Why clients want you to collaborate – and 5 steps to do it successfully

At the recent World Masters of Law Firm Management seminar in Sydney, the focus was on smart collaboration and why it is a strategic imperative for all firms. Cameron Cooper reports.

Professor Heidi K. Gardner issues a clear warning to law firm managers who think collaboration is nothing more than a trend which has had its day.

A Distinguished Fellow at Harvard Law School’s Center on the Legal Profession, her research reveals that when more practices serve a client, that client typically generates more revenue for the firm each year. Simply moving from one to two practices serving a client triples the revenue that the client is likely to deliver for the firm. Add more practices to the mix and revenue will grow further. In short, firms that shun smart collaboration are likely to pay a high price.

Speaking recently at the World Masters of Law Firm Management seminar in Sydney, Gardner told attendees that the need for collaboration will only increase in law firms, despite some critics taking the view that it is “just today’s management fad and if I keep my head down and just power forward this too shall pass”. She says research-based evidence points to the importance for firms of collaboration at a time when two trends are accelerating – first, the rise of “super-specialised experts” who become authorities in niche areas of the law; and second, an environment in which VUCA – short for volatility, uncertainty, complexity and ambiguity – is part and parcel of everyday business.

“The problem is that if you’re one of those sceptics, and if we’re right and these trends keep going forward at a pace, they’re going to continue crashing against each other in ways that make collaboration more important than ever,” says Gardner, author of the acclaimed business management book Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos. Perhaps the biggest dilemma for those who deride smart collaboration, according to Gardner, is that the clients of law firms want, and are increasingly demanding, internal and external collaboration from their firms. Here are four key reasons why clients care about collaboration.

1. They want access to the best knowledge and experts within a firm

In the modern business world, many clients are extremely sophisticated and well resourced – indeed, they must be to thrive in a complex environment in which competition has never been higher and disruption is a constant factor. So they want to be able to tap into the insights of the best experts when tackling their toughest problems. Gardner notes that many businesses can no longer rely on just one expert for advice and, truth be known, they may be wary of a lawyer who purports to know everything.

While internal structures within law firms are essential for smart collaboration, they should appreciate that the key to successful collaboration is focusing on the needs of the client. “This has all got to be client centric,” Gardner says.

2. They want firms that have a deep understanding of their business and sector

A real opportunity exists for law firms to add value for clients through collaboration. If you give clients broader insights into what is happening in their industry, including what their competitors are doing, they will love you for it because they often suffer as a result of being deeply siloed. “They want thought leadership and insights,” says Gardner, citing potential advice around new rules and regulations that could have a dramatic impact on their success or otherwise.

She says having different lawyers touching different components of a business can bring market intelligence together and “help clients see around a corner”. Just as importantly, a firm stands a real chance of earning additional revenue from those expanded relationships.

Gardner believes clients increasingly see their problems through a prism of the aforementioned VUCA. In a global and changing world, C-suite leaders are reporting that complexity is one of their biggest challenges. So they want their external advisers to collaborate with the partners in their firm to ensure they bring the full force of their powers to their organisation. They do not care about a firm’s internal politics, structures or issues; they just want the best available advice.

“Insight is the new advice – it’s just that it takes a team,” Gardner told World Masters attendees. “It’s really hard to generate insights on your own.”

3. They want help on the innovation front

Gardner says clients have a perception that teams of lawyers are more innovative than individual lawyers, regardless of how talented a single practitioner may be. Their perceptions are backed up by hard scientific evidence. Consequently, they expect law firms to give them access to multiple partners and their combined knowledge, experience and insights.

However, clients want smart collaboration through integrated client service that often crosses practice groups and other siloes. This should not be confused with cross-selling, a phenomenon which most clients truly despise. The key, according to Gardner, is that a client’s problem has to be complicated enough to warrant the input of multiple experts who can use innovative practices to make a difference to their clients’ operations. “As the world is changing so fast around us, we are desperate for teams of people who can help us understand that.”

To encourage innovation, Gardner says the best firms are adopting ‘design thinking’ approaches as they seek to innovate within their client service offerings. This entails testing ideas and then discarding the failed experiments while pursuing the promising ones.

4. They want to benefit from collaborative capacity

Progressive clients are adept at examining law firms and determining if there is clever interaction between colleagues. Gardner says they take a dim view of firms that cannot demonstrate signs of collaboration. “If you can’t even team up with your own colleagues, how are you going to do it when it’s really tough, when you are supposed to be teaming up with competitors?” she asks.

Internal collaboration, or its absence, signals a firm’s broader collaborative capacity. As a result, clients want to see their law firm’s teams working together and demonstrating the right mindset and adoption of technology.

In Smart Collaboration, Gardner points to a range of other reasons why clients want their law firms to be collaborative – such an approach enables global reach; leads to high-quality results and mitigates risks; facilitates consistency of service levels; promotes simplicity; fosters responsiveness; increases efficiency; and builds strong bonds. Given all those factors, law firms should be embracing collaboration for their own benefit and that of their clients. It is important, to realise, however, that not all clients will care about all of those abovementioned factors. “So you and your colleagues have to be sophisticated enough to know what resonates with your clients,” Gardner says.

At World Masters, she addressed some key ways to initiate smart collaboration.

5 steps to start your collaboration journey

The key to smart collaboration, according to Gardner, is ensuring that it delivers extra value for clients. That rules out blatant cross-selling, or adopting a McDonald’s-style marketing agenda of ‘do you want fries with that?’

1. Increase you firm’s collaborative capabilities

Gardner says it is incumbent on all firms to equip their lawyers with the skills to become more effective client handlers. At a minimum, leaders must give their personnel adequate support and training. Developing a personalised competency grid can also be beneficial – this tool defines the core capabilities that people need to succeed in their roles. Team leaders can help their colleagues determine which areas to prioritise. The effect is to push individuals to build on their strengths, and it helps foster smart collaboration because the process highlights the contributions required for effective cross-boundary work.

2. Determine the state of play in your firm

At World Masters, Gardner outlined the approach of one firm that has successfully embraced smart collaboration. It began by listing all its practices and clients and then asked the question: “Where are we serving them, and where is the white space?”

This basic piece of analysis then opens the way for the firm’s leaders to decide which experts are best placed to serve clients and in what fashion. For example, your employment team may be able to add value to the retail team’s clients, and vice-versa. Who has relationships with key clients? Who has access to crucial knowledge? Who can tap into the relevant market insights? Who can solve particular problems? “Once you understand where there are some gaps it’s important to then know who is it that is well placed to offer service,” Gardner says. “What we often find is that there are many kinds of untapped resources within an organisation.”

This process of discovery is essential to bring structure and transparency to collaboration, allowing firms to use all the expertise they have built up; otherwise “it’s like having a bank account where you’ve lost your ATM card”.

3. Counter the naysayers within your firm

Gardner says law firm leaders should not underestimate the pushback they are likely to receive internally from partners who do not want to pursue collaboration. “There will be plenty of naysayers who say it won’t work here,” she says.

One argument the critics will invariably mount is that collaboration leads to discounting as different teams are brought on to serve one client. The theory is that if you give a client more and more purchasing power, they will demand “bigger and bigger discounts”.

However, Gardner’s research indicates that such discounting is minimal in the first instance and that the benefits quickly outweigh any negatives. She says it is important to check the data to see if the naysayers are right. “If you don’t know what happens to profitability as you increase collaboration, you just don’t have a story to tell. You’ve got to interrogate the data.”

One important element is to know your “magnet practice” – the high-traffic practice that typically has first contact with clients and then clears the path for others to follow. It sets the tone – and the pricing – for the relationship.

4. Create multiple-partner relationships with your clients

In many firms, client relationships are essentially “owned” by individual partners, rather than being seen as assets of the firm. Gardner says encouraging smart collaboration within such a culture is extremely difficult. So take steps to ensure that a number of partners enjoy strong relationships with important clients.

5. Identify collaboration role models within your firm

“If you want to foster smart collaboration, do you know who you can hold up as role models?” Gardner asks. Within firms, it is important to understand people’s competencies and to leverage their complementary strengths. By identifying role models who can promote smart collaboration, firms will heighten their chances of “collaborating in a fashion that produces results”. Those leaders need to be insightful and decisive, while having the ability to defuse team conflicts if they arise.

Gardner acknowledges that smart collaboration requires an investment in time and resources. “All of the things that it takes to collaborate – building relationships, understanding other people’s jargon, having tough discussions with the client – are costs that are borne early on as you start to collaborate. But the benefits, such as stronger revenues, profits and client longevity and client attraction, they take time to flow in.”

So be patient, but do not put off collaboration for too long because such indecision will come at an even higher overall cost to the firm. Gardner’s concluding message is that smart collaboration is not a “nice-to have – it’s a strategic imperative”.

World Masters

At the World Masters of Law Firm Management seminar in Sydney, legal practitioners had a chance to learn about collaboration from Professor Heidi Gardner using the renowned Harvard University case study methodology. Professor Gardner joins a renowned list of previous keynote presenters at World Masters events, including David Maister, Thomas DeLong, Ron Baker, Ed Weissman, Stephen Mayson, Gerry Riskin, Ashish Nanda, Richard Susskind and Karim Lakhani, all of whom are highly regarded international leaders in their fields.