With a lateral hiring focus, DC law firms miss the forest for the trees

According to a report published in the Washington Post yesterday, two Washington, DC law firms are prioritizing lateral hiring as a means by which to achieve growth.

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The story of lateral hiring as a means by which to achieve growth is not a new one – despite the fact that lateral hiring is not an effective means by which to achieve that goal.  That this strategy continues to be pursed by law firms seeking to grow DC-specific practices – reveals a lack of awareness of what more effective options are available to achieve it.  Too, DC arguably has the most attractive potential services offer for both domestic clients as well as foreign.  Hence, alternatives to lateral hiring are particularly important for DC law firms to be aware of.

Lateral Hiring doesn’t work

As William Henderson and Christopher Zorn recently outlined in The American Lawyer: “More than ever, firms look to laterals to boost profitability. But the data shows that it’s not working.”  Henderson and Zorn cite studies indicating the top priority of law firm partners is revenue growth, but that lateral hiring doesn’t achieve that goal.  Instead, the lateral hiring market is driven more by a perception that it does.  “In the absence of organic growth, incoming lateral partners provide evidence that the firm is still vital and attractive.  Most laterals fall well short of their projected “realistic” revenue goals. Engaging in lateral partner hiring helps persuade partners and practice group leaders, particularly those sponsoring a lateral candidate they perceive to be desirable, that the firm is “doing something” vis-à-vis peer firms”, as Zorn and Henderson outline

Why the lateral issue is particularly important for DC law firms

Washington, DC law firms benefit from sitting atop the world’s top economy.  And in particular, the world’s largest public procurement economy.  Were it a country, the US Federal Government public procurement regime would be the world’s 4th largest economy.  Many legal practices unique to Washington are uniquely well suited to attracting a domestic and foreign client base — as they often appeal directly to a prospective client’s commercial objectives.

Given the low rate of new revenue growth lateral hiring produces, DC law firms ought instead to be implementing the more effective effort of specialized outbound business development initiatives as a means by which to achieve growth.  A focus on lateral hiring implies law firm leaders have given up on growth outside the arbitrage of lateral hiring and mergers — and that they believe the market for legal services is finite.  This is a myth.  Contrary to conventional wisdom, there is a world of opportunity outside Washington and America waiting for an outbound business development effort.  It’s time to stop the lateral hiring frenzy and get serious about outbound business development.

John Grimley helps law firms, law firm practice groups, individual lawyers, financial services and governmental relations professionals develop and implement custom business development initiatives. To enquire about his services, contact him at +1.213.814.2855 or at jg@jgrimley.com.

4 mistakes to avoid when building an international client base

In recent weeks, the subject of international business development for smaller law firms has received a good deal of attention.  In one case, Melissa Davis, Managing Director of London-based MD Communications, published an article about how lawyers in smaller firms can build an international client base as a follow-up to her recent appearance on the same subject in New York at the American Bar Association Spring Meeting.

ABA Law Practice Today also published another article on the same subject by Robert Bata of Warwick Place Legal.  As both authors point out – the opportunities for law firms to build an international client base have never been better – but the strategic choices firms need to make to do so – are vital for success.

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With these new articles on the subject in mind, I thought I’d write a new post to follow-up my last post, entitled: 3 compelling reasons to build an international client base.  In that post I point out that, should lawyers want to diversify their income stream and make their life more interesting – then following rising foreign direct investment flows to generate more business for their practice – is a wise use of their business development and marketing time.

In this post, I’m about to outline what 4 major mistakes to avoid in embarking upon any international business development effort.  And here they are:

Travelling as a first step, not a last step –  Before ever thinking about booking a flight to a foreign capital in order to generate new revenue – lawyers must first lay the groundwork for making those efforts pay off.  Travelling is the final, not the first step, in a productive international business development initiative for any lawyer.

Not doing your research first – Research, not travel, is the first step in the process of building an international client base.  Determining which markets you will focus on and why – as well as what services offers you will seek to lead with to build that international client base – are essential.  Once the basics are in place – it’s then important to develop client-centric, well researched efforts around commercial objectives clients are seeking to secure in your market.  This takes rarefied understanding of how to match client objectives with legal services offers to maximize interest among ideal potential clients.

Not establishing an effective social media presence first – In an increasingly interconnected international marketplace – I’ve noticed that lawyers who maintain law blogs – are becoming more and more identified as nearly synonymous with their respective international jurisdictions. By blogging about legal issues in their markets – they have become well-known far beyond their borders – and are often regarded as a “go-to” person for their market.  Before you ever travel – build a credible social media presence.  That way you’ll be well-known by ideal referral sources and some potential clients – before you ever step on a plane.

Not keeping track of your efforts – Before you begin the process of international business development – do something – even something simple – to track your efforts.  For solo practitioners or small law firms – simply make sure to keep a list of the companies and referral sources you’re planning to contact.  For large international law firms – a CRM system well implemented – can be very helpful.  Either way – tracking your efforts – is essential for maximum return on investment.

I have worked closely with professional services providers from around the world for years — from large to small firms – to build via a 5-step process unique, custom client bases around their unique goals and needs.  If you would like to discuss how I might help you – please contact me at: Email: jg@jgrimley.com, or Skype: JohnGrimley or by telephone: +1 (213) 814-2855.  I would be happy to discuss with you how we might work together to help you build an international client base. - John Grimley Please also see:  5 Steps to More Foreign Clients

3 compelling reasons to build an international client base

Whether you’re a lawyer, investment banker, accountant, or other professional services provider – building an international client base can be a very rewarding and interesting effort.

And since the arrival of the internet – and the growing increase and diversification in global trade, it’s become easier and more attractive for professionals in small and medium-sized firms to win new business from foreign clients too.

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I see three compelling reasons why you may wish to seriously consider building an international client base:

International trade increases every yearEvery year, trade among the world’s nations increases.  And importantly, that trade is diversifying. While over 40% of the world’s economy is shared by the European Union and the United States – trade among developing nations is quickly accelerating and expanding.  For example, Chinese investment into Latin America will soon exceed that of the European Union.  The important message here for professional services providers is:  Much opportunity exists to help foreign clients, and that opportunity is expanding every year.

Diversification of your client base – Many professional services providers naturally focus on primarily building a domestic client base.  Time and a perceived complexity of pursuing foreign clients sometimes makes pursuing foreign clients a less significant priority. However, it’s important to remember that a foreign client base serves to diversify a client base, solidifying the stability and longevity of your practice.  A foreign client base can be achieved within the time constraints you might have in your marketing and business development efforts – if those efforts are well planned and implemented.

Your work becomes more fun and interesting – Working with foreign clients is an exciting and interesting thing to do.  Helping others from around the world brings one in closer working collaboration with people from diverse backgrounds.  Helping others enter and thrive in your home market – can be a very satisfying endeavor and will add a new dimension to your practice and your life.

Build your foreign client base

Building a foreign client base may seem at first glance to be too complicated — or time-consuming — or expensive.  But none of these three things has to be true.  The benefits I’ve outlined above make the effort at least worth exploring.  Practitioners from large law firms to solo practitioners alike can build a foreign client base if they wish to.  Putting the right plan in place which is uniquely tailored to your practice, then knowing how to implement that plan in a cost and time efficient manner, is essential, however.

I have worked closely with professional services providers from around the world for years — from large to small firms – to build via a 5-step process unique, custom client bases around their unique goals and needs.  If you would like to discuss how I might help you – please contact me at: Email: jg@jgrimley.com, or Skype: JohnGrimley.  I would be happy to discuss with you how we might work together to help you build an international client base. – John Grimley Please also see:  5 Steps to More Foreign Clients

US legal marketers convene amid a global economic spring

“Global economic growth [is] now forecast to accelerate on the back of reducing austerity in advanced economies – and Europe [in particular is] forecast to record positive growth after two years of contraction.”  So said global mining company GlencoreXstrata CEO Ivan Glasenberg, in a speech in Johannesburg last month.  And Joseph Lake, U.S. analyst for The Economist Intelligence Unit, predicts the US growth rate will reach 3% in 2014, the highest since 2005.

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Importantly, the EU and US economies together reflect in excess of 40% of the world’s GDP, according to the Congressional Research Service.  And according to recently released figures from the International Monetary Fund (IMF): “Overall, growth in emerging market and developing economies is expected to increase to 5.1 percent in 2014 and to 5.4 percent in 2015.”

Recent challenges to law firm revenue may change

Why are these economic figures important to the legal service sector?  In recent years traditional law firms have faced challenges to revenue and in some cases survival by a combination of low economic growth and changes within the competitive landscape in legal services.

Last year, America’s Legal Marketing Association met for its’ annual convention in April in Las Vegas – where  David B. Wilkins, Lester Kissel Professor of Law at Harvard Law School and Vice Dean for Global Initiatives on the Legal Profession – delivered the conference keynote address. Professor Wilkins outlined how the heartbeat of the global economy is moving away from the US, and that law firms need to adapt.  Wilkins pointed to International Monetary Fund (IMF) statistics projecting that the West’s share of global GDP will decline from 41% to 18% by 2050.  Wilkins predicted that clients will increasingly look to their law firms for more help in understanding how globalization affects their domestic and global businesses.  This global complexity will ultimately lead to an increase in demand for high-end legal services, he predicted.

Trends have borne out Professor Wilkins predictions

Diversifying global economic growth and investment flows have seen some US law firms seek to secure new revenue from niche areas within developed markets and from emerging market economies.  Assisted not just by economic growth, but also liberalization of legal services markets and domestic regulatory hurdles to financial and other transactions key to revenue generation for sophisticated practices.

A case in point

The Korea-US Free Trade Agreement (KORUS) coupled with a domestic Korean easing of restrictions on foreign ownership of Korean companies is one example among many where markets are opening and law firms from America are creatively engaging with those markets to realize new revenue streams or augment existing ones.

What’s next for US law firms in international markets?

This week, the LMA meets again in Orlando, Florida.  With the trends Professor Wilkins outlined last year continuing apace – it will be interesting to see what additional insights and strategies on the subject may come out of LMA’s gathering this year – and what US law firms will do next in further reaction to these trends.

John Grimley helps law firms, law firm practice groups, individual lawyers, financial services and governmental relations professionals develop and implement custom business development initiatives. To enquire about his services, contact him at +1.213.814.2855 or at jg@jgrimley.com.

How Latin American law firms can secure more Chinese clients

“Latin America’s trade with China will surpass that of the continent with Europe in two years, according to a United Nations study, with some predicting it will eventually eclipse its trade with the United States.” – as Toh Han Shih reported earlier this month in the South China Morning Post (SCMP).

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As the report continued: ‘Trade between China and Latin America grew 8 per cent to US$255.5 billion in 2012, faster than the 6.2 per cent growth of the continent’s trade with the US, according to the International Monetary Fund.  [And} China is already the biggest trading partner of Brazil, Chile and Peru. Its trade with Brazil grew 10 per cent last year to US$83.3 billion, according to the Brazilian Ministry of Commerce."

The report also highlights that: "In 2012, trade between Mexico and China grew 7.6 per cent to US$62.66 billion, according to official Mexican data.   [And] Chile’s government received investment applications totalling more than US$200 million from Chinese companies in 2012, positioning China for the first time as one of the 10 largest sources of investment applications in the country, according to the Chile Investment Review, a Chilean government publication.”

Which sectors is China investment focused on in Latin America?

While Chinese investment has been diversified, the SCMP does point out a focus by “Chinese invest[ors] in [Latin America]‘s energy and infrastructure sectors as rising rapidly, with more than US$550 billion of infrastructure projects in the market.  A growth in Latin American procurement opportunities and liberalization of its’ energy markets has been central to this trend.

What can Latin America’s lawyers do to secure work around Chinese investment?

The pace of change in investment flows into Latin America is nothing short of staggering, requiring a re-think by Latin America’s law firms of where they should be focusing at least some of their business development and marketing energy.  The US and EU, while still essential in any effort, should not continue to remain more important than the Asia-Pacific market, and in particular, China.

Some entrepreneurial Latin American lawyers are already actively seeking to attract Chinese and other Asia-Pacific companies and referral sources.  A case in point is Alberto Esenaro, author of Mexican Law Blog, who frequently outlines the commercial opportunities available to Chinese companies in the Mexico energy, telecom, retail and automotive space.

Jonas Lima, Managing Partner of Brasilia-based law firm Lima & Curvello Rocha has taken a very personal approach, characterized by, among other efforts, his appearance in Hong Kong at Brazil Invest 2012, where he provided Chinese corporate executives with an in-person briefing on specific public procurement opportunities available to them in Brazil.

Research and plan before acting

But efforts like Esenaro’s and Limas’ cannot be made without first researching and identifying what opportunities exist for Chinese companies in domestic Latin American markets, while also developing a plan around how best to tailor your law firm’s services to meet the needs of Chinese clients.

After a research effort and blogging strategy is in place, a specific effort to reach out to those companies and referral sources in China must then be put in place as well.  All of this must be done with informed precision so as to avoid wasted time and effort.

Broadly, these efforts would be first steps for any Latin American law firms that wish to secure work around Chinese investment.  Latin America’s lawyers who make these and other well planned efforts – will build a long-term source of new business around China’s growing investment into Latin America.

John Grimley helps law firms, law firm practice groups, individual lawyers, financial services and governmental relations professionals develop and implement custom business development initiatives. If you would like to discuss how he might help your law firm build a client base around Chinese foreign direct investment, please contact him at Tel: +1.213.814.2855 or at Email: jg@jgrimley.com or on Skype at: JohnGrimley

China’s fast growing investment into the US offers opportunity for lawyers

Chinese foreign direct investment is expected to double between now and 2020.  And the United States is the number one recipient of that foreign investment.  Within these figures lies tremendous opportunity for US lawyers to build a client base around this growing Chinese investment into the United States.

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“Chinese investment in the US last year doubled to a record US$14 billion, up from less than US$1 billion in 2008. Already this year, US$6 billion in deals have been signed, including Lenovo Group’s US$2.9 billion purchase of Motorola Mobility’s smartphone business, according to consultancy Rhodium Group.

Most of last year’s 82 transactions involved private Chinese companies…In 2013, Chinese companies started operations in Michigan, Ohio, Pennsylvania and Illinois.

More than 70,000 Americans now work for Chinese employers, eight times the 2007 number. In Lafayette, Indiana, [Chinese company] Nanshan – based in Longkou, Shandong province – created 105 jobs at its aluminium extrusions plant with a total of 200 expected by the end of next year.”

These statistics and observations appeared today in the South China Morning Post [SCMP] and were shared by Richard Smith, Australia-based legal business developer, on the LinkedIn group Asia Law Portal.

And as the SCMP further highlighted: “More Chinese companies are expected to go overseas following the planned elimination of mandatory central government approvals. By 2020…Chinese direct investment abroad [is expected] to [grow from] US$1 trillion to US$2 trillion, up from about US$500 billion.  Already, China is the third-largest overseas investor, trailing the US and Japan, according to the Organisation for Economic Co-operation and Development [OECD].”

The opportunity for lawyers

The opportunity for lawyers is a clear one.  With Chinese foreign direct investment poised to double in the next 6 years, and in that the prime focus of this investment is the United States – entrepreneurial US lawyers would be very wise to focus on securing work around this investment.  Some already have – and with very significant success.

A case in point among others is the lawyers at Harris & Moure pllc in Seattle, who actively blog at China Law Blog.  And there are more.  But any US business-oriented law firm can begin a successful effort to win new business around China’s investment into the US.  Whether you’re an individual practitioner, small or mid-size law firm — or an AmLaw 200 firm.  Any practitioner, practice group or firm of any size – can choose to become a gateway to the American market.  Or if more ambitious, medium-sized and larger law firms can establish an overseas business development representative office in China.  These are among a number of options, which if adopted and implemented effectively, will with certainty lead to a new legal client base around Chinese investment into the US.

For further reading on the subject, I’ve compiled below a list of additional articles I’ve written about the subject of Chinese foreign direct investment and the opportunity it presents for lawyers:

January 3, 2014: Why California law firms should focus on China investors to win new business

September 10, 2013: As China’s investment into the US expands, the opportunity for US lawyers grows

December 25, 2012: Upcoming US-China Legal Summit highlights immense opportunity for US law firms

October 14, 2012: China, Japan, fuel growth in international energy mergers and acquisitions

February 12, 2014: Global FDI up 11% in 2013: There’s new legal work in those figures

February 12, 2013:  Chinese companies – in rapid overseas expansion – need expert guidance

January 4, 2013: US and Chinese law firms, seeking overseas business, form marketing tie-ups

July 29, 2012: US law firms: Why now is a good time to build a Chinese client base

John Grimley helps law firms, law firm practice groups, individual lawyers, financial services and governmental relations professionals develop and implement custom business development initiatives. If you would like to discuss how he might help your law firm build a client base around Chinese foreign direct investment, please contact him at Tel: +1.213.814.2855 or at Email: jg@jgrimley.com or on Skype at: JohnGrimley