beyond what any individual could offer. Clients want their law firms to make full use of ‘swarm intelligence’. Clients need access to all the knowledge, experience and creativity available within the firm. Clients also want to team up with lawyers and other experts at the same time to find new insights and solutions to the serious challenges they are facing. Working alone is sooo 2019, teamwork is the future.