I believe there are several attractive value propositions for mid-size firms, but they need to be sold well and with confidence.
Taking the confidence issue first – partners in mid-size firms too easily see themselves losing work to the bigger firms because they can seem inferior in terms of any of the following:
- Size of teams
- Brand reputation (position in league tables in legal directories, such as Chambers)
- Global presence (ie number of offices in different jurisdictions)
They can easily see themselves losing work to the smaller niche firms because they can seem inferior in terms of:
- Commitment to specialising in a sector (eg construction, employment etc)
- Expense (higher costs for running the firm, so higher charge out rates)
Mid-size firms can easily be seen as neither one thing nor the other. So what should they do to compete?
- Compete for the right type of work. To build a sustainable practice, mid-size firms need to find the type of work that they are best suited for. This is an obvious point but many firms get distracted and tempted to go for an unsustainable stream of work from flagship or trophy clients. The focus for mid-size firms should be
- Second string work for large companies
- The main advisers to mid-size corporates
- Larger local businesses
2. Focus more of your selling efforts on assessing the criteria the prospective client is using to select their advisers. There might be several individuals who might have a say about the appointment. Try not to ignore any of them.
If you don’t know the criteria – and many clients might not know their criteria consciously, they just know what’s right when they see it – you’ll need to ask them. Ask them what’s important to them. It might help to ask them what isn’t important to them. Try to establish any weighting for the factors – what might be more important than other factors. Some things might be essential. Other things might just be ‘nice to have’.
3. Honestly appraise your standing vs the rival firms. If you don’t know who you’re up against, assume it’s the worst case scenario – the firm you wouldn’t want to be competing against. Simply score yourself H, M or L (for High, Medium, Low) against each criterion.
Global elite firms tend to be graded high on reputation but potentially lower on cost and partner attention. Niche firms tend to score well on industry knowledge and value-for-money, but might be seen as weak on breadth of services (eg can they provide pension advice if needed?).
4. Now you have two choices:
- Influence the client to change their criteria – this sounds tricky, but it’s highly appropriate, particularly when clients might not know what they need as well as you do. After all, you do this work for a living and have probably completed several similar transactions.
- Influence the client to change their perception of your firm’s standing. For example, you may have more relevant experience in a related field than they realise.
Here’s an example of how this approach can work. I worked on a pitch for a mid-size firm competing for the legal work on a finance and construction project on a private motorway in a particular Central Europe jurisdiction. The client seemed to want firms who had experience in private motorways and who had an office in the particular jurisdiction.
It seemed a tall order to win this work – we didn’t have an office there and had zero experience in private motorway projects. Yet we won the work. How? We convinced the client of two things:
- That our extensive experience in other major infrastructure projects (eg ports, bridges etc) in other Central Europe jurisdictions was useful and relevant
- That by not having an office in the jurisdiction but a relationship with the best local firm, the client would have advantages in dealing with local regulatory and planning aspects.
Another example was when I pitched for a project and boldly asserted that I hadn’t done the kind of project before – the benefit to the client (who had used experienced consultants before and failed) was that they’d get a fresh and creative approach. They chose me!
The other advantage that mid-size firms have and many clients want, is the combination of talent and experience with a passion for striving to provide excellent client service. Having fewer big clients than the global elite firms, a mid-size firm should be making each of them feel loved. And if you can find a way to communicate this better, client instructions will follow.