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  • Your expensive real estate

    Almost invariably business law firms have their offices in the most prestigious locations in the tier-1 cities in the country. As where the headquarters of large, listed companies are predominantly found outside of the city centers or even in more rural areas, law firms occupy prime property. After salaries, rent and occupancy are the biggest cost for any law firm. It is not just the uber-expensive location, but there is typically also a lot of ‘unused space’. Law firms tend to have a very large lobby, designed to impress visitors. There will be more meeting rooms than ever will be used at the same time, there will typically be an inhouse restaurant or cafeteria, and sometimes an auditorium, a bar or a rooftop terrace. Despite the very high price per square meter, there is hardly any urgency to use the space as economically as possible. For a law firm, more perhaps than for any other type of business, their prestigious location and slick and expensive office, is closely tied to their identity. Being on a triple-A location in a fabulous office is part of who they are. It oozes a sense of prestige and success that radiated to clients and employees. The office is used as an endorsement of the brand. A law firm that has a prestigious office in the heart of the financial business district, must be better than a law firm that is in an efficient modest building on an industrial estate. That is what everyone will believe. I even personally know of a newly started law firm of young lawyers. At first they occupied a relatively small office outside the city center. Despite their great quality they struggled to attract the big clients and the right talent. Then they decided to be bold and signed a contract for renting one of the top floors in a newly built skyscraper that is one of the tallest in the world. Although this was at the time way too big and far too expensive for this small law firm, it soon paid off tremendously. Because of their now super-prestigious location, new clients came in and talent started to apply for jobs. For this law firm, in hindsight, the location became instrumental to their success. Work from home? Maybe not Now that is seems that the worst of the pandemic is behind us, law firms are discussing how and when to get safely back to the office. I have written about this before. Although with the Delta variant, the outcome of this discussion keeps shifting, it looks like a majority of law firms will opt for a hybrid solution, where employees will be required to be 3 days per week in the office and are allowed to work 2 days from home. This may sound reasonable and smart to you, but to me it sounds like a bad idea. Allow me to give three arguments why hybrid working maybe is not so smart. 1. Security and confidentiality For any law firm, confidentiality is core to its existence. That’s one of the reasons why we protect the attorney client privilege. Lawyers typically work with highly sensitive confidential information that you don’t want to end up in the wrong hands or even worse, on the street. For that reason law firm offices are set up like a fortress, almost impossible to penetrate without permission. Both physically and electronically. No visitor will ever be allowed on a ‘production floor’ or access to the lawyers’ network. When lawyers are working from home, there are no such physical or electronical barriers. There is no oversight who sees what document or overhears a telephone conversation. This is waiting for disaster to happen. You take your office and data security serious for a good reason. Don’t create multiple weak spots. 2. Training on the job and mentoring Learning to be a good lawyer is dissimilar to learning to be a financial controller or a software developer. The latter two are mostly about mastering technical skills. Becoming a lawyer is different as transfer of experience and development of human skills are core to the profession. You become a great lawyer, only by studying the behavior of another great lawyer and copying part of that. Observing, listening and asking questions are crucial. In theory it might be possible to get a law degree by only studying remote. It is impossible to become a lawyer the same way. Proximity and person-to-person interaction are needed. If there is less of this, the quality of the lawyers will absolutely decline. Don’t forget, many lawyers are introverts by nature. Give them half a chance and they will stay comfortably at home. 3. The ecosystem Last but not least, your fabulous office on that prestigious location. It is not just that because you have spent so much on the office, you should use it. In theory you could scale down or move to a less expensive location altogether. The office as it is, is more than just a symbol of the past. Your office creates an ecosystem, that itself is part of a larger ecosystem. This ecosystem is where talent thrives and where the constant buzz creates a sort of ‘magic’ that is converted into cash. Together in one space, one building and one business district, people will achieve more than they ever would individually behind their screens at home. I am not aware of any business law firm, which does not use it’s location and office to attract talent. It is an attractive privilege to work in the lively and hectic business district, where you are surrounded by great restaurants and bars to meet and hang out. Where you can go out during lunch break and browse nice shops. Maintaining the ecosystem could well be core to a law firm’s success. Don’t let that slip away. Get everyone back at the office and allow for few exceptions, certainly not structurally one or two days a week. Show leadership, bite the bullet, be though. Later they will thank you for it.

  • How to understand Chinese Lawyers?

    In 1992 American author and relationship counselor John Gray published a book that instantly made him famous. The book has sold more than 15 million copies and it was the "highest ranked work of non-fiction" of the 1990s, spending 121 weeks on the bestseller list. The title: ‘Men Are from Mars, Women Are from Venus’. This title must have been a stroke of genius and it has been applied to many other situations in which structural misunderstandings between certain groups exist. In the context of this article one could perhaps paraphrase and say ‘Most Lawyers are from Mars, and some Lawyers are from Venus’. Working with lawyers from all parts of the world, we find remarkable similarities despite cultural differences. If you have been to the annual IBA meeting, you will know what I mean. There is this instant feeling of recognition and familiarity. And yet there is one exception: for it typically can be difficult to understand lawyers from China and connect with them. Sometimes it seems PRC lawyers are from a different planet even though superficially we would expect all lawyers to be the same. TGO Consulting has been working with China for many years and we have developed some great relationships and cherished friendships. We find China a great source of inspiration and innovation. We learned through experience that we fundamentally need to adapt our way of thinking and reasoning when we communicate with our Chinese friends. This article, which is co-authored by my good friend Mike He, is to help lawyers outside China to better understand where Chinese Lawyers are coming from. In doing so, we aspire to contribute to less frustration and surprises, and a smoother cooperation or referral business. Understanding where China’s legal industry is coming from The Chinese legal industry started only around 1990. So, unlike the rest of the world, in China the legal industry is only a few decades old. After the recovery of the lawyer system in China in 1979, lawyers were viewed as civil servants who worked in state-run law firms. It is not hard to imagine that lawyers then were reluctant to develop new practice areas or new clients as they received fixed salary no matter how much they contributed to the firm. Thanks to some pilot programs in 1988 which encouraged “more pay for more contribution”, many law firms transformed into cooperation firms and finally partnership firms in 1990s which allowed lawyers to keep a percentage from the revenue they bring to the firm. With the growth of the Chinese economy and release of the long-suppressed impulse for wealth, the percentage a partner can keep reaches a high level and a strict eat-what-you-kill model gradually becomes the dominant remuneration model for most Chinese law firms. The major advantage of eat-what-you-kill model is that it greatly motivates the partners to develop their own clients, business and revenue. For partners at their early stage, they can easily control the cost (such as lawyers’ salary) and maintain it at a relatively low level so that they could earn more margin and flexibility. For law firms, it is also one of the easiest ways to attract more partners and build a large-scale law firm instantly. As partners mainly get profits from their own revenue and clients, selfishness and low professionalism breed. It is very hard for partners to refer cases to each other or cooperate on the same projects due to lack of profit-sharing mechanism as well as trust on each other. It is not hard, however, for a partner to leave a firm with his or her clients due to lack of loyalty to the firm and bond to other partners. Many Chinese partners, even today, are driven by the unlimited impulse for the pursuit of fortune and independence. This in many aspects is fundamentally different from lawyers in the rest of the world where in various gradations there is more emphasis on cooperation and the firm as a whole. Most partners in Chinese law firms would have their own P&L and only the bare minimum of costs would be shared. It will come as no surprise that this form of partner remuneration will drive partner behavior. Moreover, it also confuses the clients when they feel the astonishing gaps in lawyers’ professional skills and service between different teams within the same firm due to the lack of standard recruitment and training at the firm level. One should also not expect commitment from other partners unless there is a strong monetary incentive. Only 1% of law firms in China has a lockstep profit sharing system. Many of today’s partners in Chinese law firms have completed a study and gained experience in the US and the UK before setting-up or joining a law firm in China. As the result of the study, exchange or working experience of many Chinese managing partners in UK and USA in 1990s and early 2000s, they brought the Prometheus fire - lockstep remuneration model – from Magic Circle firms in UK to the Chinese legal market. In 2000s, a very limited number of Red Circle firms started their lockstep reform. The outcome is mixed. Thanks to the (modified) lockstep reform, one particular firm developed so quickly that it became one of the top tier Chinese law firms within a relatively short period of time. The lockstep reform created a sense of altruism as the partners there seem to care more about how to jointly pitch a giant/top client and develop it as the client of the firm instead of worrying more about who this client belongs to and how much margin he or she can get. Moreover for this particular firm, the lockstep reform also contributed to the increased investment on the firm’s branding, facilities, administrative service, recruitment and training as a whole. Many young talents from international law firms chose to join the firm as they were quite used to its similar remuneration system, and its high standard of talents and professionalism. Likewise, many multinational companies also chose to hire the firm as it can provide them with united strength from different offices and different practice areas. On the opposite side, another firm who adopted a pure lockstep approach encountered a total “Waterloo”. Many talents left due to the reform. It was not until 6 years later that the firm involves “merits” evaluation into its remuneration system. Why is the outcome so different? The two examples unequivocally show us that lockstep is certainly not the ‘holy grail’ for Chinese law firms. Lockstep, in theory, can create a sense of common interest, generate more resource to key clients, encourage cooperation, attract partners who value professional performance, and gain comparative advantage when the market competition is fierce. The problem is, essentially, seniority must not be the only indicator that measures a partner’s contribution to a firm. Otherwise like in the second and failed example, young, energetic rainmakers may vote by their feet as the result of the long-lasting sense of “exploitation” by those senior partners who earn much more according to their points while contribute much less according to their profit-generating performance. 95% of Chinese law firms still has undiluted eat-what-you-kill Facing both the challenge of talent loss as well as the demand of deeper integration among the firm, quite a few top-tier Chinese firms tend to embrace “modified lockstep” nowadays (including the above-mentioned two firms now). About 4% of law firms has adopted a hybrid system of profit distribution, which we are also used to in other parts of the world. Eat-what-you-kill model remains no doubt the most popular model among Chinese firms. Usually, an equity partner in such firms submits 10%-40% of his or her total revenue to the firm in return for its light-touch contribution to branding, office facilities and office administration. The partner then has to pay from the remaining 90%-60% of his/her revenue the salaries of the lawyers in his/her team. Whatever remains after the cost of being with the firm and the salaries of the lawyers in the team have been deducted is the personal income of the partner. Typically, the partner will end up keeping 50%–70% from the total revenue he or she earned every year. Getting to know the Chinese legal market The legal industry in China is developing at a rapid pace. By the end of 2020, there are more than 510,000 Chinese lawyers and 34,000 Chinese law firms in China. Non-litigation practice areas such as capital markets, M&A, private equity and venture capital are booming in developed regions like Beijing, Shanghai and Shenzhen. Traditional litigation and routine legal consulting for enterprises are still the dominant practice areas for lawyers in less developed regions. At least 5 PRC law firms have more than USD 1 million in profit per equity partner and of some of those you have probably never even heard the name. There is another PRC law firm which has 71 offices and over 5,000 lawyers worldwide, and also the name of that firm you likely would not know. The vast majority of lawyers outside China has little or no knowledge or understanding of what is going on in the Chinese legal market. There are great opportunities for cooperation and doing business. This is the first in a series of articles that will help to bring you up to speed. The second article will be published later this year. About my co-author Mike He My good friend Mike He is the co-author of this article. Mike holds an LLM from Harvard and he is the Chief Strategy Officer at Merits & Tree Law Offices. His firm is a typical example of a hybrid remuneration system. Unlike many traditional Chinese law firms, M&T partners share M&T’s profits (one firm, one profit pool for all) instead of splitting the revenue (one firm, different profit pools for different partners and their teams). For those young partners, the firm almost fully focus on their annual financial performance so that they could be encouraged to generating more clients and increasing their revenue. For those senior partners, the firm divide the evaluation elements into two major parts – (A) annual financial performance and (B) other factors such as historical contribution, seniority, and management – so that a sense of common interest can be formed while their annual merits can also be recognized and appreciated. Through this hybrid remuneration system, M&T strives to build a “one firm” firm with excellent professional quality, integrated cooperation and self-motivated talents. It is now widely recognized as one of the most promising law firms in China.

  • Now that the holiday is over

    We are now well into September. The holidays are behind us and in the early morning there is a slight scent of autumn in the air. The legal industry almost desperately needed the summer break. The workload has been high and the work from home left everyone fatigued. After we re-energize, things will surely be better, or will they? Around the world, companies and law firms alike are trying to get to grips with the future of work. Are we going to ask everyone to get back to the office, or can people continue to work from home? Are we going to demand that everyone at the office is fully vaccinated or at least can show a recent negative test result, or do we consider this outside the domain of an employer? Can we organize larger in-person events like seminars or even a partner retreat, or is this still too risky? These topics are simultaneously on the table in boardrooms around the world. They are wrapped in uncertainty regarding resurgence of the virus, the effect of vaccinations and how governments are going to respond. We are absolutely not out of the woods yet, and it seems that no one know what the endgame will be. Will mask wearing become as normal as let’s say wearing socks? This month traveling came back with a vengeance Just looking at our own situation at the moment, there has been a seismic shift. After one and a half year working from behind our screens, now there is a frenzy of in-person meetings. It seems as if everyone is seizing the possibly short window of opportunity to schedule meetings, lunches, dinners and partner-retreats. That means that this month we will be clocking more airmiles than in the whole 20 months before. What also becomes apparent is that the easing of restrictions is not evenly spread around the developed world, or even Europe. As some of you may know, I am a strong believer in the power of binging people together in one room, one building or even one business district. A recent academic study showed that this even creates measurable economic benefits. Brought together people and businesses are more creative and make more money than if they are alone. After the demise of Kodak, other businesses in Rochester New York, which were totally unrelated to Kodak, produced fewer patents and the patents that were created were of less value and importance. If a successful company takes office in an office building, on average the revenue of the other businesses in that same building grows by 2%. People do become more successful if they are part of an ecosystem. This builds a compelling case for getting everyone back to the office and for maintaining in-person relationships. Remote working and Zoom simply don’t cut it. We need to focus on sustainability! To be frank, on the one hand I feel happy that we can finally meet our clients again in person after more than one and a half year. Our clients are happy that their partners can meet. Associates are happy that they can hang out with their team and their peers. On the other hand, personally I feel guilty about the vast amount of air-travel that I am going to do and I know that this will not be sustainable on the long run. Something will need to change. At TGO Consulting we have committed ourselves to reducing our carbon-footprint by 33% over the next three years (as compared to 2019). As air travel out of all the things we do has the highest impact, it will mean that we will travel less and on top of that we will compensate for all CO2 emissions each time we do travel. All this means that, as far as we are concerned, Zoom is here to stay. Easily 33% of all meetings can be done remotely, especially those about operational or factual matters. We are encouraging all our clients to do the same! Introducing Mansi Jasuja Over the past two years or so, we noticed that businesses are increasingly asking their law firms question on sustainability and diversity. Today this topic is almost universally part of any RFP or pitch. For law firms it is getting harder to get on a panel or remain on a panel if they cannot show that they have at least some sort of sustainability and diversity policy in place. It is not only clients that ask inconvenient questions, but also recruits are shunning firms that do not care about sustainability and diversity. Because we care about sustainability and diversity ourselves, and because we increasingly get questions from our clients, and because we see a wider need and opportunity in the market, we have set up a Sustainability Practice and developed the TGO Sustainability Scan©. Both are now ready for launch. Our Sustainability practice, which also includes diversity, is headed by Mansi Jasuja. Mansi has an impressive track-record and over a decade of experience with international companies and organizations. We are thrilled to have Mansi as part of our team. The TGO Sustainability Scan© has been developed and perfected over the past year. It is, to the best of our knowledge, the first of it’s kind specifically tailored to the legal industry. The scan will comprise all aspects of sustainability and diversity in a firm. It will provide law firm leaders with a clear and practical overview of the current state and provide actionable handles for improvement. It is advisable to repeat the TGO Sustainability Scan© on a yearly basis in order to track progress. It provides law firms around the world with a meaningful answer when clients or recruits ask the questions. If you are interested in improving your sustainability and diversity score, just send an email to: mansi.jasuja@tgo-consulting.com

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  • contact | tgo consulting

    offices AMSTERDAM ​ ​ Grote Bickersstraat 74-78 1013 KS Amsterdam ​ Netherlands ​ (starting 1 November 2021) NEW YORK ​ ​ 230 Park Avenue New York, NY 10169 ​ United States ​ TGO OFF-SITE RETREAT ​ ​ Yllestads Skola 1 521 95 Kättilstorp ​ Sweden ​ (operational 1 January 2022) ​ ​ administrative centre​ contact details for general enquiries ​ PO Box 87835 2508 DE The Hague Netherlands ​ ​

  • home | tgo consulting

    what we do TGO Consulting are award winning business consultants focusing on the legal sector. We have a strong client base spanning most of Asia, Europe and the Americas. Our approach is fact based and result driven. We help our clients to maintain or improve their profitability. We work on the basis of a Financial Business Analysis© for which we have developed our own unique standardized model. This FBA© will highlight low hanging fruit and provide a benchmark against the market. Having decades of experience in the legal industry, we know the dynamics of partner groups inside out. During the process this will help overcome resistance and create buy-in. "everything must change for things to remain the same" - Guiseppe Tomasi di Lampedusa - Your expensive real estate How to understand Chinese Lawyers? Now that the holiday is over articles of interest about us If it comes to serving a global client base and experience in working in different jurisdictions across the world, TGO Consulting is second to none. While understanding your home market and culture, we bring a wealth of experience in best market practice around the world. We know the legal industry inside out, past, present and future. We know your competitors and we know your clients. we strongly focus on enhancing our clients’ profitability the power of truly offering global best practice our new book Right now the world is facing unprecedented challenges. The business of law no exception. A New Dawn helps lawyers navigate the crisis. Practical and easy to read, just what you need today. a new concept There is no linear relation between time and value. We created the Creation-Production-Divide Concept©, a revolutionary new way to explain where the value is. This concept will fundamentally change the business of law. we strongly believe being a lawyer is about human skills a human-centric approach Being lawyers ourselves and having gained almost two decades of experience in private practice and in-house, we understand the dynamics of the partner group like few others. Although we always focus on our clients’ financial performance, we are strongly aware that the business of law is a human business before anything else. Understanding peoples’ drivers and behaviours is key to achieving lasting results. power curve Succession remains a sensitive and complex topic. The TGO power curve© analysis immediately shows succession and leadership vulnerabilities in the firm. This is just one of our data-based models in use. in the press 1/1 Interview on legal technology in La Gazette du Palais 未来十年,律师事务所的五大趋势 Article on the future of the legal profession Feature article in ACC Docket on how to prioritize for inhouse lawyers

  • about us | tgo consulting

    about us The world is awash with consultants that share wisdom from the past. Some of them even once had impressive careers as managing partners. Others have gathered wisdom without ever having been in 'the trenches'. We at TGO Consulting believe that the strategies that have worked well in the past are not necessary what is best for tomorrow. If you do what you did, you get what you've got. In order to navigate the future, fresh, critical and independent thinking is needed. No recycling of old tricks and no parroting other people. We at TGO Consulting will always keep thinking independent, critical and out-of-the-box. We have an unrivalled ability to innovate. "if you do what you did - you get what you got" The TGO Value Matrix© shows that ‘value’ is related to the Return On Investment for the client (to what extend the investment in legal fees contribute to bottom-line profit) and the level of Commoditization (the number of experienced lawyers, qualified for the matter). There has never been a linear relation between time and value. We invented the Creation-Production-Divide Concept©, a revolutionary new way to explain in what part of the process lays the value to your clients. This insight is widely considered a gamechanger in the industry. Succession remains a sensitive and complex topic. The TGO power curve© analysis immediately shows succession and leadership vulnerabilities in the firm. This is just one of our data based models in use. We have developed the TGO Sustainability Scan©, precisely tailored to the legal profession. Our sustainability practice is headed by Mansi Jasuja who is an internationally renowned expert on Sustainability and Diversity. “Innovation distinguishes between a leader and a follower” - Steve Jobs - founders TGO Consulting was founded by Jaap Bosman and Lisa Håkanson, two lawyers with over a decade of experience. Besides a legal degree, Jaap also holds a degree from one of the world’s most prestigious design schools. This defines our dna. The unique combination of legal experience and knowledge and creativity gives TGO Consulting a competitive edge and is reflected in our vision and approach. ​ ​ Jaap Bosman ​ Lisa Håkanson Read More our social responsibility At TGO Consulting we are committed to making a difference in society. This commitment is deeply embedded in everything we do. Integrity, decency and sustainability are three of the fundamental pillars on which we build our business. We will always strive to do the right thing as it comes to people and planet. In doing so we have pledged to reduce our carbon footprint by 33% over the next 3 years. This will mean less travel and if we travel we will offset the carbon emissions created. It also means that we will preferably only buy sustainable materials and equipment. We will use all our stuff as long as possible and make sure it is properly recycled when it finally reaches the end of its lifecycle. supporting culture We are members of ‘Die Gesellschaft der Freunde von Bayreuth’ (Society of Friends of Bayreuth). The Bayreuth Festival is one of the most prestigious musical events in the world. The passion and fervor it instils, year after year, makes it absolutely unique. The festival is held in August. Each artist is giving up their summer break in order to perform at the festival. The Society each year since 1949 makes a substantial financial contribution in order to make this all possible.

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