The news that international law firm Weil, Gotshal & Manges had laid off “60 associates and 110 staff members, as well as compensation reductions for roughly 10 percent of the firm’s partners” is becoming more common among large international law firms. As is often the case when news of these layoffs occur, the hiring of lateral lawyers with books of business is mentioned as the method by which law firms can add top-line revenue.
The lateral hiring process is, however, very expensive and has no guarantees of success. Law firms should instead be emulating the revenue generation practices put in place by accounting firms when that industry went through similar structural upheaval. For firms contemplating sale divisions, they have been utilized with success by a precious few large law firms already. And those successful efforts can be emulated.
Among the AmLaw 100:
- Steve Bell, CMO of Womble Carlyle has adopted an outbound sales posture.
- DLA Piper utilizes a sales force focused on cross-selling to existing clients.
- Patton Boggs at one time maintained a dedicated outbound international business development division, of which I was a part.
These efforts cost a fraction of uncertain and unstable lateral partner hires. They institutionalize new client development to the benefit of the entire firm. They permit law firms to secure needle-in-the-haystack opportunities that were it not for the day-to-day activities that these divisions provide, would never have.
Importantly, the day-to-day activities of these divisions permits firms to grow in down economic times by focusing creatively and proactively on where new revenue will come from – and then securing it. At present, there are instant growth opportunities BigLaw is leaving on the table as a result of not maintaining sales divisions.
The skill sets necessary to establish and operate such sales divisions are:
- How to comprehensively understand the domestic and global commercial context in which law firms operate.
- How to identify saleable services from within often complex legal practice areas.
- How to carefully match and integrate closely – law firm services – with the commercial needs of prospective clients.
- How to identify where law firms will secure new revenue from advancing the commercial objectives of clients.
- How to perform sophisticated market research sufficient to generate a substantial pipeline of new clients in both domestic and international markets.
- How to most effectively initiate, manage and drive forward the entire business development process from the identification of ideal potential new clients to securing new client engagements.
- How to create legal transactions around those ideal commercial opportunities you’ve already identified while working in concert with subject matter practitioners and prospective clients.
- How to write semi-scholarly content on topics of highly specific relevance to ideal potential clients, for strategic dissemination on and off digital platforms.
- The ability to successfully identify and persuasively communicate vital messages to audiences ranging from CEO’s of global corporations to the heads of foreign sovereign governments.
The accounting profession previously went through the changes the legal profession is going through now. It responded by institutionalizing sales divisions. Law firms now need to be doing the same.