As the team at Ackert is talking to law firms, there’s a lot of discussion about uncertainty as we head into the coming months and years. Firms are asking questions like, “With this softer economy, what should law firms be anticipating?” and “Will it be another banner year for us like the last two years have been or should we consider that 2023, might not be as strong?” and “Whether the prediction is that it will be another good year for firms or not, how does that impact our business development strategy?”
We recently presented the webinar “Calibrating BD Strategies to the Economy,” where we discussed what firms can learn from the last economic slowdown and the past two years and how can we apply those lessons to 2023, especially as marketing and business development leaders work through the budgeting process.
To discuss these important and timely topics, we invited a panel of three accomplished BD professionals, Barbara Malin, Chief Business Development and Marketing Officer at Jackson Walker, Michelle Murray, Business Development Director or Strategic Projects at Shearman & Sterling, and Jenna Schiappacasse, Director of Client Development & Strategic Growth at Jenner & Block, to share insights from their firms. The panelists addressed three questions.
What are key learnings from 2022 that can be applied to 2023?
Jenna shared, “So much has changed about the landscape of our industry – the way we work inside of our firms, the way our clients think – and it’s always been paramount for me to think and listen for the voice of the client in everything we do. And that’s also very important to my firm.”
She explained that the perspective clients bring to what really matters to them and nuanced details about how they want to interact with the firm have risen to the forefront in the recent return to office/hybrid environment. She cited the example of a client who recently shared that she gets aggravated when firms that have returned to the office invite her to lunch downtown, not recognizing that she’s not back at the office.
In this example, if a firm doesn’t do the due diligence to understand where the client is in her work situation and know that she lives outside of the city, the client feels as though they’re not listening and taking into consideration the things that are valuable to her, like not wanting to commute to a lunch meeting.
“We should always meet clients where they are,” Jenna continued. “And it’s a really good thing for the teams that we lead to provide that client perspective to others at the firm.”
Barbara shared, “One of the things that we’ve learned over the past couple of years is the importance of being able to look down the road and forecast where your demand is going to be coming from, what practice areas are going to be the areas where you need to build your teams up, where you might need to put additional capacity in place versus areas where you might be seeing a little bit of softening in demand.”
She added that she has learned the importance of being flexible. She recalled that in February 2020, she had confirmation that the largest budget she’d ever had was approved. Then, two weeks into the month, she got a message asking what the budget would look like at 10% less, then what it would look like at 25% less than 2019, and finally if she could go to 50% less.
She comments, “So one of the important things that we’ve learned over the past couple of years is the importance of building flexibility into your planning, so you can say, ‘Okay, this is bare minimum, nonnegotiable’ versus, ‘This is really just the cherry on top – it’s something we can put into our plan as a nice value-add.’”
In addition to agreeing with points made by Jenna and Barbara, Michelle added, “The initiatives you put in place, the plans, are the seeds you plant along the way that are going to build into what you get in 2023.”
She added that she and her team are positive about how things look for 2023 because they’ve been working hard to put together budgets and talking about what’s important to clients, such as upcoming regulatory issues, so they’re prepared to deploy their resources accordingly to respond to client needs.
How are firms feeling about business in 2023?
Michelle shared, “Our firm is definitely leaning into the practices that we’ve already built over the last few years with the laterals we’ve brought in, as well as with very specific initiatives, such as our FinTech Foundry and our ESG initiative.”
She added, “But you have to follow the news also. We’re following where the Biden administration is going, the regulatory environment and what it means to our clients, and the new Inflation Reduction Act that came out and what’s hidden inside of that. I’m a data nerd and love digging into data and finding opportunities for the firm.”
Next, Barbara commented, “I think it’s going to be a good year. We’re coming off our best year in history. We’ve added a lot of laterals over the past year, and so of course that will continue to drive growth, even aside from the normal demand growth we anticipate.”
However, she continued, “I’m not sure that there’s going to be the bull level of demand that we’ve seen in 2022. There are enough indicators in the economy that things are softening so we may be seeing some of our countercyclical practices trending up versus the cyclical practices softening a bit.”
Jenna reported that the tenor at Jenner & Block is good. She explained, “Similar to most other firms, we had a banner year last year and we are trending significantly in the right direction in terms of demand this year.”
She explained that Jenner her firm is doubling down on teamwork and the firm’s strategy, but that they also have robust areas of practice like litigation, investigation, and regulatory government controversies unlike many firms who bulked up on transactional business in recent years. “That’s where our strong suits are and where a lot of our most profitable work comes from, and I don’t see there being any change in that trajectory,” she said.
Where are firms allocating resources to maximize potential in 2023?
At Jenner & Block, Jenna said, “We have focused a lot on making sure that our team’s coaching skills are paramount and that we are offering value additive services to the lawyers to make sure that they are going after the right work and the most profitable work, and that they are really being partners to the partners in a way that is adding strategic value.”
She explained that in terms of budget allocation and focus, her team is making sure that they’re spending their human resources and time on the right types of work. “We’re learning to not be yes people when it doesn’t make sense. We’re using data to make sure we’re making educated decisions about what we spend our time doing and pushing back when necessary, so we are all moving in the right direction in terms of the business imperatives of the firm.”
Barbara commented, “In 2023 we’re really prioritizing understanding where our clients are. They’ve been impacted in a lot of the same ways that we have by the corporate talent war and the need to find capacity to achieve their business objectives and manage the risks that they’re charged with managing.”
She continued, “We’re leaning into understanding our clients through client feedback programs, through building relationships and making sure that we’re putting our resources where our revenue comes from and that’s clients.”
Michelle commented, “I would say what Barbara said regarding putting your resources where your clients are but add that we’re also leaning into our alumni network.”
She continued, “And everyone knows you get 80% of your work from your existing clients, so understanding them, mapping those relationships and finding opportunities in them is really important for us.”
What role will competitive intelligence play when planning BD strategies for 2023?
Michelle offered that she runs a pivot table from her firm’s financials to understand what partners are billing with what clients. The data helps her to see where hiring a lateral grew business year-over-year or what effect someone leaving the firm had on business. Then, she uses that information as a starting point to inform her BD strategy. She commented, “Really, if you don’t have that information, you’re just throwing spaghetti at the wall.”
Michelle also uses Monitor Suite to glean information to inform go/no go decisions. She explained, “I can research a company and learn what they do and the types of clients they work with. With that information, I can say to partners, for example, ‘They’re never going to pay our global rates, so let’s not waste your time. Let’s focus your time on profitable business.’” She added that lawyers at her firm appreciate those types of conversations.
Jenna agreed with Michelle’s comments and added, “The ability to not just pull a Monitor Suite report, but to create an opportunity-spotting pipeline of information to make educated decisions is what sets our firms apart in the marketplace. The days of using ‘gut feel’ to make decisions should be gone if they’re not gone already.”
She continued that it’s crucial to operationalize the go/no go effort and look at what resources the firm may be giving up in order to pursue an opportunity. She said she feels the best part of a business development leader’s jobs is, “Figuring out what the right answer is to grow the business and to grow the strategic piece of the pie. And without investment in significant advancements in competitive intelligence teams and tools, none of us will continue to progress.”
Is the BD strategy of adding laterals to grow business likely to continue in 2023?
Michelle began by saying she likens this strategy to the lateral baseball market. “People used to be loyal. They would stay at a firm for 30 years, get their gold watch and retire. Then the market shifted in the recession of ‘08 and there were layoffs across the board and people realized maybe that their firms weren’t being loyal to them. That changed the dynamic.”
She added that she doesn’t believe the lateral market is going to change. “The lateral strategy of bringing in a team is your statement to the world that you are in a certain market. We put it out there with our communications and PR. We’re saying, ‘We’re putting our money where our mouth is and we’re going to fill in.’” She added that firms are often asked if their bench is deep enough and it’s important to be able to show that it is.
Barbara concurred, saying, “One of the key imperatives for most firms right now is growth and being able to demonstrate to clients that you can serve and provide a complete solution to their needs. One of the things we hear quite frequently from clients is that it frustrates them to have to manage multiple teams of law firms across their portfolio.”
She added that the ability to provide the depth of service that clients are demanding is the key to continuing to grow as a firm, which is why the firm’s lateral strategy has become a key part of its business development strategy.
Barbara noted that there are caveats to navigate. “You need to be careful about who you’re bringing in. You don’t want to go out and hire willy nilly. You don’t want to get too far out over your skis and offer crazy guarantees.” She added that the last recession taught firms that they need to be mindful of this with their lateral strategy.
She continued, “But the other thing we learned in the last recession is that if you don’t continually fill up the pipeline with talent, then you’re going to get five or ten years down the road and have big gaps in your capacity to serve clients.”
Barbara said it all comes down to having the capacity to serve clients, and it’s business development leaders’ responsibility to figure out how to identify clients’ needs and then deliver teams that can best serve them.
Jenna agreed with Michelle and Barbara and added that her firm also has a large focus on diverse talent acquisition. “We are focused on making sure that diverse talent acquisitions are thoughtfully integrated and given a seat at the table because it’s well- earned and because our clients are insisting upon it.”
She added that having a cohesive strategy behind bringing diverse laterals into her firm is critical for success. “We need to make sure we’re putting forth the message we want them to receive. We have to make sure they know they will have meaningful speaking roles in pitches. We want them to know they’ll not just be on the pitch team, but actually doing the work. We must make sure we have a very high percentage of diverse leadership – make sure we’re walking the walk and not just talking the talk.”
How do firms ensure that lateral hires proactively engage?
Barbara began by saying, “I think that this is one of the areas where you can, again, lean into your business intelligence, competitive intelligence and client intelligence to help figure out where the synergies are between a new lateral’s book and the firm’s existing business.”
She continued “A really important part of getting new lawyers integrated into the firm is making sure they have opportunities to join client teams and contribute their understanding of the relationships they bring with them to the client teams that we already have. One of our key aspects of lateral integration is looking at our existing client teams and determining whether any of our new laterals should be added. Typically, the answer is yes, because if they weren’t somehow synergistic to the practice, they probably would not be joining the firm.”
Barbara added that there are logistical steps to follow to integrate a new lateral. “We make sure that our business development managers set up a regular cadence of meetings with new laterals to help them understand our firm and how we do things.
We help them get around the firm and meet people we think will be important to the growth of their practice and just generally make them comfortable they’ve made the right move and that their clients have made the right move in coming with them.”
Jenna shared that when she joined Jenner & Block in late 2020 there was a typical lateral integration template and she overhauled it. “We had a previously existing template for a lateral integration that started, out as many do, by asking, ‘What is your elevator pitch and what are your top three selling points, so we can integrate you into the firm?’”
She continued, “We decided to flip that on its head and say, ‘What are we going to be to you?’ Maybe they’re struggling to get their laptop to work or don’t know how to get their mobile to sync with their email. We want to take the guesswork of these overwhelming logistical issues of joining a new organization off their plates.
“We start with, as we do with our client teams, a relationship map. We map who we think they should meet internally and at what intervals. We decide who to prioritize meeting with based on their portable book and existing relationships in the marketplace. We get them settled by knowing their colleagues and getting a sense of who does what and how they can integrate internally.”
Jenna added that mapping existing key client relationships allows her team to see where they can bring new laterals into existing BD support structures so they can rapidly elevate their profile in the marketplace. For example, the team may create a webinar they can offer that’s relevant to the practice the new lateral is bringing or building that the BD team may want to prioritize.
She concluded, “Our team gives new laterals a very clear roadmap of how to approach integration so they can just focus on feeling settled. And, in that process, we bring in different departments across the firm, so the integration is cohesive rather than siloed.”
Michelle explained that lateral integration is similar at Shearman & Sterling. “We also have an onboarding process that includes some technology and a variety of different practices. The business development team’s role in it involves the normal marketing, communications and planning. A practice manager is on the ground with the new lateral partner helping them integrate into the practice and there’s also an overlay of industry practice, where partners meet with client coverage teams as an opportunity to get to know partners outside of their own practice or footprint.”
How is the Talent War affecting firms’ BD teams?
Barbara commented, “I think that one of the keys to the retention of talent is making people feel like they’re in a place where they’re making a contribution and making sure they have the opportunity to really provide value in the function they’re in, but also having a vision towards what their future might be.”
She added, “We have the opportunity to show leadership and help team members understand this is where you are today and this is what you do today, but this is where I see you growing and how I see you getting there. As a leader, I envision that for our department as a whole and it’s how I want to elevate our impact within the firm.”
She continued, “I want to ensure that we retain a seat at the table. I want to ensure that we get a greater say in what’s happening inside the firm. And I want every team member to know that their voice is important.” She noted that this includes giving team members credit for their ideas and recognition for their contributions.
She said, “In my eyes, it’s really important that we give people the opportunity to shine and give them the opportunity to see where they can go so that the path at a different firm doesn’t look more attractive than the path that’s available to them at our own firm.”
Commenting on the challenges of getting lawyers to respect and respond to marketing and BD team members, Michelle shared that her experience at Shearman & Sterling differs from what she experienced at previous firms. “At Shearman and Sterling, you’re a partner with the lawyers, and they and they respect the business development team here. The level os respect I get from partners is impressive”
However, she added, she realizes that teams don’t typically get respect across the board. “I think it’s important as a leader to give your staff the ability and the tools to learn how to manage the chessboard. I always used to say to the people that worked for me, ‘Here’s the chessboard in front of you. Want to get to the other side? How are you going to do that? Sometimes you have to be able to bob and weave. You’re going be able to be friendly with some and build a trusted relationship through your knowledge of the market and the client base and just doing a really good job. But there’s also going to be some people you’re going to have to meet head-to-head.’”
She continued, “I’m fortunate that we don’t have that here, but I think it’s really important as Barbara said, to provide opportunities for your team to shine. It doesn’t matter what you’re doing; it matters what they’re doing. And they need to feel like they’re invested.”
Michelle noted that when everyone was working from home, it was much easier to leave a job because people weren’t having lunch or having in-person meetings, but that is changing because her team is back in the office three days a week with the option to come in four or five.
She said that flexibility is important to team members, but they also like coming together. The firm’s CMO recently put together a weekly team huddle where everyone can share what they want no matter what their role.
Jenna agreed with Barbara and Michelle’s comments and added, “Your people are all that matter. At the end of the day, it is not about any of us; it’s about what the team does and how they feel connected to the mission.”
Jenna, whose team has doubled in size since she joined her firm noted that leadership is more challenging, but perhaps also more rewarding, in the current hybrid working situation. “I joined when we were fully remote. I didn’t meet a single one of my original team members for over a year, and it was daunting trying to figure out what each one of them needed at any given moment. But if you are dedicated to building a team and growing a high functioning team, you have to go the extra mile to make sure that people feel heard and feel connected and understand why what they’re doing matters.”
She added, “It takes effort and time and creative thinking – and maybe more than we think we can give at times – but it’s absolutely worth consistently checking in with people to revisit and take a temperature on where they are at the moment. It’s worth giving people opportunities to stretch and grow and shine. I don’t think there’s been a single personal success that has made me happier than watching my team succeed at the things that they do.”
What is some advice BD leaders would offer lawyers for 2023?
“I would say that the key mantra that I would want to pound into lawyers’ heads is that they need to pay attention to their client’s world,” Barbara offered. “They need to understand the individual situation of the client, where they fit into the organization, what the politics look like in their organization, where they fit into the structures, and what sort of goals they have in terms of their own personal advancement.”
She continued, “They need to know a client’s particular communication preferences, even things as simple as they don’t want to go to lunch downtown. And, they also need to understand not just a client’s individual situation, but also their business.”
Barbara noted that clients don’t want lawyers to make business decisions for them, “But they do want you to be sufficiently advised of how their business works so that the legal advice you’re giving them fits well with how they make money, what their competitive environment looks like, and works with their company strategy. Lawyers need to understand what the landscape looks like around the client’s business, who their key competitors are, and how they compete in their particular industry.”
She concluded, “That kind of understanding of the client’s world is what lawyers need to bring to the business development table every day. They have to either expand the business that they’ve got with the client or to branch out and develop some completely new client relationships.”
Michelle commented, “I would say lawyers also need to understand their clients’ pain points, because there are clients leaving firms because they can’t see what’s what’s coming next. For example, we’ve all seen firms putting just partners forward, but one of the best feedback messages I received from a client was “You came to the pitch without any associates, and we know they do a lot of the work. We want to see them in the meeting.’ Now, you need to pivot and make that change because it’s not just one client who thinks that.”’
View the complete webinar on-demand here.