Business retention and growth strategy differentiation in an industry with many competitors can be a real challenge. Yet, there are some basic, service-oriented strategies that clearly distinguish one firm from another. The key to creating an effective differentiation strategy is to begin by asking clients for their opinions about how they differentiate one firm from another. We decided to ask that question and learned that one of the best ways for a firm to differentiate itself is to develop a strong business understanding.
Since we believe it's always important to add the “voice of the client” to any business strategy, we asked some clients what “understand my business” means to them and how firms may better align themselves with client expectations. Here are some of their comments.
Senior IP litigation counsel of a financial services company:
“Understanding the realities of the products we sell and knowing that there is a distinction between the realities of the products we sell and the business climate and business needs that come along with the products we sell.”
“With outside firms, oftentimes it's the younger lawyers who never really worked a real job—they went to school, went to law school and very few worked in industry or business—or learned how to sell, making accommodations for bigger deals and vendors. These are typically the guys who want you to fight to the death. So on one level, generally speaking, they need to be able to understand what our industry is and what our products are.”
GC of a technology company:
“It means not only the specific industry, but also the needs of what I’m asking for as it relates to my specific circumstances. If I talk about this pressing issue, what do I need to have happen and why? If you don't understand our legal needs in the context of our business and our industry, you will never have as much value to me as someone who does understand.”
And last, the senior litigation counsel for a global corporation:
“Our company has peculiar procedures; I want them followed and respected if not at least tolerated. Some firms think we are putting them through hoops, and we can tell they are not very receptive to it… Our arrangement in the U.S. is different than our American competitors. There is a lot of that information on the Internet. It would be nice for firms to do a bit of homework on their own about our company, so they have a good basis for spotting issues that they otherwise might not. Know our business, spot issues, think about how they impact us and pick up the phone… If they don't understand our business, they won't be able to add much value.”
In response, our outside counsel view from a managing partner of a 750-lawyer firm has this philosophy at his firm:
“A strong business understanding is essential to maintaining and growing client relationships, especially for succession planning. It takes years, 10 or so, to prepare for the next generation to take over a client. This is true primarily because knowing the client's business, their appetite for risk, how an issue is going to impact their business, etc., is critical to building loyal relationships. Otherwise, we’re viewed as every other law firm. This is tough to achieve, but critical to the long-term stability of our key business relationships.”
Aligning inside and outside counsel's expectations of one another is more easily achieved when outside counsel know the business and anticipate legal needs and inside counsel communicate what about their business and industry is important for their outside counsel to understand.