Lawyers need to get their stories straight…
By: Dragon Rouge
Tags: Storytelling, Law, Branding

Lawyers need to get their stories straight…

…Or risk missing out on growth

The legal industry has got a flame under it. While the news value of investment banking is in a down cycle, the fizz in the law firm world is becoming audible.

Domestic U.S. firms are merging to strengthen regional and international positions and international firms are merging to strengthen global positions. In the UK, there have been 108 law firm mergers since 2011 — with the world’s now-largest law firm by number of lawyers, Dentons, leading the way. It seems that the pain of the financial crisis has shocked everyone into doing all they can to promote stability — meaning smarter and better controls, more pre-warning and tighter regulation. And many believe that increased stability is a direct result of increased size.

It wasn’t always like this. Just after the crisis, when we worked with firms like Osborne Clarke, Allen & Overy and the legal world’s equivalent of the Star Alliance, Lex Mundi, firms were loosely grouped in three clusters — predominately U.S. domestic firms with not that much interest in global business; major U.S., Asian and European firms with a lot of global interest; and ones in between, kind of bridging firms. So what’s changed? Is there still room for firms of all shapes and sizes? If so, what role does brand have to play?

I’m certain that we will still have groupings who decide to zag while others zig.

The current legal commentary is focused on the question of confidence in your brand. It’s hard to imagine for example, Quinn Emanuel taking a risk in merging with a player that could in any way divert its meaning and direction or detract from its existing reputation.

Equally, while all around are tying knots, there are many firms who would rather concentrate on what has produced their long-lasting client relationships and strong profitability. For instance, we all know that when clients are asked about cross-border transactions and who they’d rather handle them, they always say pre-existing relationships, lawyers they know. The brands they already trust. So for some, it was no surprise to read recently that the firm leading VW’s defence in the U.S. has only 66 lawyers. So this begs the question about the size thing… is it a sure-fire winner to go out there and rapidly build market share through mergers?

Felix Oberholzer-Gee from the Strategy Unit at Harvard Business School thinks possibly not. Rapid growth can be accompanied by a slide into a commoditised position as pricing is used to ensure market share gain feeds the larger machine. This puts all kinds of pressures onto the firm, perhaps the worst being that it could kill the motivation of associates to drive as hard for equity partnership as there’s not enough profit around for them to make it worthwhile. Theorists point to the current era in law as one step away from a different business model, closer to that of the accountants.

But all of that is fine and easy to understand. When it comes to brand (or reputation), the difficult bit is finding the right way to talk about your strategy, even, to be able define your strategy in such fluid circumstances.

From our experience with firms of all sizes, it’s not a question so much for people running the practice where this matter is gaining importance, but a question for the larger groups of partners who are getting swept along in the current. The irritating thing for many of these partners and their colleagues is the distraction of seeing the merger after the event, as somehow being the cause of some kind of limitation to growth because of cultural difficulties.

Indeed, sometimes these mergers fail the even more basic test — ‘what do my clients think?’ That’s when it can get tough.

It’s at that point that people in these firms are bound to ask, what are we doing, where are we trying to get to, what’s the organising idea that we use for our work, and how do we, all of the lawyers and the professionals in this new vision, get behind this and make it work?

So I’d suggest that whether you’re big or small, merged or independent, there’s never been more pressure to get your story straight — for your clients, your future trainees and your partners.

It’s not just the story you decide to tell but how one starts to think about the story that matters. And never forget, your brand — the external perception of your business — IS your story.

Lawyers are brilliant at reaching the positive by identifying and eliminating the negatives. But reputations and the cultures that create them are sometimes softer and more nebulous, they are harder to probe and also quite probably harder to empathise with when all around you is a race to get bigger.

Straight stories go down well. They should also be the easiest to tell.