While attorneys tout their deep technical or functional expertise, most clients view that know-how as table stakes. Clients will assume you’re an expert in employment law, international tax, complex litigation, or some other legal specialty.
However, as clients face increasingly complex business challenges that go well beyond any one traditional practice group or area of the law, they might wonder if you really understand the key aspects of their industry. To be fair — clients don’t care if their outside counsel don’t know the intricacies of making the client’s widgets — but they do want their lawyers to know the idiosyncratic aspects of what they are having to deal with as they make those widgets, such as:
- any exclusions they can use to avoid a regulation unique to their company, product or service;
- how much a pharmaceutical company spends on due diligence before beginning serious development, so they know you know what their legal teams are getting into;
- sound strategies to accelerate the time it takes to get permits and approvals; or
- the legal spend per barrel of oil, for an energy company.
As a lawyer, you can be a great technical expert — but the secret sauce is proving that you can put that expertise to work in specific and granular manner for clients. And if you want to show clients you are up to that task, there are few good strategies you can employ to really gain insight into one of your valued clients. Such as:
- read at least six pages deep into their website — homepages don’t count;
- check all client career-search pages, LinkedIn, and places like Ladders to see what kind of people your client is looking for — especially in product development, engineering, and within their own legal departments; and
- assign an associate to assemble all the alerts about this client and their competitors, and ask that it be delivered in an organized fashion on a monthly basis.
But wait, there’s more……
What clients also want to know is — have you worked on legal matters within their industry? Do you understand the nuances of their industry? Can you hit the ground running, or will they have to invest hours to teach you and your team how things are normally done in their world?
In assessing the strength of your industry practice, your firm needs to ask:
- Are clients in our market footprint aware of our specific industry practice?
- Do they consider us a viable option to service their legal needs?
- Do they proactively inquire about our industry capabilities and ability to address specific opportunities?
- Does the firm have luminaries who are widely recognized as experts on key industry issues?
- Does the firm have bench strength that enables it to effectively serve multiple clients or bring full-scale teams to bear on complex high-stakes engagements?
- Will clients hire our firm in preference to our competitors?
- Do clients continue to hire us because of what we know about their industry?
- Would they recommend us to others in their industry?
- Do the top companies and top executives in the industry trust our firm with addressing their most complex problems or do they just send us their commodity work?
- Is our firm able to attract, develop, and retain the best industry talent, or do talented industry experts seek out opportunities elsewhere?
- Is our firm one that young professionals with an emerging focus on an industry aspire to work with?
Clearly, if you and your firm have any aspiration of being a trusted advisor and offer valuable advice to your client, you must first understand the client’s business problem. When the CEO calls the GC, the CEO never asks about the legal risk; instead, the CEO will ask about business risk. The more you and your firm can understand and advise on the business risk, the more clients will be willing to pay to use your services.
Of course, understanding the client’s business problem requires understanding the client’s business. It is at this point that industry becomes relevant as it becomes a proxy for understanding the many aspects of the client’s business, such as industry terminology, the kinds of products and services offered, industry-specific revenue sources and revenue recognition issues, common contractual terms, industry-specific laws and regulations, typical business practices, types of talent employed and technologies used, and supply chain structure and practices.
Be on the lookout for signals that your firm might not be up to speed on the deeper industry matters:
- Do clients express frustration at “…having to teach your people our business”? This can sometimes be a reaction to someone not understanding the basic industry lingo or technical terminology commonly used by members of the industry.
- Do you find yourself sheepishly asking questions about basic terminology in client meetings, or bluffing your way through the meeting and frantically researching the topic later? We remember seeing one client ask one outside counsel, “So you are representing yourself as a healthcare attorney, please tell me what you know about BHRT?” only to receive a bewildered reaction from the lawyer.
- Do clients and prospects explicitly ask to see industry credentials or meet with professionals in your firm that have industry expertise? This may come about as clients do not see your industry group members actively involved in any of the industry or trade associations; or alternatively, the client is highly skeptical because they observed on your website that the same lawyers are supposedly active in multiple unrelated industries.
- Do you avoid following up on a particular discussion point (and therefore miss opportunities) because you’re really not sure what the client is talking about or its significance? We remember once a partner representing his Manufacturing Industry group who was completely unfamiliar with new developments in the sub-industry known as Augmented Manufacturing or 3D printing, and just seemed to shrug his shoulders when the subject was raised.
The logic of all this rests on the idea that businesses in the same industry face similar legal challenges and that clients can benefit from a firm’s accumulated expertise, built up over years of deal-making and litigation in a particular industry. Industry groups add to this with the promise that a firm knows the jargon, power players, and problems that its clients deal with daily.
Industry knowledge may be less of an issue with a simple legal question, like one involving a pension matter, but it becomes incredibly important when advising on something more complex, like specific international trade regulations. Typically, the more complex the issue, the greater the need for industry expertise. The key question for any professional claiming a certain amount of industry knowledge becomes:
What do I need to know about this industry in order to understand what my client is talking about, explore the various implications and options to achieving the results my client is looking to realize, assess the possible risks, and deliver service and advice that is relevant and appropriate to this client’s business?
It is worth recognizing that this is where having a real industry team can make a significant impact. For example, those in the group with different levels of seniority may require different levels of industry knowledge based on the nature of their work and their interaction with the client.
Also, the client’s work may be effectively executed by drawing expertise from across practice disciplines and successful leveraging only one or two key industry lead attorneys who can help explain the industry characteristics to others that are bringing some specific deep expertise around, for example, a tax, technology, or intellectual property issue.