By Patrick J. McKenna
Many, if not most, of the complex situations for which clients employ professional firms are inherently multidisciplinary. For example, if I am going to build a new commercial real estate park, I am likely to need expert advice on law, finance, tax, economics, engineering, environmental considerations and a whole host of additional disciplines.
Meanwhile, according to a report by LexisNexis Legal & Professional, the Big Four accounting firms are cornering the market of solutions, rather than advice. “Our strategy is very much rooted in the needs of the client to be offered solutions and not just advice,” says Emily Foges, Lead Partner for Legal Managed Services at Deloitte. “The vision for Deloitte Legal has always been that you bring together high-quality legal advice with legal management consulting, legal managed services and legal technology. This way you can provide a complete end-to-end service to the client and achieve the outcomes they are looking for, not just give them advice on those outcomes.”
Over the course of working with the leader and members of a number of Industry Groups wherein we are discussing and exploring the team’s future growth strategies, amongst a deliberate sequence of questions that I’ve posed, includes this one:
“Please identify those non-legal service providers that our current clients have often needed the hands-on assistance of, in order for them to obtain a total turnkey solution.
In other words, while working with our clients, who are the usual complimentary professional service providers that we most often have to collaborate with?”
Now together we will usually develop a catalogue of at least a dozen different professional service providers from economists and forensic investigators to data analysts and accountants; from reputational management and crisis counsellors to private investigators and lobbyists – the list goes on and on. These are often professionals who have a track record in understanding our industry client’s needs, priorities and possess a complimentary relationship with the particular client that we too are currently serving. It is rare that your larger industry client’s needs can be fully addressed by simply providing them with legal services; so, the question then becomes – would we rather be just one of their valued providers, or could we be their “General Contractor.”
Now if you have ever experienced having some major home renovations done, you may remember a point at which you needed to either find the best interior designers, carpenters, painters, plumbers and electricians or find someone sufficiently experienced to take responsibility for managing the entire renovation, providing you with a single point of direction and accountability. Now if you are the client, which would you rather do?
Being experts in a particular industry should allow you to take control over the ultimate outcome for your client – because most of these clients are far less interested in simply getting a legal problem addressed (finding a competent plumber) than they are in obtaining a total business solution (finding a trusted General Contractor).
And today, more law firms are beginning to look at developing multidisciplinary practices or at least pretending to do so. I say “pretending” because far too often this is what I witness being hyped on some firm’s website:
Our practice areas include business services, litigation, trusts and estates, healthcare, construction, real estate, employment and labor, intellectual property, and employee benefits law, allowing us to serve a full range of legal needs with multidisciplinary industry teams.
Sorry, the client is not fooled! Practice groups are NOT industry groups, and a collection of lawyers all practicing in different disciplines does NOT constitute a true multidisciplinary entity. Thankfully, a small group of pioneering firms have realized the market benefit and differentiation appeal in initiating real multidisciplinary industry teams (what I will call MITs) comprised of lawyers and other aligned professionals, most often housed in a law firm subsidiary operation.
I am told that there is an historical precedent wherein this form of practice became common where lawyers, financial professionals, and therapist/coaches used the "Collaborative Divorce" model to create multi-professional teams. What I’m talking about here is where lawyer and nonlawyer professionals work on client matters together and are collaborating principals within the same firm.
SOME PIONEERING EXAMPLES
BlueRock is a multidisciplinary entrepreneurial advisory firm that helps people to operate and grow successful businesses and achieve their personal goals.
“For Your Business:Industry expertise and real-world experience to grow your business.”
The BlueRock community is a highly qualified team of entrepreneurial experts who push the boundaries of accounting, digital, law, private wealth, finance, general insurance, grants and incentives and SMSF. Our experienced and energetic people channel this passion to help entrepreneurs and business owners grow ideas into ‘WOW’ businesses by providing them with everything they need to succeed — from accounting and legal advice to data insights and digital marketing.
Whether it’s financing a new venture, insuring a property, creating a lease agreement, building an e-commerce website or all of the above, our whole team of specialists works together with you to get exceptional business outcomes. Formed over 10 years ago, BlueRock has grown to become an exciting and successful entrepreneurial community.
Manatt Phelps & Phillips has spent more than 10 years building their Manatt Health multidisciplinary practice, which Chambers and Partners calls “unique,” with an eye toward upending the competition among health care legal services providers. Their team is comprised of about 70 consultants and 90 lawyers which often contract with C-suites and boardrooms to provide business advisory, financial, information technology, data analytics and clinical support.
Manatt Phelps’ investment in this multidisciplinary team is a bet that health care providers, in a period of profound change, need more than strictly legal advice. They also need strategy help as they reconfigure their business from a fee-for-services model to a value-based payment system. About 70 percent of the unit’s work is handled on a project-billed basis, rather than the billable hour.
As one might imagine, having lawyers and consultants work on a level playing field can be challenging. The leader of Manatt Phelps’ health care group reports that the two types of professionals work well together because the firm applies the same compensation system for both; management decisions for the group are also made by both lawyers and consultants; and when people actually work together on projects, see the skills that each have and the synergy that can be created, they get excited about working with each other.
One of the recent additions to Manatt Health was former CEO of University of Pennsylvania Health System for 16 years, who told interviewers that while he received offers from several different organizations and while he is not a lawyer, it made sense for the type of work he does to be linked to a law firm, given the extensive regulatory considerations involved in health care governance, management and strategy.
At Manatt, it all started in the health care area, but the firm is now expanding their multidisciplinary strategy into their privacy and security and governmental practice, as well as exploring opportunities to do so in financial services.
[Manatt is very much my favored example of what can be accomplished with an industry focus]
Comprised of seasoned consultants, technologists, lawyers and project managers, A&O Consulting focuses on advising business leaders on governance, corporate purpose and culture, conduct, compliance and operational risk, regulatory advisory and business transformation.
The professionals at A&O Consulting have worked on a range of mandates in relation to Brexit implementation, focused primarily on designing proportionate and effective governance frameworks for new corporate entities, supporting senior management in understanding additional local responsibilities, as well as designing AML and culture and conduct capabilities including in respect of training tools and risk assessment frameworks.
The group has also developed proprietary products like their Culture Benchmarking Tool – designed to help clients understand their current cultural landscape and how their values might drive employee behavior. It also helps employees navigate challenging everyday scenarios in an ever-changing workplace.
FROM THE CLIENT’S PERSPECTIVE
It is time for our legal profession to view things from the client’s perspective. Legal delivery is entering an era wherein the ability to identify and manage problems before they metastasize is becoming paramount. This is emblematic of a market shift that favors firms that provide a total business solution, something which becomes far easier when you have an industry focus.
Differentiated legal services are of growing significance and highly valued –
but the clients not lawyers, determine what is
An old friend, Michael Roster, a former Office Managing Partner at Morrison & Foerster and then General Counsel at Stanford University, talks about a discussion he had with the CEO of a major food processor in Europe when he asked what the company was doing about its legal costs. He reported:
“He told me about an MDP that provides a comprehensive service at a fixed price. This entity largely doesn’t advise his managers but instead performs the functions directly. For example, they write his company’s employment and health and safety manuals; they up their many other clients and their interactions with regulators; they train his senior people as well as the workforce; and they regularly audit for compliance. Oh yeah, and if we get sued, which almost never happens anymore, they have lawyers who handle it.”
My friend in the UK loved the fact that what once was a major uncertainty in his annual budget – the costs of compliance and disputes – was now a fixed line item. It also was a huge benefit that the few disputes that now arose internally or with his regulators were quickly resolved and that he and his management team could instead focus on running the company. If you think about it, the MDP is able to directly solve problems, something we lawyers aren’t authorized to do. Put more starkly, the MDP has the authority and expertise to be proactive, not simply reactive.”
What Your Client Wants Assurances Of:
A true Multidisciplinary Industry Team is a group of diverse professionals who specialize in different, but highly complimentary disciplines. This must not be about cross-selling different services for different phases of the client’s assignment. In a typical law firm organized around distinct practice areas, the ability to coordinate people in different silos becomes challenging. But when you have professionals all coalesced and dedicated to serving the same industry the effort becomes more unified. Each professional on the MIT is responsible for the provision of services in the specific area in which they specialize. Nevertheless, your client will still need comfort that:
You understand me and my business problems at a deeper level
As the relationship partner coordinating a group of diverse professionals, you need to understand my needs better than anyone else and position my problem at the center of your team’s efforts. Focus on “what it is that I am trying to achieve” rather than seeing this as a narrow piece of advice that is being required. To that end, I expect you to be sensitive to the way I want things to be done, how I want to be communicated with, what my idiosyncratic preferences might be, and what kind of project reporting I would like to have.
I see you as my representative with the rest of your MIT and I expect you to represent ONLY my interests in any of your dealings. Since your job is to represent the totality of the project, I require you to demonstrate both a big picture perspective (understanding my business goals and my priorities) and also have an obsessive attention to detail.
You provide evidence of service coordination
To be persuasive you need to provide concrete evidence that your team has a common language across the different disciplines, consistent work ethic, high standards and that you can get the best out of everyone on the team. Because the professional services required are coordinated together, there needs to be evidence of a framework of uniformity provided to each client that improves service delivery.
In other words, I will be particularly impressed if you can show me the technology you utilize for communications, project management and cost control.
You give me comfort that you truly are able to manage complex assignments
I need to have confidence that you have done this before, that you already have systems in place and that you are coordinating, integrating, supervising and managing the various disciplines involved – and working with colleagues who have worked together before and that are not strangers to one another.
I expect you to know the capabilities of each professional on the team, matching their strengths to the work they do for me and encouraging collaboration. Even if some members of this MIT are halfway around the globe from us, the communication that happens in this structure must make service coordination easier.
You have operational control
An MIT should allow me as the client to receive collaborative support from a wide range of experts. Each professional contributes from their own perspective, which can then enhance the results which are offered by others.
Nevertheless, as the client I want to know that you actually have operational and quality control over the work and contributions of the other experts. I want to know that you are actually able to assess the work of some professional who is a specialist in some area where you have limited experience. Your primary task is to manage the matter and all of the various professionals involved. And as the client, I am not so much concerned that you be ‘task oriented’ as I am that you be ‘outcome oriented’ in fixating over the accomplishment of my goals.
You provide reassurance
I expect you to keep me informed at all times with up-to-date information regarding what is on track, and what is not. You should involve me in the decision making no matter what area of expertise and consult me before embarking on any significant action. I expect that everything will be properly documented so that I am kept up-to-date on everything that is going on.
And if there is a problem, unforeseen complication or setback you will advise of what has transpired, what my options might be and what you and your team recommend that we do. I need wise counsel, not only at the beginning of our matter, but all the way through.
Clients want their lawyers to be more like active business partners – to understand how their industry is being disrupted, how their market is changing and the resulting pressures on their continued prosperity. All of the research that I have examined clearly provides evidence that:
• the primary challenges in today’s global economy are rarely purely “legal” or business” problems, but rather a sticky amalgamation of both;
• clients want the ability to access specialized answers and solutions under one roof, and it makes sense to consider more than one professional viewpoint when trying to resolve a complex problem;
• the delivery of multiple professional services through a single entity can achieve costs savings, comprehensive and higher quality advice, with greater speed;
• multidisciplinary arrangements and perspectives may proactively address problems that clients previously did not even know existed; and
• diverse professionals working and collaborating together in unity, are far more capable of creating new and innovative solutions.
If your firm continues to view your client’s various problems from only a lawyer centric lens and fails to view these problems from a more diverse and multidisciplined lens, you run the risk of continuing to work in silos, bemoaning how difficult it is to cross-sell. Now is the time for you to rethink how law is practiced and to consider whether your clients could be served far better if their particular issues or problems were viewed under the lens of needing a business solution and not just legal advice.
About the Author
Patrick is an internationally recognized author, lecturer, strategist and seasoned advisor to the leaders of premier law firms; having had the honor of working with at least one of the largest firms in over a dozen different countries.
He is the author/co-author of 11 books most notably his international business best seller, First Among Equals (co-authored with David Maister), currently in its sixth printing and translated into nine languages. His two newest e-books, The Art of Leadership Succession and Strategy Innovation: Getting to The Future First (Legal Business World Publishing)) were released in 2019.
He proudly serves as a non-executive director (NED) or advisory board member with a variety of professional service firms and incorporated companies. His aim is to instigate innovation, provide independent strategic insight drawn from his years of experience, and support effective governance.
His three decades of experience led to his being the subject of a Harvard Law School Case Study entitled: "Innovations in Legal Consulting" and he is the recipient of an honorary fellowship from Leaders Excellence of Harvard Square.