"Best
friend" strategies really do work for law firms, but they require thorough
research, a solid business case, and realistic expectations.
Going
global has become a two-way journey.
Since
the late 1990s, firms in mature legal markets in Europe and North America have
looked for new "best friends" far from home. Their clients increasingly compete
in global markets and expect broader capabilities in their professional
services providers. To keep their best clients, law firms must be able to
project their client service capabilities over the horizon into new and faraway
markets.
About
eight years ago, a number of small, high-quality law firms in emerging regions
such as Central and South America began knocking on doors, in places like
London, New York, Miami, and Madrid to introduce themselves to law firms whom
they hope will refer work from multinational clients. These have not been the
traditional "road shows" that law firms have attempts for many years.
Instead, when done properly, they are well-planned, systematic, strategic
expeditions. In recent years they have been joined by firms in Asia, Africa,
and the Middle East.
As
national companies in emerging and recently-emerged countries begin to "go
global," we now observe smaller firms in those markets also seeking larger,
established international law firms to whom they can entrust their clients'
foreign business interests. It is no longer a matter of just asking for work
from a big foreign firm. These firms also have opportunities to offer to their
potential partners.
"Best
practices" for "best friends"
Although
they can be very successful long-term, not all "best friends" strategies
produce dramatic benefits overnight. We recommend to our clients that they keep
five things in mind:
- Strategic relationships
should be based on your clients' future needs and where they are likely to
arise.
- The decision about whom to
approach is a strategic issue, requiring a fully-informed business case
with respect to each law firm that is visited.
- Bigger is not always better.
- Be content with
non-exclusivity.
- Be optimistic but realistic.
No
instant gratification
Having
a an informal network of "best friend" relationships does not produce the
instant gratification (or the potential long-term risks) of a merger, or the
automatic global "presence" of membership in a network. Nonetheless a
significant number of small and midsize law firms are discovering that a series
of close, working relationships with other law firms can be an important part
of their business strategy. "Best friends" can provide additional
expertise, work capacity, and knowledge of distant business, political, and
regulatory environments.
Working
with "best friends" in remote jurisdictions also works well for large firms,
especially as a low-cost investment, which, if planned and managed properly,
can also reduce the risks presented as law firms follow their clients into new
jurisdictions.
Read more on the
Walker Clark Worldview Blog.
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