Major League Baseball's trade deadline, when teams trade away the present in hopes of a brighter tomorrow or spend big to acquire top talent, brings to mind the parallels between sports management and law firm management.
At the trading deadline, baseball teams typically focus on three key factors to bolster their run toward the playoffs, and ultimately, the World Series. Similarly, these three factors can push law firms to the front of the competitive legal pack.
When preparing for the increased intensity of a playoff run, law firms, just like baseball teams, should be looking to add a major difference-maker, experience, and/or depth.
THE DIFFERENCE MAKER
In 2008, the Milwaukee Brewers, an organization that had not been to the playoffs since 1982 and was playing in MLB's smallest media market, found themselves with a young, talented, but inexperienced team heading down the wire in a heated, competitive playoff chase. About four weeks prior to the trading deadline, Brewers General Manager Doug Melvin made the call to trade away some of the organization's top prospects in order to acquire C.C. Sabathia, the Cleveland Indians' all-star pitcher. Sabathia was due to become a free agent at the end of the year and seen as the possible difference-maker Milwaukee needed. Sabathia later pitched the Brewers to their first playoff appearance in over 25 years.
Sabathia is the perfect example of what a difference-maker can mean to an already talented roster of contributors. Over the last five to six years, law firms have also picked up on this factor, as targeting and hiring lateral partners has increased dramatically. For law firms, difference-makers typically have two dominant characteristics, among many excellent traits: high-level, influential trusted advisor relationships and market-leading brand equity. In other words, they are the crème de la crème of rainmakers.
In 2011, the Brewers were making another run toward the playoffs. Their young and inexperienced 2008 team had grown up together and their talents had matured. Bolstered by the offseason addition of two solid starting pitchers and an MVP season from one of its young stars, the Brewers were driving toward their second playoff appearance in three seasons when the trading deadline approached once again. Unlike 2008, when the team needed a difference-maker to push them to the next level, the team now had all the talent. What they lacked, according to Melvin, was experience. So, to balance talent with the relevant experience necessary to compete at the next level, the team made two trades to acquire veterans with World Series experience. Both players were instrumental in leading Milwaukee through the playoffs and into the National League Championship Series.
The same philosophy holds true for law firms. Experience matters. In fact, experience and relationships are the only two things that a law firm calls its own. How firms collect, manage, and ultimately leverage both is typically the difference between average and above-average numbers at the end of the year.
Today's market shows that most buyers are influenced first by their emotions and second by their own logical justification when it comes to making purchases. This is why relationships (emotion) and experience (logic) are so critical in creating the uniqueness necessary for law firms to separate themselves from a commoditized pack of competitors, and to ascend to the much less crowded, but still competitive, field of high-performing teams.
In 2010, the Green Bay Packers won their record 13th NFL Championship and fourth Super Bowl in team history, despite the highest loss of games to opening day starters in league history (91 games), and having 16 players suffer season-ending injuries, including backups of backups. Green Bay made the playoffs and eventually won the Super Bowl, specifically because of their depththeir depth became their difference-maker.
For law firms, this is also a very important part of preparing a team to take the next step. Resource management is an important aspect of team preparation and a key component for creating differentiation from competitors. Additionally, as fee arrangements move beyond the billable hour, the breadth and depth of teams becomes essential to crafting creative pricing.
The depth of team is also a contributing factor in the retention and growth of clients. With all of the lateral hiring firms are doing, the chances are high that key partners and team members may leave for other firms. Having depth of resources and relationships is vital to client retention. Growing beyond serving clients with a single practice requires depth and breadth across multiple practice groups to expand client business within the firm.
WHEN IT ALL COMES TOGETHER
When legal departments talk about the various characteristics that define their go-to firms, they invariably come back to the three factors mentioned above, because it takes all threedifference makers, experience, and depthto make clients' big problems go away. Any one of the three on its own is a powerful factor, but cannot effectively stand alone.
FINDING THE TALENT
The digital age has facilitated the uncovering of targeted talent. In large law firms, law librarians have at their disposal a number of commercial products they can search, not only to find players who can add value to their firms' expertise, but also to verify promises made by recruited talent. Surfing social media sites such as Facebook and LinkedIn can uncover valuable intelligence on future prospects or validate a candidate's assertions. For example, does the candidate really have the mobile book of business he or she claims to have?
Certainly, the emergence of online databases, such as competitive intelligence platforms, has made it easier for information professionals to identify and vet potential candidates than in years past. Recently, a law firm client was looking to grow its Houston office. The firm took a list comprising nearly 40 percent of its top 100 clients to the firm's librarians and, utilizing various intelligence tools, the librarians were able to generate, within a day, lists of attorneys at various firms in Houston who were also representing each client in the local and surrounding jurisdictions. Additionally, the librarians were able to separate the associates from the partners and, utilizing year-over-year trending analysis, were able to determine quickly which attorneys were consistent, go-to counsel for individual clients.
VETTING & ALIGNING THE TALENT
Identifying potential laterals is just one step, however. Recent surveys in the legal industry indicate that barely half of all lateral hires fulfill the expectations with which they arrive. Typically, there are three reasons why lateral hires do not fulfill even modest expectations: inability to bring existing clients to the new firm, lack of cohesion and chemistry with the new firm, and a practice or niche that doesn't align with the new firm in a way that can be leveraged effectively. This is where the role of the librarian becomes critical when law firms look to grow through lateral hiring.
Utilizing one of many available competitive intelligence (CI) platforms, librarians quickly can ascertain the likelihood of client portability. In the example involving a firm's expansion in Houston, the librarian identified potential lateral candidates, and then began assessing the total client representation of each lateral's current firm as well. For example, if a lateral candidate claims the ability to bring a client to the firm, one must look at the lateral's current business and relationships. Have his or her clients been represented by the candidate's current firm for the last eight years in seven of the firm's 10 offices? Has the firm handled at least three areas of law that can be identified with another 15 attorneys from the candidate's current firm listed as counsel on various docket filings, M&A transactions, and patent applications? If so, there is a strong probability that the client will not be moving all, if any, of its business with the attorney.
The use of internal relationship intelligence will factor into this exercise. Utilizing a firm's Client Relationship Management (CRM), or even more powerfully, a firm's Enterprise Relationship Management (ERM) system, which automatically surfaces relationships and strength-of-relationship indicators, firms can broaden their due diligence on candidates by vetting candidates through their own team. Surfacing potential personality or interpersonal relationship issues can benefit the firm immensely, from both a financial and morale perspective.
An additional consideration is the market trend for the legal work of the talent's primary clients and client industries. Is the client, industry, or both a shrinking or growing market? Utilizing various tools, including the many CI platforms available, librarians can benchmark companies against their industry, or a group of primary competitors. This practice enables intelligence professionals to contextualize past performance, identifying outlying macro and micro trends, and better detect emerging tendencies among the talent's clients and market.
Finally, how do both the primary and secondary capabilities of the new talent match the existing capabilities of the firm? Does the skill set and niche of the new talent extend the firm's current market positioning, or does it allow for the expansion into new practices, industries, or markets?
Prepping for the playoffs is a sizable undertaking that requires resources, a top-down strategy, and tactical execution at all levels. However, unlike professional sports, in law firms it is not only an end-of-season or end-of-fiscal-year strategy. To be successful, a firm's playoff preparation strategy must have a consistent, year-round focus.
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