The modern reach of large international law firms is incredible. Firms that were once linked only to a region of the UK now have global reach, listing offices across Europe and Asia, and there are now many transatlantic tie-ups and a few high-profile mergers between UK-headquartered firms and firms in Australia.
It may seem difficult to see how smaller legal practices might fit into this picture when your entire practice could comfortably fit into the reception area of a Skadden Arps or a Herbert Smith Freehills.
However, in key ways the competitive edge the largest firms have over smaller firms has been shrinking.
The global boom in extractive activities has shifted client attention to jurisdictions that, for the most part, don’t feature in the list of permanent offices maintained by large firms. Baker & McKenzie has an office in resource-rich Peru – but few other international firms do, despite the fact that $131 billion of mining investment is expected to go into copper-rich Peru and Chile by 2020.
The growth in global trade (and particularly interest in such jurisdictions) has created fresh opportunities for small and medium-sized legal practices, which are now able to compete for business in a space that was once the preserve of large international law firms.
But the process of taking advantage of the opportunities on offer is not always obvious for smaller practices. The chances, however, are there. Here are some lessons that many smaller practices could profitably take on board—many come from clients who, by a certain amount of luck, won impressive instructions they had not sought, but whose experience is instructive.
Lesson 1: Be Clear What You Wish to be Known For
One firm I know got its first big international case because of its expertise in civil fraud claims. Its first major cross-border instruction, a $ 250 million-plus claim, was not the result of a pitch, but came from a client in South America that had looked at its record in securing freezing orders. A complementary practice that the firm had, defending parties facing criminal prosecution in high-value fraud cases, also looked good and credible to any observer.
The point is that smaller firms will never be a mini-version of the global giants – they stand out by being best in a niche. ‘Get big or get niche’ may now have the ring of a cliché, but in this context it rings true.
Lesson 2: Do Some Research
Once you have correctly identified, or built up, what you are known for, look carefully at how it might match a target jurisdiction. This need not be detailed research, but a look at publicly accessible information will give vital pointers.
If extractive industries are generating investment and income for a jurisdiction, is it doing so for a sovereign wealth fund, or for (now) high-net-worth individuals? If your firm is known for private client work, the latter is good, but the former may present fewer opportunities.
Lesson 3: Think About Cultural Links
You should identify people in your firm, even support staff, who have cultural links or linguistic skills that may help the business you are trying to build. Some firms will recruit to achieve this – they are well advised to do this only where research has shown they could fill a market need (see Lesson 2).
Lesson 4: Ask What Matters to Useful Contacts
The most inaccessible and powerful individual or company will have things they care about other than profit—the charities or good causes you care about may overlap with theirs.
If that is something you genuinely share with them, it is a good basis for a future relationship based on trust.
Lesson 5: Make Contact
A common cause of delay in implementing business development plans is a firm believing that the plan has to be too perfectly honed before being enacted. Lawyers are often risk averse, which makes them vulnerable to a march being stolen on them by peers who can overcome fears to gain first-mover advantage.
This is how entrepreneurs think. When your business plan is dependant on co-operation and association, you need to get started on the process of starting conversations that may, or may not, lead to immediate work.
Unpredictable conversations may produce opportunities that neither side had imagined. If going to international conferences, such as those run by the ABA, is part of your business plan, this open-minded approach is vital.
Lesson 6: Be Patient
This follows on from lesson 5 . Having made contact with professionals in other jurisdictions work may be immediate—or years down the line. This is a way to build trust, and to be in mind when a peer in another jurisdiction needs help with a matter for a client.
Growing a business means taking chances—you must have seen that with your own clients. Sensible gamblers set a limit, and when investing time and money in growing a business, it is advisable to be honest about what you can put in. But reputation growth that translates into instructions has a random element—if you are serious about your business plan, the ROI will often take a while to show.
If one lacks patience, often any investment was best not made at the outset.
Lesson 7: Create the Right ‘Background Noise’
Even in more traditional jurisdictions, people will Google your name and that of your firm. If you are quoted on, and have written on, your area of expertise, that is reassuring for potential clients.
If you can identify legal developments in your own jurisdiction that have implications for businesses in another, such as money laundering or bribery legislation, immigration or tax changes, there may even be opportunities to provide comment and articles in your target jurisdiction.
Lesson 8: Keep it Personal
Face-to-face meetings and social bonding remain hugely important in many jurisdictions, and the hurried transactional mindset that comes with the Anglo-American business style is seen as plain rude in many of the jurisdictions which are now of more recent interest. So invest time in attending conferences such as the ABA, contributing to the work of its committees, and be willing to travel.
And be generous with your time and with your favors. If they want tourist recommendations for members of their family, be helpful if you can. This is, after all, about establishing trust from people who could afford to trust someone else instead.
Lesson 9: Have a Social Media Voice
Even in a sector such as law the trend towards using social media in business is hard to ignore. There are several reasons for this, including the fact that it is so very effective in boosting profile and providing a way to demonstrate expertise to a wide pool of ‘listeners,’ as well as its cost-effective nature and the inescapable reality that it’s now a key part of a competitive marketing strategy. Social media has particular benefits for smaller enterprises, as it doesn’t require huge resources or an internationally renowned name to generate success. You don’t have to shout the loudest to win on social media—you just need to have a voice, so invest some time in honing your own to see almost- instant results.
Lesson 10: Market, don’t sell
There is an enormous difference between marketing genuinely useful and credible services and a hard sell. For many smaller firms, the increase in competition in recent years means more pressure applied by the economy and bigger firms looking to take over more niche practices as they lose competitive advantage. Fear of an imminent demise can lead to an undervaluing of what you have to offer. Although focused marketing might be new to some in the sector, a clear marketing strategy that incorporates elements of all of the above will ensure your firm is competitive, recognised, and will also create demand. It will help you define a place in the market and create a loyal client base in a way that resorting to hard selling just doesn’t do.
This list is far from exhaustive, but for smaller law firms may help shrink the competitive advantage enjoyed by the very largest firms in profiting from the growth in global trade.
*This article first appeared in Law Practice Today – the global magazine of the American Bar Association.