Rainmaker or Hostage Taker?

Despite a surge in articles, blogs and white papers that focus on top trends in law firm business development and management, few have explored critical changes taking place within law firm management, particularly as they relate to the concept of the rainmaker.

Historically, rainmakers ' whether internally culturally compatible or not ' have achieved a storied reverence and extraordinary compensation leverage within law firms due to the significance of revenue-generating contributions associated with “their” clients.

The rainmaker concept is a tradition at law firms, but since 2000, game-changing trends have shaken the traditional law firm business model, driving a re-examination of once-hallowed concepts. Among others, these game changers include Business Process Outsourcing, Legal Talent Outsourcing and Legal Process Outsourcing. Additionally, the development and spread of social media and client-driven requests for proposal procurement practices continue to push the pace of change.

But although there has been a marked focus on marketing around a firm's organization, there has been a lack of sufficient investigation into organizing around a firm's markets. Significant issues associated with that concept include law firm brand-positioning strategies. The issues also encompass the study of detailed articulations of brand culture processes that reward externally driven and client-focused service, such as new business and client relationship-management processes that institutionalize client relationships and broaden the sphere of personnel interaction between firm and client.

This is important, because financial security for lawyers of all levels ' including non-lawyer professionals and staff alike ' has been greatly dependent on the productive talents of firm rainmakers. Although there is no question about the historical benefit of these relationships, there is another side to the traditional rainmaker culture.

Transition to A Broader Structure

Amid those trends, one aspect that has been virtually ignored is the transition from a traditional, independent “rainmaker” client management structure to a broader structure based on an institutional-team model. To date, rainmakers have often been independent, self-interested individuals with non-collaborative “give me” characteristics. As such, they may be as much of a threat to a firm as they are an asset.

We have seen this phenomenon accelerate during the past decade as convergence perpetuates a free-agency market for rainmakers, elevating them to a highly sought lateral candidate status among competitive firms. Further, the potential loss of firm revenues and market status that accompanies a rainmaker's move from one firm to another means that concern over shifts within rainmaker ranks has never been higher.

Despite the continuing competitive pressures that characterize law firms, few are adequately prepared to manage rainmaker assets, even when they turn into “hostage-taking” liabilities. At stake is lost revenue, and the potential loss of key lawyers, paraprofessionals and other talent.

But instead of maintaining a passive stance, law firms may wish to consider implementing aggressive due-diligence processes when it comes to their rainmaker-based client relationships. With the proven benefits associated with institutionalized firm client relationships, firms could consider processes and incentives for enhancing rainmaker loyalty to their firm, while also promoting greater team-focused intra-firm collaboration and institutionalized client interaction.

Seven Steps

Now more than ever, law firms need to capitalize on the loyal asset value and collaborative leadership of their top-performing lawyers, ensuring they remain rainmakers instead of hostage-takers.

This does not have to be a daunting task, and it can begin with seven specific steps:

1. Identify the top-10 clients that hold the most significant lifetime value to the firm from a perspective of revenue generation and return on investment. Once completed, this analysis should be extended, on a prioritized basis, to all clients of the firm.
2. Initiate a comprehensive audit to identify points of contact between firm personnel and clients; and determine the level of satisfaction at all points.
3. Determine the level of collaborative culture within the firm, relative to the management of the client's business.
4. Profile each client based on their business-process practices, and their position within the industries they serve, focusing on the following attributes: a.) Trends; b.) Challenges facing their business; c.) Challenges facing their industry; d.) Competitor firms that also serve the client's legal and business needs; and e.) Practice areas being served by competing firms.
5. Identify areas of opportunity for improving the delivery of services to the client, as well as areas of growth for the firm.
6. Encourage collaborative engagement by the lead attorney as he or she services the client.
7. Encourage collaborative engagement with the client in the management of their legal and business needs.

Conclusion

Engaging a focus like this will not be simple, and it will undoubtedly require the significant utilization of firm resources. But a genuine commitment to this strategy has the potential to yield significant monetary and non-monetary benefits to the firm and to all the parties involved, and may result in an important shift from a hostage-taking situation to one in which a true partnership emerges.

Richard L. Upton, a management consultant, has provided marketing and change-management services to major law firms for more than 14 years, following a 23-year career in advertising and marketing. His consulting firm, UPTONGROUP, based in Richmond, VA, works with corporations and their law firms to structure productive, cost-effective relationships.

Despite a surge in articles, blogs and white papers that focus on top trends in law firm business development and management, few have explored critical changes taking place within law firm management, particularly as they relate to the concept of the rainmaker.

Historically, rainmakers ' whether internally culturally compatible or not ' have achieved a storied reverence and extraordinary compensation leverage within law firms due to the significance of revenue-generating contributions associated with “their” clients.

The rainmaker concept is a tradition at law firms, but since 2000, game-changing trends have shaken the traditional law firm business model, driving a re-examination of once-hallowed concepts. Among others, these game changers include Business Process Outsourcing, Legal Talent Outsourcing and Legal Process Outsourcing. Additionally, the development and spread of social media and client-driven requests for proposal procurement practices continue to push the pace of change.

But although there has been a marked focus on marketing around a firm's organization, there has been a lack of sufficient investigation into organizing around a firm's markets. Significant issues associated with that concept include law firm brand-positioning strategies. The issues also encompass the study of detailed articulations of brand culture processes that reward externally driven and client-focused service, such as new business and client relationship-management processes that institutionalize client relationships and broaden the sphere of personnel interaction between firm and client.

This is important, because financial security for lawyers of all levels ' including non-lawyer professionals and staff alike ' has been greatly dependent on the productive talents of firm rainmakers. Although there is no question about the historical benefit of these relationships, there is another side to the traditional rainmaker culture.

Transition to A Broader Structure

Amid those trends, one aspect that has been virtually ignored is the transition from a traditional, independent “rainmaker” client management structure to a broader structure based on an institutional-team model. To date, rainmakers have often been independent, self-interested individuals with non-collaborative “give me” characteristics. As such, they may be as much of a threat to a firm as they are an asset.

We have seen this phenomenon accelerate during the past decade as convergence perpetuates a free-agency market for rainmakers, elevating them to a highly sought lateral candidate status among competitive firms. Further, the potential loss of firm revenues and market status that accompanies a rainmaker's move from one firm to another means that concern over shifts within rainmaker ranks has never been higher.

Despite the continuing competitive pressures that characterize law firms, few are adequately prepared to manage rainmaker assets, even when they turn into “hostage-taking” liabilities. At stake is lost revenue, and the potential loss of key lawyers, paraprofessionals and other talent.

But instead of maintaining a passive stance, law firms may wish to consider implementing aggressive due-diligence processes when it comes to their rainmaker-based client relationships. With the proven benefits associated with institutionalized firm client relationships, firms could consider processes and incentives for enhancing rainmaker loyalty to their firm, while also promoting greater team-focused intra-firm collaboration and institutionalized client interaction.

Seven Steps

Now more than ever, law firms need to capitalize on the loyal asset value and collaborative leadership of their top-performing lawyers, ensuring they remain rainmakers instead of hostage-takers.

This does not have to be a daunting task, and it can begin with seven specific steps:

1. Identify the top-10 clients that hold the most significant lifetime value to the firm from a perspective of revenue generation and return on investment. Once completed, this analysis should be extended, on a prioritized basis, to all clients of the firm.
2. Initiate a comprehensive audit to identify points of contact between firm personnel and clients; and determine the level of satisfaction at all points.
3. Determine the level of collaborative culture within the firm, relative to the management of the client's business.
4. Profile each client based on their business-process practices, and their position within the industries they serve, focusing on the following attributes: a.) Trends; b.) Challenges facing their business; c.) Challenges facing their industry; d.) Competitor firms that also serve the client's legal and business needs; and e.) Practice areas being served by competing firms.
5. Identify areas of opportunity for improving the delivery of services to the client, as well as areas of growth for the firm.
6. Encourage collaborative engagement by the lead attorney as he or she services the client.
7. Encourage collaborative engagement with the client in the management of their legal and business needs.

Conclusion

Engaging a focus like this will not be simple, and it will undoubtedly require the significant utilization of firm resources. But a genuine commitment to this strategy has the potential to yield significant monetary and non-monetary benefits to the firm and to all the parties involved, and may result in an important shift from a hostage-taking situation to one in which a true partnership emerges.

Richard L. Upton, a management consultant, has provided marketing and change-management services to major law firms for more than 14 years, following a 23-year career in advertising and marketing. His consulting firm, UPTONGROUP, based in Richmond, VA, works with corporations and their law firms to structure productive, cost-effective relationships.