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 work 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

How to create an effective international bilateral law firm marketing alliance

A recent article in The Lawyer highlights the potential attractiveness – as well as pitfalls — of international bilateral law firm marketing alliances.  In particular, The Lawyer highlights a recent effort by UK law firm Bird & Bird and South Korean law firm Hwang Mok Park (HMP) to create an effective tie-up.  The logic for such a tie-up is clear: “[South Korea's increasing importance as a source of outbound investment] and a legal services market that is opening up to the west.” as The Lawyer outlines.

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Importantly, as The Lawyer highlights, many of these efforts fail

“It is a well-known fact, Yun Kriegler writes, “that making strategic alliances work can sometimes not be a very a smooth sail, not least because in the long-term there is no aligned economic interest.” For example, Kriegler cites a decade long joint venture between Linklaters and Singapore’s Allen & Gledhill which fell apart.

The Bird & Bird/HMP tie up seeks to buck the propensity for these alliance efforts to fail.  “We’ve learned our hard lessons at the beginning with our alliances in Europe. But now we know well how to make these relationship work,” Bird & Bird CEO David Kerr told Kriegler.

According to The Lawyer, citing firm leaders in both firms, the key characteristics of the Bird & Bird/HMP alliance include:

  • A cooperation agreement that is neither a profit-sharing arrangement nor an exclusive strategic alliance.
  • The deal didn’t require regulatory approval.
  • Low risk, cost-effective and practical
  • Bird & Bird has been working with HMP for a decade on Korea-related matters

All these characteristics are helpful for the Bird& Bird./HMP Alliance, However, they’re not enough nor are they the most important elements necessary to create a successful law firm marketing alliance. There are other, more essential components which are required for these tie-ups to work.  They include:

  • In order to effectively build an effective marketing tie-up with another firm, it is not enough to simply establish a relationship and “hope” your new partner refers business to you (however attractive the tie-up may appear in theory).  Both firms must take a proactive approach to business development as a part of their firm culture and the joint alliance business development efforts in particular.
  • Both firms must commit to regularly identifying and pursuing outstanding leads they are developing for one another.  In order to do this most effectively, large international firms need to have internal staff in place capable of performing all these tasks (from research and identification to pursuit and capture of new business – whether from existing or new potential clients.  Both efforts are unique and staffing each requires understanding which skills sets are essential to the roles.  Putting a practicing partner in charge of managing this effort is a recipe for failure).
  • An effort must be put in place to regularly identify and review new leads and discuss what specific opportunities exist in your respective markets – so as to help your alliance counterparts narrowly focus on who they should be contacting (existing clients/new potential clients) in their jurisdiction on your behalf.
  • Finally, following-up during the entire business development process must be done with any new lead generated.  Without sufficient follow-up, the purpose for establishing the alliance will be defeated.

Proactive, precise and informed efforts required for success

As The Lawyer reported: Bird & Bird’s CEO David Kerr [believes] the Bird & Bird/HMP tie-up is a “low risk, cost-effective and practical cooperative agreement approach [and] is the best way forward in Asia.”  A key market for the firm.  Bird & Bird and HMP, based on their previous relationship, have created a solid foundation for generating new work from the relationship.  However, in order to maximize the revenue potential from this and other similar relationships, a proactive effort staffed with highly capable business development professionals characterized by consistent, informed follow up – is an absolute requirement.

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 to develop an effective sales function in a law firm

Jeff Berardi, Chief Marketing Officer for global law firm K&L Gates, wrote a very thoughtful and thought-provoking piece about developing an effective sales function in a law firm – which was published today in JD Supra.

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Mr Berardi wrote that “lately [he's] noticed that there has been a lot of talk about the creation of true sales functions within law firms.”  He wrote that he’d “like to caution the legal industry about possibly having a knee-jerk reaction to the latest business development trend du jour, perhaps in response to the serious and ongoing challenges of a global market that has produced flat or lower demand for legal services in recent years.” He provided “some general thoughts about the development of a sales function within a law firm, which include some concerns [he has] considered and confronted over the years in [his] role as the head of marketing and business development for a large, globally integrated law firm.”

Berardi outlined four key concerns, which I will enumerate below.  With each — I’ll seek to provide the best answers I can which I hope will assist in the understanding of how law firm sales can be effectively established and nurtured within a law firm.

1. Incentives and Rewards

Berardi outlines that “In order to develop a sales function within an organization, you must be able to properly incentivize and reward salespeople. This holds true for the field of law just as it would for companies in other industries. Herein lies the first, and perhaps most challenging, hurdle to overcome.”  Berardi cities the time and complexity involved in the sales process.  Often long and involving many – he indicates it can be hard to determine how to compensate law firm sales people effectively.

My response to this concern would be that a law firm sales function is a long-term strategic decision a firm makes.  It therefore isn’t a role where a short-term commission structure is the best system to put in place for the role.  Instead I’d argue – view and compensate the “sales people” (for lack of a better way to put it) as sophisticated practitioners akin to hybrid lawyers/business developers.  I enumerate the ideal characteristics of the role here.  These hybrid professionals can be compensated effectively by salary (if an employee) or retainer (if independent consultant) – and payed an annual bonus, reflective of the firms appreciation of their contribution and reflecting business generated – as determined by firm management.  There are a variety of permutations compensation can take.  However flexibility and flux in remuneration – isn’t something that would be alien to a person in this role.  Law firms can view the role and those who fill it – accurately – as flexible, open-minded, driven and capable.  They’ll therefore be open to creative solutions.

2. The Perils of Creating an Intermediary

Berardi outline his experience as reflecting that “some clients would find it odd and off-putting to be contacted by a salesperson, or to have such a person in a meeting with a law firm under consideration. Will that perception change in the future? Perhaps, but I do know that at the moment it isn’t a generally accepted practice by clients or by law firm lawyers.”

I would argue that it depends on who is the salesperson.  I have argued before and state now – that the ideal salesperson in a law firm is a hybrid lawyer/business developer.  Capable of sales yes, but also highly adept at digesting large amounts of actionable intelligence about the subject matter expertise the firm maintains, and then capable of translating that expertise into language clients understand and deem valuable as a means by which they can retain the firm to achieve their objectives.  This takes gravitas, tenacity, high levels of creativity — and diplomacy.  Clients in my experience are less concerned about who the person is that’s contacting them – but rather the message that’s being conveyed and how it’s conveyed.  Done well, it would I suggest address Mr Berardi’s well stated concerns.

3. The Shift Away from Marketing/Branding

Berardi writes that “it is important to maintain an appropriate balance between the support of both marketing and business development activities. One is not more important than the other. I agree.  Both can work very well together.  Today however marketing is the far and away predominant means by which law firms seek to generate new revenue.  Precious few firms utilize sales pipelines.  Properly integrated with marketing efforts – they can make a monstrous difference in how much top-line revenue is generated for a firm year-on-year.

4. Changing the Culture

Berardi argues that “some forms of radical change can consist of such a shock to the system that the organization cannot thrive or ultimately be successful.”  I wholeheartedly agree.  I believe strongly that a sales function in a law firm can become a veritable invisible presence.  The “salespeople” operate in the background like sophisticated political aides.  Always ensuring their clients (the firm lawyers themselves) are the prime focus of the client-facing effort.  When one teams subject matter experts with discreet, efficient, adept, diplomatic and loyal salespeople – the firm culture will change imperceptibly by the presence of the salesforce – whose focus will be service – not stardom.

Conclusion

Jeff Berardi’s observations about how a sales function might be integrated into a law firm are very well taken.  I’ve sought here to provide a brief overview of my thoughts on the subject, having myself operated an overseas sales pipeline for the greater part of a decade for an AmLaw 100 law firm – and now operating outside cross-border focused pipelines for large and small law firms.  A sales pipeline can in fact be integrated into a law firm of any size, taking into account each firms unique and often delicate culture.  Indeed, a law firm sales pipeline, operated highly effectively, can not only provide a firm with a source of new revenue – but also act as a long-term strategic balancing element in an annual revenue focused industry.

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.