Black swans are no longer anomalies. Anything can and will happen.

Clients now routinely think of all the internal and external factors which could even remotely impact a deal. This includes everything from pandemics and natural disasters to a hairpin turn in public policy. Not to mention stock market volatility and evolving work from home rules.

Clients point to 32 law firms to get the deal done no matter what. Clients say they will find a way and make it happen — no matter what the obstacle. Please join me in congratulating these BTI Dauntless Dealmakers — who can handle whatever the world throws at them.

The 5 Dauntless Dealmakers

Clients single out of 5 firms as truly dauntless. Nothing stops them. They are unrelenting, client-centric, and bring conviction in their approach. These firms are, in alpha order:

Cravath, Swaine & Moore

Latham & Watkins

Skadden

Sullivan & Cromwell

Wachtell, Lipton, Rosen & Katz

The Diligent Dealmakers

Clients point to another 7 firms who don’t let any obstacles get in the way. They challenge the Dauntless Dealmakers in their relentless approach and prowess. These firms are:

Baker McKenzie

Davis Polk

Jones Day

Kirkland & Ellis

McDermott Will & Emery

Shearman & Sterling

Wilson Sonsini Goodrich & Rosati

The Deft Dealmakers

Top decision makers see another 20 firms bringing a rare sense of deal savvy, determination, and boundless energy to get the deal done. These law firms are:

Bryan Cave Leighton Paisner

Clifford Chance

DLA Piper

Eversheds Sutherland

Foley & Lardner

Fried Frank

Gibson Dunn

King & Spalding

Kutak Rock

Lewis Rice

Mayer Brown

Mintz

Morgan Lewis

Nixon Peabody

Paul Hastings

Ropes & Gray

Sidley

Weil

WilmerHale

Winston & Strawn

What Makes a Law Firm Dauntless?

Clients tell us 6 key behaviors separate these law firms from the others:

• • Nimble — they move and change based on known and unknown events
  • Practical — no time for theory, clients say their feet are firmly on the ground
  • Anticipate — these firms look way ahead, create scenarios, and play things out in their minds in multiple ways so they are ready for whatever comes next
  • Communicate — keeping clients in the loop is key — silence kills client confidence — and you become much less dauntless in silence
  • Confident — there is no doubt — or at least any doubt showing to the client
  • Don’t give up — any obstacle is just something else to overcome — and quickly

The dauntless firms include midsize firms and large firms. Not all daunting deals are mega deals — clients report some midsize and smaller deals can get pretty thorny.

Please join me in congratulating every firm on their ability to impress and gain the confidence of the most demanding clients in the world.

This research is based on more than 325 in-depth interviews with top legal decision makers after the pandemic started. You can find details on this and more in our brand new report the BTI M&A Outlook 2022: A Whole New World of M&A. This report covers every aspect of what may be the most robust M&A legal market in the last 30 years. Learn more here.

Best in the market ahead. And be safe.

MBR

The Mad Clientist

The post Clients Single Out the 32 Law Firms Who Can Get Any Deal Done — No Matter What appeared first on The BTI Consulting Group.

Deals are getting bigger than anyone is thinking about. Way bigger.

Older established companies—Raytheon, UTX, Fiat Chrysler, and Renault come to mind—now see M&A as only 1 of a small number of strategies to drive growth, reduce costs, create the necessary scale to compete, or take on the massive R&D risk to develop transformational products. This is part of the new world order.

Newer companies—Amazon, Apple, Facebook, and QUALCOMM—look to M&A to position themselves for the future. These companies don’t let size faze them. They may face strong political headwinds, but these organizations are smart and relentless. The headwinds just add to the complexity—making these deals high risk even if they are not mega-sized.

Clients believe only a handful of law firms are truly positioned to handle the size, scale, and complexity these deals bring. Ultimately, clients see the field of law firms able to play lead counsel on these deals as small—maybe 12 to 20 players total.

The Titan Deal Firms (TDF) will configure themselves, build the infrastructure, and staff up for the biggest deals to come. And, they will hunt this work down around the world. The successful TDFs will enjoy premier branding to attract inbound leads. TDFs will learn to hone their business development skills to position themselves to be hired 6 months before clients seriously start acting on any deal—which is how most M&A hires are made.

We also see this happening in the Private Equity world. Deals are getting bigger and more capital is being put to work. These shifts in deal size lead to unprecedented opportunity for law firms of all sizes and stature.

Great News for All Other Firms

As law firms in the M&A space migrate to the Titan deals in the market, there is unprecedented opportunities for new players to get into this lucrative space. Firms outside the mega-deal firms will win big. These firms will take on the deals the TDF firms leave behind or refer out. All firms will move up and have access to larger deals as they step in to fill the void in the market. The real winners will start to position themselves now—changing their pitches to engage large clients in dialogue about M&A. You can follow the playbook:

I also recommend revisiting your strategic plans for M&A. The successful firms, the ones able to fill the void (and the TDFs) will design their strategy, resources, metrics, and goals to drive success. This includes deep and penetrating feedback on how clients are planning their M&A—as your clients are key drivers in your success.

There are few opportunities to witness, never mind participate in, a fundamental redefinition of the market. There is little downside risk for anyone with (or who wants) a meaningful M&A practice. The upside is enormous—and you can say you were there.

Congrats to Shearman & Sterling and Wachtell on their roles in the market-defining deal between Raytheon and UTX. And look for more to come.

Best of luck in the market ahead.

MBR

The post Here’s Exactly How the Raytheon UTX Deal Impacts Every Single Law Firm appeared first on The BTI Consulting Group.

Another move, another round of guessing. The Big 4 legal services question is no longer if and when—it’s how much and how fast.

How are the Big 4 going to make their law splash known? EY just took another step closer. More of a baby step than PwC setting up a Washington, DC office, but a step none the less. EY’s acquisition of Riverview Law expands EY’s presence in the managed legal services game—a market where they already supply services.

Not Performing as Well as Law Firms

Currently, corporate counsel and legal decision makers rate legal outsource providers a 7.7 out of 10 for overall experience. By contrast, a primary law firm—who provides the same services—earns an 8.7 out of 10 for their client experience. Law firms have an edge, and Alternative Legal Services Providers (ALSPs) still have an uphill battle. This is one place where EY can crush its competitors—the firm’s knowledge of and ability to deliver an exceptional client experience is a differentiating source of advantage.

EY also knows how to scale and leverage technology. This is where their real strength plays out. When and how EY invests to scale will be the event to watch. Otherwise, the Big 4 firm is just another player in an early stage market.

Managed legal services gives EY additional exposure to the GC’s office—a maneuver critically needed to make a full-scale move into legal. EY will use this acquisition to further develop relationships, better understand client needs, and develop client-by-client strategies to sell legal services. This is no different than what the best performing law firms do. Law firms lacking client-specific plans are immediately at risk.

A Wide-Open Market

In the US, only 60% of GC offices have been approached by ALSPs. BTI research shows 39% of corporate legal departments have tried an ALSP in some form. This leaves more than half the US market untested and untapped. This also suggests the ALSP who can scale their sales and marketing first will have a serious advantage—at least in the US.

The decision to use ALSPs in the US sits squarely with the GC. They may get a slight nudge or push to use an ALSP from a CFO—but, few will question the Chief Legal Officer on this one. The CLO owns the risk—they own the decision.

The EY acquisition is one more prod to law firms to rethink their game. They don’t want to leave doors open for the Big 4 by staying out of the managed services game. Law firms can partner with managed service providers or do it themselves. ElevateNext comes to mind as a team talking about this for a long time and consists of Elevate and the founders of Valorem Law Group. But, even the firms not doing anything would benefit from making a formal assessment and decision instead of passively opting out.

The only events which would dampen the Big 4’s encroachment into legal would be an accounting crisis like Sarbanes-Oxley or the loss of a large accounting firm. Both are in the highly unlikely category. The future is now. Baby step or not—the Big 4 are here.

This is a small excerpt from our upcoming report, BTI Innovation Review and Outlook: Corporate Counsel Rank Law Firms and Their Needs 2019, to be released in September 2018. BTI analyzes the ALSP market as well as client innovation and technology needs, and ranks law firm performance—by name.

MBR

(Based on more than 400 in-depth interviews with strategically selected top legal decision makers in the US at companies with $1 billion or more in revenue between November 2017 and July 2018.)

The post EY Circles Its Legal Prey as It Acquires Riverview appeared first on The BTI Consulting Group.

The ink isn’t quite dry yet on our most current research. But, we see clear signs of subtle change with big impacts. We just finished in-depth interviews with more than 300 top legal decision makers—here is what we are learning:

Complex Work is Morphing into Bet-The-Company Work Mid Matter

Matters starting out as complex are growing into bet-the-company matters. Top legal officers report the newly bestowed bet-the-company status is a direct result of increased financial exposure. Litigation matters start out contained—then grow and attract regulators, other plaintiffs, and a growing list of securities litigators if the company is public.

This trend is bad for clients but gives law firms real opportunity to join the exclusive bet-the company club for firms who are looking for entry. It is also causing serious damage to law firms who don’t realize they are now handling bet-the-company work.

Clients Have Less Patience than Ever

The value of a client’s time is increasing as the complexity of their matters remains at peak levels. Clients are spending more time managing risk and strategizing—leaving less time to track down attorneys, matter details, budget status, and other issues which steal precious time from your client’s main mission. And the more valuable a client’s time—the less they have for nonvalue-added tasks. Law firms are losing serious work because they don’t provide comprehensive and timely status reports. This reporting is just as important as the legal strategy.

Large firms are in their 4th year of outspending other law firms in client development—and keep winning more work than other firms.

Much is being made of the largest law firms growing much faster than other firms. 2018 marks the 4th year in a row these largest firms spend 1/3 more on client development than all other law firms. This is the reason they are winning so much new business—they have been spending more and working harder to get it.

Mid-size Firms Living Large in Mid-size M&A

Mid-size and smaller firms are carving out preferred relationships with the largest law firms to handle the small deals larger firms don’t find economical. The largest firms are all chasing large deals and private equity. It’s a great market with great clients. But these large firms can’t do small deals—and don’t want to. A clever group of mid-size firms, think 100 to 400 attorneys, are making a nice living developing preferred relationships to handle these smaller deals and service the daylights out of the clients and larger law firms.

This adds to the already established trend of mid-size firms having an especially strong position with non-US-based companies for making US-based acquisitions.

AFAs are Back

Client interest in AFAs is gaining new momentum as complex litigation grows faster than budgets are increasing—and is squeezing the routine work. Top legal officers are finding AFAs and settlements are 2 powerful tools to manage budgets and squeeze more litigation money out of the budget for the more expensive and complex matters.

Spot and Ride the Trends

The fast movers are grabbing clients while other law firms aren’t even looking as they take advantage of these trends. It is 1 the most effective tools to develop business and build enduring relationships.

Partners in a continuing dialogue with their clients are the first to learn these trends—clients will have shared them through words and behaviors. You can also predict and anticipate these trends through well-crafted and executed client feedback. Your chances of picking and using these trends to your advantage are directly linked to the frequency and depth of your client feedback. They are also linked to knowing exactly why clients bring you in and if the reason they bring you in changes. And, one thing is as sure as death and taxes—client needs will change.

MBR

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