Now More Than Ever, IP Practitioners Need to Be Better Business Partners

If you’ve worked in-house, you’ve probably been told at some point to “do more with less.” Initially a response to the Great Recession, business scrutiny over legal budgets persists: according to a recent survey of general counsels performed by EY and Harvard Law, GCs expect 25% greater workloads in the next three years while 88% of them plan simultaneous budget cuts.

At the same time, research also shows that legal productivity is stagnating. Eighty-one percent of GCs surveyed by Gartner reported legal cost as a percent of company revenue increased or stayed the same during the past two years. These trends obviously put practitioners in a tough spot: how do you deliver on your value proposition while workloads are increasing, resources are constrained, and productivity is stagnating?

And what does the vague directive to “do more with less” even mean? Some GCs surveyed by EY are looking to technology or process optimization to achieve cost savings, while others look to more tried-and-true methods that target outside counsel through insourcing, rate reductions, and vendor consolidation.

As the popular sales adage goes: never lower your price, always increase your value. Focusing purely on cost containment, while overlooking ways to increase value, adopts an outdated view of Legal (as a cost center instead of revenue generator), can lead to counter-productive results (for example, obtaining lower hourly billing rates that end up generating higher annual spend due to inefficient staffing), and risks eroding the collaboration between in-house and outside counsel.

Instead, both in-house and outside counsel should first increase the value they provide to the organization. One way they can do this is by becoming better business partners.

You Know it When You Don’t See It

Business partnering, like most corporate jargon, lacks a clear definition. But you know it when you see it. And you know it when you don’t see it. Like the time the medical director of a Fortune 100 global pharmaceutical company told me his new brand attorney asked to reschedule their weekly brand meeting, which about 50 people attended, because it didn’t work well with her schedule. It’s no surprise internal customer satisfaction surveys often report perceptions of lawyers as arrogant.

Or the countless times outside trademark counsel asked me over the years for cut-and-paste lists of items like “customer lists” or “awards and accolades”, despite their irrelevance to the pharmaceutical industry, where customers (prescribing physicians) differed from end users (patients) and branded communications are highly restricted and regulated.

Many other in-house practitioners already business partner quite well. One way they do this is by embedding themselves within the departments they serve. They may sit alongside their internal clients, sometimes even drawing their salaries from their clients’ departmental budgets. They aim to “get a seat at the table” as early as possible and understand that doing so will enable them to shape business strategy and influence business behavior in ways that deepen client relationships. They also understand that working side-by-side with clients can change how they are perceived: from obstacle to partner.

After spending years focusing on business partnering, in-house counsel now expect the same from outside counsel. Many fail to meet those expectations. According to recent research by Deloitte, one in three legal services purchasers want law firms to bring industry, commercial, and non-legal expertise to the engagement, which they currently do not. Law firms, Deloitte points out, seem to be trailing other professional services firm in this respect.

Implicit Knowledge

Some outside counsel are more progressive than others, supplying associates at discounted rates to in-house clients while in-house attorneys are out on parental leave. In Europe, where parental leave can be a year, this approach presents a clear a win-win: firms deepen client ties as associates join their in-house colleagues for lunch in the cafeteria and holiday parties while simultaneously developing associate commercial acumen. And even in the United States, where many organizations are responding to a tight labor market by extending parental leave policies, secondments are a great way for outside counsel to gain critical insights into organizational culture, politics, and risk tolerance.

It’s exactly this type of implicit knowledge that’s been found to drive successful collaboration and performance. For example, surgeons who performed more surgeries at one hospital over another produced better outcomes at the higher-volume hospital, leading researchers to attribute their superior outcomes to implicit knowledge gained from spending more time with the operating team at the higher-volume hospital (nurses, anesthesiologists, etc.). This implicit knowledge might inform them, for example, that the nurses didn’t speak up often, but if they did, it meant something was seriously wrong.

Within a legal context, seconded associates might learn implicit knowledge about in-house counsel billing preferences (do they prefer work pushed down to junior associates to manage costs or do they perceive it as funding attorney training?) or budgeting procedures (do business units pay for outside counsel or does the Legal Department?). This type of information is invaluable for outside counsel. It removes friction from the relationship while making it “stickier” from a business development point of view.

Another way to acquire industry experience is by recruiting attorneys from in-house legal departments. Returning to my pharmaceutical example, a former pharmaceutical attorney could have asked for “script counts” instead of “customer lists” and “leave-behinds” (materials distributed to physicians by sales reps) instead of “accolades.”

Quick Wins

Investing in secondments, hiring lawyers with industry experience, engaging in commercial training—these are all great ways to build business partnering skillsets and expertise, but they take time and may not be realistic strategies for smaller firms. Practitioners should also focus on quick wins along the way.

Consider the way you approach clients. Effective business partnering requires a sense of humility and commitment to the team (“there’s no I in team”), both qualities that some lawyers can improve. The same medical director who complained to me about his brand attorney also told me about a time when the organization was transitioning to an open-plan office. Legal was the only function to successfully lobby for individual offices, on the grounds that they required privacy to maintain confidentiality. Open plan offices contain “quiet rooms” for a reason. Now consider the message this sent to their internal clients: we are a function that is inaccessible to you; our operations are not transparent; we are not your equal.

Also, reconsider the way you communicate with your clients. In some industries, PowerPoint is the preferred method for conveying information. Emails longer than a couple of paragraphs will simply go unread. For transactional projects, I create slides containing project timelines, workstreams, and process mapping. Clients love it. Using PowerPoint is an easy way to distinguish yourself from other service providers, as are basic project management principles.

Self-study is another way to gain industry familiarity. Understanding an industry and developing the ability to toggle between the languages of business and law earns the trust of clients, colleagues, and management, necessary to deliver value that is hard to replicate.

Start by reading what your clients read. If they’re in the pharmaceutical space, do you subscribe to popular industry blogs like Fierce Pharma. If they’re B2B marketers, do you read Marketing Profs? If they’re startups, do you know what terminology like “MVP” means? Do you listen to podcasts like The Tim Ferriss Show? Firms need to start prioritizing business partnering development and should consider allowing associates to devote time spent on business partnering development towards their non-billable targets.

Nurture the Relationship

To penetrate market share and renew engagements, firms must keep customers engaged and satisfied throughout their experience journey; winning the RFP or landing on the “preferred provider” list is only the beginning. Quite often, it’s the relationship that’s for sale. How the client feels drives the engagement, creates heritage relationships, and successfully wins business buy-in. Does the client feel understood? Do they believe they are receiving personalized, relevant services? Effective business partnering can help practitioners on both sides of the aisle meet, and exceed, these expectations.

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