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The case for smart collaboration

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Law firms face a serious conundrum. Their clients increasingly need them to help solve complex problems, ranging from cybersecurity to global trade issues, that only teams of multidisciplinary experts can tackle. Yet, most law firms have carved up their highly specialized, professional experts into narrowly defined practice areas, and collaborating across these silos is often messy, risky and costly. These two competing trends – complexity of business problems and increased specialization – make collaboration critical to the strategic growth, profitability and sustainability of a firm.

Simply put, smart collaboration is not optional; integrating the firms’ greatest asset, the expertise of their lawyers, to deliver innovative solutions to clients’ thorniest problems is essential. But unless you know why you’re collaborating and how to do it effectively, it may not be smart at all. So before we move on, let’s clear up some confusion. Smart collaboration is different from delegation, sequential teamwork and cross-selling. Clients hate cross-selling, the legal equivalent of “do you want fries with that?” While collaboration may not involve direct, face-to-face work, it does require repeated interactions that, over time, allow the creative recombination of different people’s information, perspectives and expertise.

Even as partners recognize the need for greater collaboration in their firm to drive revenues and growth, their intellectual buy-in often doesn’t translate to behavioral change. Why? Oftentimes because they distrust the competence or character of their own colleagues, or fail to understand the full range of their firm’s potential offerings. Convincing them to collaborate requires hard, data-based evidence about the possible upsides – and about the risk of failing to collaborate.

My research shows that when firms get collaboration right – that is, do complex work for clients that spans practices and offices within the fi rm – they earn higher margins, inspire greater client loyalty, gain access to more lucrative clients and attract more cutting-edge work. This form of integrated client service that often crosses practice groups and other silos is what I mean by “smart collaboration,” and it’s the kind of client service that leads to the benefits detailed here.

Financial benefits

The financial benefits of multi-practice collaboration are clear: The more practices that serve a client, the more revenue the client generates for the firm each year. In a typical firm, moving from one to two practices serving a client triples that client’s revenues, and the addition of each subsequent practice continues to grow fees. Clearly, if 1 + 1 = 3, then the lawyers who are involved in cross- practice service are doing more than just referring their colleagues to provide their own siloed work.

Cross-practice collaboration allows lawyers to gain access to senior executives who have broader responsibilities, larger budgets and more sophisticated needs. This complex work commands higher margins, revenues and hourly rates. As one partner said, “The clients are much more generous on fees because if it’s so big, the deal’s got to get done, and they cannot waste time negotiating or nit-picking.” While single-specialty is often viewed as a commodity awarded to the lowest bidder, cross-practice work is less subject to price-based competition.

Done right, cross-practice collaboration makes clients stickier in the long run by creating switching barriers. As the general counsel of a Fortune 100 company explained, “Despite what they think, most individual lawyers are actually quite replaceable. I mean, I could find a decent tax lawyer in most fi rms. But when that lawyer teamed up with colleagues from IP, regulatory and ultimately litigation, I couldn’t find a whole-team substitute in another fi rm.”

Talent-related benefits

Today’s war for talent is at least as brutal as the battle for clients. A massive challenge is recruiting laterals into the fi rm – and then finding ways to retain and help make them sustainably productive. Our data shows that unless laterals successfully bring new colleagues onto their own client work and receive reciprocal collaborative opportunities within their first year or so, they are very likely to depart. Collaborating builds trust between lateral hires, their colleagues and new clients. The trick, of course, is making sure that your fi rm is set up to foster this kind of lateral-incumbent collaboration. One critical factor is specific, account-level planning and then holding both laterals and the partners who recruited them accountable for delivering those plans.

Smart collaboration as a differentiator

Clients want collaboration even if they aren’t directly asking for it per se. Most clients are solely focused on the outcome, and it’s up to the skilled lawyer to determine if and when collaboration will achieve the desired results. What clients want is for their lawyers to understand their issues deeply enough to offer sophisticated advice and to line up the right legal team to deliver it – no matter where in the fi rm the needed experts reside.

Skilled lawyers are able to connect the dots. Here’s how: First, identify the client’s most complex issues where multidisciplinary collaboration is necessary. Second, clearly explain how each expert adds value. Timing is key: It’s easier and wiser to propose a collaborative team up front than to expand the team later on. And, ultimately, it comes down to trust-based relationships – the client’s belief that you have their best interests at heart, over the long term.

Our data shows the strong relationship between collaboration and client longevity: Serving a client with a team triples the stickiness of the relationship – even if one of the lead partners departs.

Conclusion

Leveraging experts through smart collaboration benefits not just the firm, but also the client and the individual lawyer. Clients can rely on well-informed external counsel who understand their business deeply and holistically. Lawyers who collaborate earn higher margins, build trust with their colleagues, gain access to more lucrative clients and attract more cutting-edge work. Recent data suggests that some firms are pulling away from the pack in terms of profitability; unsurprisingly, many of them are the ones clients name as being more collaborative. Now is the time to act before your firm is left behind.


Meet the author

Heidi Gardner
Heidi Gardner, Ph.D., is a distinguished fellow at Harvard Law School’s Center on the Legal Profession, a Harvard lecturer on Law and faculty chair for some of HLS’s executive education programs. Previously, Gardner served on the Organizational Behavior faculty of Harvard Business School; lived and worked on four continents, including positions with McKinsey & Co. and Procter & Gamble. She holds a B.A. in Japanese Studies from the University of Pennsylvania, a master’s from the London School of Economics and a Ph.D. from London Business School.
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