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  • 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. Industries face geopolitical issues, supply chain disruptions, rising costs and increasingly hesitant end-consumers. Investors, who have been seen record after record, are now facing a bear market. The energy sector is seeing a combination of 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. Recently I had a conversation with the GC of one of the world’s leading new technology companies. This particular company is enlarging its product portfolio 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 abroad. 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 narrow 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, has offered them to set up a one-day brainstorming workshop to discuss the 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. The best thing however was that they also invited other third-party experts at the firm's expense. The GC told me that this workshop had been very professionally prepared and conducted. One day brainstorming and exchanging ideas from many different angles had provided several valuable new insights for his company. No need emphasizing that this became the start of a close relationship, that made the law firm a lot of money. 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’. At TGO, we often call this the process of 'Melting the Brains'. 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 2021, teamwork is the future. At TGO Consulting we have extensive real-world experience in helping elite law firms to truly collaborate, use and apply swarm intelligence at the benefit of their clients and their firm. We have a proven track record in helping to 'melt the brains'. Once the process of ‘melting the brains’ really takes off, this will be clearly reflected in the financial performance and the reputation of the firm. As such the program will easily pay for itself. Please contact us to find out how we could help your firm!

  • Is bigger really better?

    Remember the Airbus A380? It is the world’s largest passenger airplane. A humongous double-decker with a wingspan of 80 meters and a max take-off weight of 570.000 kg. The A380 has a maximum seat capacity of 853. The first plane was delivered in 2007, the last one in 2021. It certainly has not been the commercial success that everyone envisioned when setting off on its 30 billion Euro development. Obviously the aviation industry and the legal industry are not comparable in any way. What both have in common is the paradigm that bigger must surely be better. Perhaps even more than any other industry, law firms can become obsessed with the scale of numbers. For many law firms size equals success. The bigger the firm, the more successful it must be, right? Well, in reality probably not. Let’s analyze the merits of size and while we’re at it, dismantle some myths along the way. The metrics of size On a basic level the required size of a law firm will depend on whether it is a full service firm or a boutique, and on having a national or an international practice. Boutiques that strongly focus on one practice area or industry do not need to be sizable to serve their clients and be commercially successful. Around the world there are numerous examples of extremely profitable high-end boutiques that are less than 100 lawyers in total. High-end full service firms would by nature need to be bigger than the boutiques. For a full-service firm, the engine is typically the Corporate/M&A practice that will need to have a certain size in order to handle multiple complex transactions at the same time. M&A is considered the ‘engine’ since transactions typically generate a lot of spin-off for other practice areas such as Competition, Finance, Employment, and so on. In order to deliver the required level of service, each of these departments also has to meet certain minimum size requirements. If the firm is aiming at the top-bracket in their market, there are however not only minimum size requirements, but equally, maximum size-limits for each practice group. Allow me to illustrate this with the example of Employment as a practice group. Any full-service elite firm outside New York and London, would probably need about 2 employment partners with a team to service their transactional needs. As it is unlikely that the Employment practice will get 100% of their work through M&A, they will also have to find employment clients of their own. The problem is that in most markets there simply is not enough high-end employment matters around, so the Employment team will feel forced to accept mid-market work which does not fit the firm’s strategy and for which it will be extremely hard to charge the normal hourly-rates. Not to mention that on top of that conflicts with potential M&A clients will further limit their market. While there is, depending on the strategy and on the market, always a minimum size for a full-service elite law firm, there also pretty soon is a maximum size, after which the average quality of the practice will decline. Too many partners for the amount of strategic mandates, will inevitably increase the volume of less profitable plain vanilla work. When practice groups become too large they will feel forced to take on lower quality work to meet their targets. This will in the end increase the profitability gap between the leading successful practices and the rest. This will over time result in a ‘two-speed’ firm, where part of the partners is highly successful and the others are structurally trailing behind. No need highlighting that this on the long run will create tensions. Economies of scale The past two decades have been the heydays of law firm mergers. Merging was not just fashionable, it was generally considered the ‘silver bullet’. Many firms that had a weak performance merged with another firm that often also had a weak performance, resulting in one bigger firm that still had a weak performance. Merging rarely is the solution to a fundamental problem. Law firms also seek to merge for other reasons like entering into a new market. Take for example the UK magic circle firms looking for a foothold in the lucrative US market, or the mergers between UK and Australian firms hoping for a lucrative piece of the Chinese market. Both endeavors did not work out as planned. Undeniably also some of these mergers have been a great success. In 1999 Allen & Overy set up shop in the Netherlands by grabbing the 35 best partners of the renowned Dutch law firm Loeff Claeys Verbeke, which then ceased to exist. A&O almost instantly became a top-player in the Netherlands. It is not only hope and despair that drive law firm mergers. Increasing the power to invest in technology or marketing have also become motives. And there’s the FOMO category: fear of missing out. Others are merging, they must have a clever plan, so our firm should also merge because bigger is better. The downside of size When a law firm becomes too large for the market they are in, the average quality of the partners and the mandates will go down. The spread between partners and between practice groups will grow, and there will be a high risk of becoming a two-speed firm. Also with every expansion of the partner group, the firm will become harder to manage. Beyond a certain size, partners do not really know each other, which will hinder strategic collaboration, team spirit and firm culture. Above a certain size, partners will become more focused on their own interests and even less on the firm’s interests. Partners feeling the pressure to perform will increasingly feel frustrated by conflicts of interest that prevent them from taking certain clients. Last April, Dentons, a global giant with more than 10.000 lawyers, lost a $32 million malpractice law suit as the court rejected their claim that their Swiss Verein structure would allow them to serve conflicting interest as long as the clients were in different countries that were technically independent. The court did not buy that. The Big-4 Two weeks ago, at the end of May, it transpired that global accounting giant Ernst & Young is weighing a historic separation of EY’s audit and advisory businesses after years of criticism over perceived conflicts of interest between the two. Auditors are tasked with holding companies’ management to account and resisting pressure to sign off on numbers without proper evidence while their advisory colleagues prefer to keep clients sweet to generate fees in areas such as tax, deals and consulting. In conclusion The main message in this article is that law firms would be well advised to stop pursuing size for the sake of it. In the end profitability is more important than revenue, and strategic focus and a high-trust close-knit partnership have more value than having the highest number of partners. TGO Consulting would be happy to assist you in determining what would be the optimum size for your firm, your market and your ambitions. Why not schedule a meeting to explore?

  • Business interests

    End of May I had the privilege of being invited as a speaker at the ACC conference in Madrid. ACC stands for Association of Corporate Counsel, the largest organization of in-house lawyers in the world. The conference committee wanted me to talk about ‘Unlearning traditional legal speak and thought – Retooling hard skills to lead and more effectively partner with the business’. While this might just seem like one of those typical vague and lofty topics that can be found on any conference’s agenda, there is actually a great deal of relevance behind it. Primarily there is the fundamental question whether a lawyer that is employed by a company, is first and foremost a lawyer before anything else? While some may say: “obviously, yes”, I would beg to differ. Any employee in a commercial organization is fundamentally hired to help the company reach its commercial goals. Employees that have no added value in that process will ultimately be made redundant. A commercial company is not a law firm. Lawyers in a company are expected to keep their eyes on the business. Prize draw Allow me to share an example from my days in a corporate legal function. At the time I worked at one of Europe’s largest apparel retailers. The company operated in a high volume segment of the market that is super competitive and highly sensitive to price. In one country one of our main competitors had held a mid-season sale event that involved a lottery and a price draw. Customers who made a purchase during the event could potentially win some attractive prizes, among which a brand new car. No need to explain that our company lost customers and market share to that competitor during the period of the event. As things are in a highly competitive retail market, my company immediately set off to organize a similar sort of event. The problem was that lotteries and prize draws legally were not allowed in that country. We asked our external law firm for advice. The answer we got after several weeks was many pages long, but in essence it said that indeed we could not do it. Legally such events were not allowed. After we had received and digested the outside counsel’s advice, I sat with my team and we discussed how we could help our company to remain competitive in the face of competition. What we came up with is this: it turned out that the law on which the prohibition of prize draws and lotteries was based, was almost a century old. There was already a proposal put to parliament to abolish the ban on such commercial events. In addition we found that there had not been any enforcement from the government on this for almost two decades and that in the unlikely event that we would be prosecuted, as a first offender, the maximum penalty would be the equivalent of €25.000. Realizing that our company would lose close to a million in revenue, our advice to the board was to accept the risk and go ahead. Probably no need to say that the board decided to go for it and that nothing bad happened. On the contrary, our event became a tremendous commercial success and became the new standard-to-beat in the market and was annually repeated for many years. Lawyers must keep their eye on the money I have also shared this real-world story with my audience at the ACC conference. It illustrates how company lawyers are part of a wider ecosystem, geared towards supporting and enabling the companies success. It illustrates that company lawyers are not first and foremost lawyers, but are primarily team members with expert legal knowledge. While this might seem a futile semantic difference, it is not. It is a totally different mindset and attitude. Lawyers in a company are not the guardians of risk and compliance as they often like themselves to be portrayed. Risk and compliance are everyone’s responsibility. If not, the company is doomed. Company lawyers are well advised to remember that their primary role is to help their employer to be commercially successful. Of course limiting risks is an important part of this as risks could turn out to be costly. But more important than the risks, is the opportunity. The reason I’m writing about this is because this also holds true for you, the external counsel. Back to my example story on the prize draw: while the external counsel was technically right, they still did not provide the right answer. Lawyers at law firms are well advised to also be very aware of how their client exactly makes money. Understanding the Business (interests) is one of the TGO Core Dimensions© that distinguish the tier-1 lawyers from the tiers below. For any lawyer, both in-house and outside, it is of crucial importance to understand how a company makes money. Only after you fully understand you are able to deliver value. Back in the days when I was with the retail company, the outside counsel (one of the 4 leading firms in the country) failed to understand, rendering their legally correct advice useless. TGO Consulting has a method that has been tried and tested to help partners develop and grow on the 7-Core Development Dimensions©. Understanding the Business is one of them.

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  • 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.

  • Legal market insights - Reports

    Reports TGO Consulting conducts research into aspects of the legal market worldwide and publishes reports that provide insights into both clients’ buying behaviour as well as the organisations of legal service providers. We collect and analyse market data, conduct in-depth interviews as well as quantitative surveys, whichever will be fit for the purpose at hand. ​ We are currently, amongst other, working on a report on legal markets in Africa, as well as a report jointly with a Fortune top-10 company that will examine current and future tools in buying legal services. Partner mobility in the German market This is the first report that presents an in-depth analysis of lateral partner moves in the German market over a longer period of time. It covers the hiring activity of the 25 top-ranked law firms in the German legal market since the start of 2011. For the first time, it is revealed that the German lateral hiring market has evolved to reach an unprecedented high and that partners are shifting across the board. An analysis of the data provides an insight into the practice areas that are most concerned and which type of firms are hit the hardest by equity partners seeking opportunities elsewhere. In a sector where the hunt for talent is fierce and law firms are scrambling to shape themselves for the opportunities to come, top lawyers are simply in too high demand to be loyal. The results of this report can be seen as a sign of the times we can expect ahead. With Brexit on the horizon firms will jostle to position themselves in order to benefit from a shifting market. In an ever more competitive playing field the fittest will survive. ​ A PDF version can be downloaded for free by clicking on the report. If you are interested in a complimentary hard copy please do not hesitate to request one here . ​ Commoditisation of legal services Few of us have failed to notice how clients are changing the manner in which they purchase external legal services and their efforts in putting pressure on pricing. At the same time, law firms are reporting more or less business as usual. How can this be? TGO Consulting undertook a quantitative survey amongst lawyers aimed at canvassing to which extend there is a real downward pressure on the price of legal services. Senior lawyers from over a 100 business law firms across Europe were invited to participate on-line, on an anonymous basis. Further, 15 general counsel, or persons in charge of managing outside legal services, were interviewed face-to-face on the subject of commoditisation of legal services. All interviewees represent internationally operating companies that are large buyers of legal services. The results presented in this report are thought-provoking and we hope that our conclusions stimulate a further debate. A PDF version can be downloaded for free by clicking on the picture of the report on the left side of this text. If you are interested in a complimentary hard copy please do not hesitate to request one here . ​

  • Request form report 2 | tgo-consulting

    Ordering the report If you are interested in a hard copy of the report, please fill in your details below and we will send it to you. Thanks! Message sent. Send

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