Recently, we read about the Dentons three-way merger. (As always, Steven Harper's Belly of the Beast blog offers great insight.) Then, Norton Fulbright tried to steal the thunder.
When I see these mega-firm combinations, the phrase "trying to scale the unscalable" comes to mind. As currently practiced, law suffers from three structural limitations due to a lack of business maturity:
1. Production: Lawyers still apply the "guild craftsman" approach, i.e., each lawyer crafts a unique solution for each client, each time. You can't scale on that basis.
2. Management: Because lawyers only respect legal fee-earners, too many firms' management continue to practice law to some extent. This makes no sense at all. How can managing a billion-dollar enterprise be a part-time job?
3. Sales: In every other business category, companies recognize that Sales is a mission-critical function, and they invest heavily in hiring, training, equipping, motivating and managing a professional sales force. Yet law firms continue to go to market with reluctant, part-time, untrained, volunteer "saleslawyers."
(Visualize a conversation between a Corporate lawyer and her client. She advises that client to abandon scalable mass production in favor of guild-style craftsmanship, embrace part-time management, and tolerate an amateur sales force. The transition from "client" to "former client" would be measured in seconds.)
I'd say the only thing they gain is geographic reach and backup headcount. The asset they acquire is a modest foothold into a number of clients they didn't previously have, or an incrementally broader foothold into current clients.
The way to really capitalize on these mergers would be to get serious about major account development, and embrace an organized approach to strengthening these clients in three dimensions:
- Retention: Most legal services are mature, meaning there are many qualified suppliers. An astute team, focused on demonstrating that they understand the client's business and can contribute to it, can quickly differentiate the firm and create a reason for the client to care who does work that anyone can do.
- Growth: Breadth, i.e., number of services, and depth, often referred to as "share of wallet"
- Preparing for a mutual future: By being better informed about the client's business and industry, firms can more accurately predict changes for which they'll be better prepared to adjust, and avoid being blindsided and left behind.
Unfortunately, in too many mergers, business development is an afterthought, a bolt-on, rather than the mission-critical element of M&A decision-making that it should be.
To learn about an innovative major account team process that clients love, and that develops team members dramatically, drop us a line or call us and ask about "TeamPath."