Law firms’ earnings season is almost as exciting as watching high tech stocks on Wall Street. The blowouts are big and stake out leadership positions. But these are no overnight successes. Each of these firms made bold and strategic moves with unmatched conviction — some earlier than others — all well in advance of March 2020. 5 of these moves stand out:
Kirkland, Latham, DLA Piper, Ropes & Gray, Cooley, Mintz, and Goodwin developed deep, industry-focused, go-to-market strategies. Duane Morris saw revenue and profits accelerate after adopting its industry-focused strategy. Clients tell us Skadden digs in to understand their business and the deal. Top legal decision makers repeatedly tell us a law firm’s understanding of their business is the biggest differentiator in the legal market today. It is also one of the largest drivers of premium rates.
The Best Industries
The firms with the most impressive growth rates are focusing on the highest growth industries. Tech, Life Sciences, Private Equity, and M&A dominated the increased spending on law firms. The firms with mature industry programs became the go-to firms in these hot industries. They had already done the legwork and research to establish a leading position.
The Lateral Process
Some firms seek lateral partners while others look to fill specific roles — but the firms crushing earnings make sure the partners are successful after arrival. Kirkland, Latham, Cooley, Paul Weiss, and Ropes & Gray make this a marquee strength.
Dedicating resources (people, research, and tools) to understand individual client needs, expectations, and deliver across a spectrum of client needs is a proven and potent strategy. You will find this approach at the core of high growth firms who benefit from delivering a multitude of services — especially Latham and Kirkland.
Client Service Is a Core Principle
Every firm with outsized earnings and growth is a client service leader. At least 8 of the highest earning firms are on the BTI Client Service 30 this year and the rest are in the top 2% of all law firms. Excellent client service is a key component of client growth, inbound referrals, higher rates, and retention. And will keep clients working with your firm well beyond any surge in demand.
Firms of any size can adopt these strategies — and enjoy the results.
Start with client service; it sets up the framework for everything else. Develop standards and performance metrics for serving clients. These will drive how you implement the rest.
While the largest firms are the frontrunners — small and midsize firms can deliver the same results in their region(s), industry, and key growing practices such as data privacy, midsize private equity, life sciences, food, agritech, high tech, and media. These markets are big and boast start-ups, companies in the early development stages, and soon-to-be large companies — all with complex needs. And as the largest law firms continue to grow, the more they want only the largest clients — leaving the field open for so many small and midsize firms.
Best in the market ahead.
The Mad Clientist
You can learn about industry focus here courtesy of Patrick J McKenna.