Looking for a best friend

Looking for a best friend

"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:

  1. Strategic relationships should be based on your clients' future needs and where they are likely to arise.
  2. 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.
  3. Bigger is not always better.
  4. Be content with non-exclusivity.
  5. 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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