What administrators can learn
from those leading the way
By Paula Tsurutani
Last year was a "banner year for global expansion of U.S. and international law firms," reported Georgetown Law's Center for the Study of the Legal Profession, citing 96 cross-border mergers and the opening of 56 foreign offices by U.S. firms, including 28 in Asia, 15 in Europe, six in the Middle East and Africa, and seven in Latin America and the Caribbean.
Why is this expansion taking place? "The only driver is clients," said Gerry Riskin, Founder of Edge International. Ward Bower, a Principal at Altman Weil, Inc., agrees: "Firms are following clients, and reacting to the markets." What can we learn from some of these newly expanding firms? Here are some challenges they have faced and how they have managed their global expansion efforts.
SCENARIO PLANNING WITH CLIENTS AND EXPERTS
Allen & Overy, LLP is, indeed, a global firm, with 42 offices in 29 countries, and 5,000 on staff, including more than 500 partners. In an effort to stay alert to future client needs and market pressures, the firm engaged in large-scale scenario planning. Michael Michaelides, the firm's Associate Director of Business Development who is based in London, described the effort, which was driven by the firm's managing partner. Michaelides said his managing partner was "keen to have more data and information flowing into decision makers, and to get a better handle on the rapid changes in the global economy." This large-scale management exercise involved diverse panels of partners from representative geographic regions (Europe, the Americas, Asia and the Middle East).
Participants sought out clients, industry leaders, consultants and other experts to discuss what law firms and the business world would look like in the year 2020 including the possible opportunities, growth areas, threats and risks. More than 80 people all around the world were tapped for opinions, insights and perspectives. The product was a document that summarized the issues and the findings, and served as a jumping off point to spark further thinking and discussion.
SEARCHING FOR BROADER PERSPECTIVES
In addition to the benefits of gathering a wide range of opinions and informed views about the state of the profession, the effort provided an opportunity to spend quality time talking with partners about business, which blended many different viewpoints and broadened perspectives. "The topic and future timeline (of 2020) also had a 'liberating' effect," Michaelides said. "People felt free to brainstorm, imagine and think creatively about the firm, its place and its role as a service provider. Wide-ranging discussions also helped many lawyers get closer to clients."
The issues raised and conclusions reached also are helping our marketing thinking, said Michaelides. The report findings touched on a range of important topics including how to influence change, what's in the future regarding rates, commoditization, future growth areas, how technology will affect how work is done and how to do things more efficiently and, the firm has used the findings in its annual strategy meeting. The findings also have provided content for associate training, client events and further client discussions.
INTEGRATING SYSTEMS TIME TO ASSESS CAPABILITIES AND REALIZE COST SAVINGS
Enlarging a firm's footprint in a region or new continent offers more than an opportunity to enhance client service and integrate a global practice effort. Among other things, Matthew Sunderman, Managing Director in the Infrastructure & Business Process Practice at HBR Consulting, notes, "This is a chance to assess and standardize back-office operations. This can include examining technology platforms, developing new workflows, identifying new service providers or renegotiating existing contracts." Taking a hard and smart look at internal staffing capabilities is another important item on the integration checklist, which may require an outside, objective perspective to defuse sometimes political situations. But, in many instances, operating expenses can be reduced by as much as 20 to more than 30 percent another reason to pay close attention when embarking on an integration effort. "Putting together the right team to lead the integration effort is key," said Christopher Ryan, Managing Director of HBR Consulting's Strategic Sourcing and Business Operations. He notes that some firms are assembling teams that include not only operational executives, but also, "both associates and partners who have gone through a merger or practice in that line, and can provide practical insights about 'lessons learned' in integrating work files and sharing information."
MARKETING THE GLOBAL LAW FIRM
Rapid global expansion profoundly affects the positioning of a firm in terms of brand and messaging. Jeffrey Berardi can speak to that subject as Chief Marketing Officer at K&L Gates. When he joined the firm in 2004, Berardi worked with 850 lawyers and 10 offices, all in the United States. "Flash forward to today, and the firm now has more than 2,000 lawyers and 48 offices across five continents," Berardi said. "In my first year as CMO, we had about 20 people in the department. Now, we have close to 100. But, in addition to changes in the sheer number of team members, our management operations, organizational architecture and department protocols have shifted over the years in order to adapt to the firm as it exists now. We simply cannot manage a global team as we would have when all offices and team members were based in the U.S."
In addition to providing firm-wide marketing and practice-based support, K&L Gates has dedicated staff to focus on key locales for example, in Europe, the Middle East, Australia and Asia-Pacific region. Although navigating time zone differences can be taxing, Berardi has assembled a savvy team that can make "good decisions based on their knowledge of the firm, the local market challenges and opportunities, and our firm-wide department protocols."
Technology helps. The firm has created a "robust intranet tool that can be accessed by any marketing team member throughout the world." Among other benefits, the site allows Berardi and his staff to post and distribute content, tap into a sophisticated business development tracking tool, and have a central source to maintain brand consistency from one office to the next.
For additional articles and reports on globalization and state of the profession issues, refer to:
Edge International Review
Fall 2012 issue
The most recent quarterly publication by legal consulting firm Edge International includes 10 articles on a variety of globalization topics,
including alternative growth structures, non-merger models in India, collaboration and culture issues, and risk factors in growth strategies.
2013 Report on the State of the Legal Market
The Center for the Study of the Legal Profession at Georgetown Law with Thomson Reuters Peer Monitor produced this report, which discusses legal market
trends in 2012 and issues they believe will affect the legal industry in the coming years. Highlights include discussions on the growing pace of globalization,
market overcapacity and new law firm partnership models.
Altman Weil's 2012 Law Firms in Transition Survey
This is the fourth annual survey conducted by legal consulting firm Altman Weil. It provides findings based on responses from managing partners and chairs at
more than 200 U.S. law firms with 50 or more lawyers, including 40 percent of the 250 largest U.S. firms. The survey polled firms about current law firm management
issues, including billing practices, expansion, staffing levels, succession planning and client relationships, among other topics.
ONE MESSAGE, BUT MANY CULTURES
Consultants agree that maintaining a one-firm culture is essential, although Riskin notes that it's also hard to do and sometimes can seem like an uphill battle. Retreats and periodic face-to-face meetings are a huge expense, said Bower, but for a global firm, "that's the cost of doing business." These partner gatherings are often heavily orchestrated events, with pre-assigned seating at dinners, for example, designed to make key connections. "It's a carefully planned mission for many including a conscious effort to meet, introduce and network with others for cross-selling purposes," said Riskin.
Communicating among a global audience presents new problems too. Websites need to be multi-lingual. K&L Gates' website, for example, is available in 10 languages. Rather than use a translation service, Berardi typically relies on his local marketing or business development personnel to develop the site. "The multilingual content is usually not a direct translation word for word, but rather, it requires some discretion by the native speaker to create content that is going to be clear and relevant for the respective country/market."
Even something as basic as the name of the firm can be problematic. In the case of a newly merged firm, a consultant described how one firm's new name needed to change, because it was not easily pronounced in the local country.
As firms add more offices in far-flung countries, they also strive to have a one-firm mentality. Bower has been involved with global firms that have made a concerted effort to be less "headquarters-central." For example, they changed the composition of their committees to include a broader mix of attorneys from different offices and countries, and they took a hard look at the language in their collateral materials, taking into consideration client issues and cultural differences.
Berardi also said his firm is beginning to offer more dedicated firm resources related to cross-cultural training programs, "not specifically to support business development efforts, although certainly that is one component, but more to offer a better understanding of local customs, traditions and basic language tips, for example."
It is a big adjustment. Consultants predict no end to continued globalization, or the changes it will bring to current law firm models. These are challenging times for law firm management. But the fact remains: "Law is a business," said Bower. "If you can't be profitable, make changes to support the markets, you won't stay in business."
Who's Afraid of Transparency?
As an aside, it's notable that at least two of the biggest global law firms, similar to a public company, share and publish their financials on their website.
Allen & Overy, LLP's Annual Review 2012 said, "We have a business-focused but collegiate culture where financial information is shared with full transparency across the partnership."
Visit www.allenovery.com for their 2012 Annual Review,
2012 financials and financial history. Allen & Overy's site also includes a video of its senior leaders talking about the firm and their view of the future. And in February 2013, as
reported in The Wall Street Journal, K&L Gates issued and posted a press release of its 2012 and 2011 financials to its website.
About the Author
Paula Tsurutani (www.paulatsurutani.com) is a marketing communications writer, focusing on issues in professional service firms,
associations and arts organizations. Contact her at firstname.lastname@example.org.