Post #941

Women Business Owners and the Industries They Favor.

Something that surprises me is the large amount of attention devoted to diversity accompanied by the small number of law firms that have a Women-Owned Businesses Practice. Meanwhile, accounting firms, like Ernst & Young, helps women-owned businesses with $2M in revenue or above scale quicker, and hosts an executive leadership program that includes year-round education, networking, and events.

The number of women business owners has more than doubled in the last 2 decades. There are now 12m+ female-owned ventures in the US, generating over $1.7 Trillion. This group is also becoming increasingly diverse — 64% of businesses started by women in 2020 were founded by women of color, making entrepreneurship a great engine for economic mobility. Yet the barriers between women and entrepreneurial success continue to limit progress. A recent survey revealed a range of issues facing female business owners, including:
- Establishing their business’s reputation and finding clients
- Getting capital and finding investors
- Maintaining a work-life balance

Despite making up 40% of all business owners, women receive just 7% of VC funding and only 25% of female owners pursue business financing.  However, the tides are changing, and female trailblazers have created women-focused VC FUNDS (Halogen Ventures, Glasswing Ventures, Fika Ventures, SoGal Ventures and 112 Capital); NETWORKS (Amber Grant Foundation, Women Startup Lab, Ellevate, WEConnect International) and other resources. For entrepreneurs, IFundWomen with offices across the U.S., is a marketplace that’s raised $2.4M to help women crowdfund their ideas. 

Since the percentage of women and minority-owned businesses has been on a steady upswing over the last five years, I’ve noted some of the favored industries for women owned firms – see illustration. As women leaders become more prominent in existing industries, this will also motivate young women to enter emerging micro-niches, such as female technology (FemTech). FemTech companies focus on improving all women's wellbeing. Some Interesting examples include:

• 'Clue' helps over 13M women each month get insights into their reproductive health using its Android and iOS apps. The company raised $31M and gained FDA clearance in the U.S. last year.

• 'Elvie' with offices in New York City, raised $42M to develop women-focused healthtech. The company’s first release was an app-connected Kegel trainer that helps women strengthen the pelvic floor. Its latest is the Elvie Pump, the world’s first silent wearable breast pump.

• 'Carrot' is working to modernize fertility benefits. The company, with offices in New York City and San Francisco, offers a network of 1.9k clinics in over 40 countries for everything from egg freezing, in vitro fertilization (IVF) and adoption, donor, and gestational services. 

With 12+m women-owned ventures out there, do you wonder how many your firm might already be serving?

Post #940

Target The Industries Within The Industry.

If there is one industry that has contributed dramatically to the 2021 fortunes and record setting profitability of some top tier AmLaw 100 firms, it would have to be the Private Equity Industry, which globally has more than $2 trillion in capital ready to invest. At Kirkland, outside of its Chicago base, its offices are almost entirely focused on this one industry.

Others seem to be scrambling to compete, some by laterally recruiting high level talent in this area. For example, DLA Piper recently announced that it is adding a group of nearly 30 PE attorneys in a move that's part of the firm's push to entrench itself as a premier player in the middle market. 

How else could one play to win in this industry?

One thing you always need to be doing is monitoring new developments and disruptions occurring in any client industry. For example, what happens when this same PE industry decides that it needs to become more industry specialized going forward?  Will this open up new opportunities for competing with any firms now taking a generalist view to serving Private Equity clients?

My research indicates that SPECIALIST private-equity firms are now gathering a larger share of investor wallets in a crowded PE market where differentiation is becoming increasingly important. Funds with “clear areas of expertise” are drawing more investor capital than otherwise might have gone into traditional buyout funds. And what that means is that many PE firms are becoming more focused on specific industries, internally developing more industry expertise, and will be looking for advisory and LEGAL resources who also have that same expertise.

This year, two thirds of PE professionals expect MORE M&A transactions with PE involvement than in 2021, with certain industries perceived as the most attractive. I would identify the following top ten ‘groupings as the more lucrative target markets:  #1: Technology, media and software / #2: Pharma and healthcare / #3: Business services and logistics / #4: Infrastructure / #5: Energy and Utilities / #6: Consumer goods and retail / #7: Financial services / #8: Industrial goods and engineering / #9: Building and construction / #10: Chemicals

As but one example, it’s reported that One Rock Capital Partners’ focus on the chemicals and industrial sectors has led to deep deal sourcing as well as relationships with bankers to those sectors and others with knowledge in the evolution of these industries to make finding and evaluating deals a smoother process. 

A new BTI report identified 5 tactics driving record breaking profits and growth, telling us that top legal decision makers repeatedly say that a law firm’s understanding of their industry is the biggest differentiator in the legal market today and also one of the largest drivers of premium rates.

Post #939

“First Among Equals” Nominated for Recognition Award

SUBMITTED by Dennis Kennedy (Center for Law, Technology & Innovation at Michigan State University; independent consulting innovator; citizen of #CreatorEconomy; advisor):

Post #938

Do You Know What Pressures Your Client Faces?

According to a new study conducted by Corporate Board Member, 75% of corporate directors reported they would like their General Counsel to express views on business strategy and actively participate in strategic planning – BUT as one expressed it “In my experience with six boards, it's hard to find a GC who has the breadth to make contributions at a strategic or business level.”

There is a huge difference between the expectations on General Counsel today compared to 10 years ago; and not everybody has evolved such that finding someone who fits the bill can be a challenge. In fact, when board members were asked to rate their satisfaction with their GC across various competencies such as business acumen, EQ, integrity, leadership and communications, strategic perspective ranked low on the list.

As a number of directors expressed it, when it comes to working with the GC, most important in the board’s eyes is for the person to have a good understanding of the purpose, vision and strategy of the company in order to provide counsel that is targeted and specific. “I have, in the past, had situations where GCs tended to a lot of legal provisions, but if they’re not able to relate them to the company in a practical way, you’re left wondering, ‘What do I do with this?’” said a Director on the board of Reinsurance Group of America.

So how can YOU ADD VALUE?

MYCOUNSEL: If you know your client’s business, which means KNOWING the inner workings of their INDUSTRY, perhaps you can help the GC by delivering some strategic and proactive counsel.

According to one Industry Group Leader, this advice should serve as an example: 
“It’s critical to see beyond the short-term task list and think more strategically. Clients and potential clients want forward-leaning legal counsel who can see around corners and protect their business interests—it’s that simple. 

Your job is not only to do great work for your clients but help them prepare for challenges that aren’t even on their radar. It’s crucial that you spot what’s ahead because when a client brings up an issue that’s become a pain point, you’re already playing catch up. That’s not a position you want to be in. With technology rapidly progressing, clients are seeking legal counsel with experience and long-range vision who can identify pitfalls they may have overlooked. They know your real value is not just in the day-to-day work, but in heading off major headaches and institutional crises—having foresight about regulatory changes long before they’re covered in the news media or announced in a press release.

I now prioritize building an elite team that will flawlessly execute on client work and assess the wider regulatory horizon for percolating problems. My goal is to prevent the hands-on, day-to-day management tasks from obscuring the bigger picture—to see how our work fits into the constellation of moving parts within the client’s industry.”

Post #937

You Claim to Have Industry Practices - But Who Are You Kidding?

I see law firms list “Industry” but when you examine their website particulars there is little there of much substance. They list what legal services they may provide to the BROADER industry, but they do NOT identify any specific sub-industry client groupings where they have expertise. 

Here are 10 examples of growing Billion Dollar niches worth identifying:

• TECHNOLOGY – Digital Forensic Services. ($2 Billion)
Companies recover, analyze, investigate digital data found in encrypted and erased files; often to help solve cybercrimes.

• MANUFACTURING – 3D Printing & Prototyping. ($2 Billion+)
Automatic construction of physical objects using additive manufacturing technology.

• INSURANCE – Cyber Liability Insurance. ($3 Billion)
Companies protect business/working professionals lost income/liabilities related to business interruptions, network security, internet liability, electronic communications, intangible assets and online content liability.

• LIFE SCIENCES – DNA & DNA Forensic Laboratories. ($3 Billion)
Provides DNA paternity testing, DNA forensic services, veterinary DNA testing, ancestry tracking and services related to human genetics.

• RETAIL – Cannabis Equipment & Accessory Stores. ($3 Billion)
Operators in this niche sell cannabis-related equipment and smoking accessories; but do not include cannabis sales.

• SOFTWARE – Speech & Voice Recognition. ($4 Billion)
Speech recognition signifies the ability of a machine to understand/carry out spoken commands by interpreting articulated words.

• INDUSTRIAL SERVICES – Hazardous Waste Collection. ($4 Billion)
Includes hazardous waste collection services; radioactive waste collection/hauling services; hazardous waste transfer stations.

• FINANCE – High Frequency Trading. ($6 Billion)
Financial securities trading firms/individual broker-dealers using high-speed market data/sophisticated analytics to identify temporal supply/demand trading opportunities. 

• UTILITIES – Solar Power Generating Facilities. ($11 Billion)
Operators own/operate solar-power-generating facilities in the form of either photovoltaic panels or solar thermal power stations.

• HEALTHCARE – Ambulatory Surgical Centers. ($30 Billion)
Operators provide emergency services, including setting broken bones, treating lacerations, tending to patients who have suffered injuries due to accidents/trauma.

Each of these lucrative niche opportunitie$ (and there are so many more!) involves hundreds of potential clients and millions in revenues.  So see if you can find one competitor in your market footprint that claims to be serving any of these sub-industry clients?

Post #936

Transform Your Strategic Intentions Into Tangible Actions

This is intended to provide some prescriptive relief for those firms who invest enormous non-billable time into developing a strategic plan, only later to suffer the affliction known as seeing SPOTS – Strategic Plan On The Shelf!

https://www.legalpracticeintelligence.com/blogs/practice-intelligence/transform-your-strategic-intentions-to-tangible-action

Post #935

Fostering A Skill Building Culture: Start by Learning From your Clients

It is trivial to observe that most new learning happens while professionals engage in various client matters. What is not trivial to point out is that far too many firms fail to capture and disseminate much of that knowledge. It never gets leveraged and used to the benefit of outperforming competitors. One advantage that should accrue to any well-managed group, is the value that each professional can bring to clients as a result of the accumulated knowledge, wisdom, systems, methodologies, and experiences of the colleagues on their teams.  

As a leader, you need to instill a passion and curiosity within each partner to identify a specific skill or special interest, identify what they do not know, and what is new out there that addresses some particular pain point that more clients may soon need to solve. Then, at least once every month, have each partner pull out the list of client work and assignments that they have been working on and examine each. Allow time for each member to make a brief presentation. Because everyone knows this is coming, each is subtly forced to reflect on his or her experiences and is more likely to convert the knowledge gained from those experiences into a shared resource. Invite discussion, ask questions, provide critical feedback and examine how and whether the activities described benefit others in the group.

Start by asking each partner, in turn, to identify and explain to the group any particular client matter that . . .

To Read this entire article: https://www.nationalmagazine.ca/en-ca/articles/legal-market/law-firms/2022/fostering-a-skill-building-culture

Post #934

More Firms Crediting INDUSTRY FOCUS for 2021 Record Results!

Entitled “Leaning Into On-Fire Industries,” an article last week identified Ropes & Gray as posting double-digit increases in all key financial metrics last year, record results that Chair Julie Jones said reflect the firm’s strategic industry focus on private equity, asset management, technology, and health care and life sciences. What struck me was that the firm does work for 9 of the 10 largest Private Equity firms, a group who themselves have become more disciplined in focusing on their client industries.

One Wall Street Journal article identified how industry focused private-equity firms are gathering a larger share of the investor’s wallet, which has become critical in a crowded PE market where differentiation is increasingly important. Funds with “clear areas of expertise” have drawn more investor capital that otherwise might have gone into traditional buyout funds, claimed a report from consulting firm Bain & Co. 

The Life Sciences industry has witnessed growth in the neighborhood of 30% among biotech companies going public. And this life sciences focus is particularly core to Cooley, a market leader, where the life sciences industry touches a third of the firm’s $1.5 billion in annual revenue, with 95% of its attorneys serving life sciences clients. “If you took the life sciences group out of the firm, it would be its own Am Law 100 firm,” said Christian Plaza, vice chair of the firm’s global life sciences group.

On a similar note, Goodwin Proctor attributed it’s record setting 2021 performance to a decision it made some years previous. According to chair Rob Insolia, “we decided we could not compete by simply holding ourselves out as the smartest or best M&A or capital markets lawyers. Instead, the firm decided it wanted to be among the top four in a small number of sectors. The premise was that if you understood the industry of your client as well as the client did, you could leverage off of that.” And it paid off! In 2021, the firm handled 10% more deals than its closest competitor. 

Meanwhile, AmLaw 200 firm Adams and Reese posted nearly flat revenue last year as the firm's head count and equity partnership continued to shrink. Nevertheless, the firm still exceeded its financial goals by growing RPL and PEP. How? At the direction of managing partner Gif Thornton, the firm “refined its strategy on the practices we wanted to have, emphasizing leading industry practices such as construction, energy, and financial services" - and jettisoning under- performers. It consequently met or exceeded all of its financial goals for 2021.

At the other extreme, I noted one East Coast, 70-Attorney firm, announcing a reorganization, a new managing partner and a “rethinking of the tradition of organizing around practice groups” to building an infrastructure focused around client industries.
As a result, their website identifies … 28 different industries!

Are you kidding me?

Post # 933

What it Really Means for Law Firms to be Industry Focused 

(Canadian Lawyer Interview)

It starts with understanding the benefits of the firm relative to how you serve clients. Numerous studies show that the number one reason clients pick a firm is their demonstrated understanding of their industry. They will often say it in words like, “I want somebody who knows my business.” What they're saying is, “Do you understand our lingo? Can you speak our language? Do you understand how I make a buck?”

Law firms do not understand the industry at a micro level. They don't know how to go granular. For example, I got appointed to an advisory board in Western Canada with a medical group of private clinics in the anti-aging, regenerative medicine field. I'm sitting in one of my first meetings with the CEO, who is concerned about litigation risk assessment, and his regular outside law firm isn't going to cut it, so he is looking for expertise in health care. He arranges a meeting with three firms. He asked them, “what do you know about BHRT?” They were squirming a little bit, and one of the more senior lawyers said, “Help us with that acronym. What does that stand for?” The CEO says it is Bioidentical Hormone Replacement Therapy. And the response from the law firm after about 30 seconds was, “Please understand, we have the largest health care group in the country.” The CEO’s response? “Thanks for coming in.”

The first step starts with looking at your client base and industries where you already have a depth of expertise. I see many firms with maybe 100-120 lawyers listing over 15 industries. Are you kidding me? Do you really think that the clients are that naive? Pick two or three. You look at the bios of some of these lawyers, and they've been allowed to list half a dozen different industries, often industries that have nothing in common with each other. Do you think that the clients are that stupid? Meanwhile, I often hear from lawyers, “we're a full-service law firm.” And I tell them, please go Google full-service law firm, you get 3.2 million results. Go Google leading full-service law. Now you're probably down to about 800,000. Your competitor is not the firm down the street. It is Google.

These comments are excerpted from an interview with Tim Wilbur of Canadian Lawyer Magazine.  Read the entire interview here - https://www.canadianlawyermag.com/resources/practice-management/patrick-mckenna-on-what-it-really-means-for-law-firms-to-be-industry-focussed/365532

Post #932

5 Ways Law Firm Leaders Can Prioritize Strategic Thinking.

I don't know if you have consciously noticed, but we are all becoming far more reactive than at any other time in history.

For example, it would seem that you can no longer hide behind voicemail or email because both colleagues and clients will now simply send you a text and then look for an immediate response. We are becoming the text-messaging generation.

Today, if you are like many law firm leaders, you are caught in a tidal wave of 24/7 communications from your partners and direct reports for quick responses to their requests. At the same time, other lawyers, staffers and, of course, clients want your input, require your approval or request your participation in meetings or discussions.

For almost any law firm leader, keeping busy and focusing on the urgent is seductive. Many confide to me that they continue to find themselves more and more distracted. So is it any wonder that you are not being as strategic or thoughtful as perhaps you would prefer to be? Yes, you may be busier than ever before, but perhaps far less effective.

Read more at: https://www.law360.com/articles/1476694