Thomson Reuters Forum spoke with Gregory B. Jordan, general counsel of PNC Financial Services Group, and former global managing partner of Reed Smith LLP, about evolving client relationships, the exacting nature of determining client needs, and why both parties want the other to succeed.
The evolution of the legal profession, especially the relationship between law firms and their clients, is happening at an ever quickening pace, and those at the tip of that legal spear — those leading law practices both in private firms and in-house — are feeling these changes most acutely. Gregory B. Jordan, who has very recently been on both sides of the legal table, may know this better than most.
Forum: In November, you created a widely distributed list of top things you wish you had known when you headed up a law firm. What was the thinking behind that list?
Jordan: I was really trying to reflect on things that made a big impression on me during my first year on the client side. Things that law firm leaders would find useful or helpful, that I wished I had seen a little more crisply when I was on the law firm side – it was a sharpening of the perspective that comes from sitting at the other side of the table.
Since that time, I think we’re continuing to see corporate law departments get bigger. There’s a tremendous amount of talent coming from leading law firms and they’re bringing with them particular expertise that’s needed in big companies.
At PNC, for example, we have added expertise in particular areas around financial regulation, with experts out of the key regulatory agencies, people with Dodd-Frank and Consumer Financial Protection Bureau (CFPB) expertise and people with great expertise in dealing with government matters — investigations, enforcement actions and matters like that.
What that means for law firms is that you have to keep identifying areas where the companies need you — and there are lots of places. But law firms need to pay a lot of attention to the hiring going on at companies as specific expertise is added.
Forum: That ramping up in corporate legal practices seems one of many legal industry evolutions we’re now seeing that isn’t likely to go away or revert back to how it was before.
Jordan: I agree. It seems pretty clear that this is not just a “moment in time” situation. Again, to use PNC as an example, we see that banking is increasingly regulated and you need to have experts in regard to those regulations and those regulators.
So, while the law firms have been staffing up, hiring former prosecutors and former regulatory agents, you also see companies adding capability there.
I think the buying of legal services has become more exacting. The buyers of legal services are more certain of what they need, and because they’ve added a lot of capability internally, they have a sharper eye on what they need externally, the value, and what they are willing to pay. So for the law firms to fill those needs, they have to be in sync with their clients and aware of where their clients’ needs are and are moving.
I see this as an evolution — firms have continually gotten better at this, and they’re going to have to continue getting much better at it because the buyer is becoming more sophisticated, and what they want to buy has become more precise and the in-house capabilities have become stronger. So what the firms need to provide to add on to that becomes much more specific.
Forum: Clearly the expertise is crucial, but how does a law firm make that known to clients?
Jordan: That’s the other important piece to it. Knowing what your clients are doing and what they need is half of it – the other half of it is making sure the clients know that your firm has the expertise. You have to become front of mind with the clients, so when they are going to make a buying decision, they are thinking about you. Even if they pick another firm this time, or next time, you want to be considered.
One of the challenges for law firms – and I appreciate this now that I am on the client side – is how do you make sure the information flowing to the client about you is rich, specific, relevant and attracts interest.
That means you can’t just wake up one day and decide you’re going to try to do something. You have to have a plan and you need to say something that is relevant and different. You also have to have a commitment to mining the information and getting it across to people in a consistent, high-quality way.
Forum: What do you think is the biggest factor in whether a firm can pull together successful responses to all these industry changes and succeed?
Jordan: There are a lot of differing factors that can come into play, but there is no question in my view that now, one of the great differentiators will be the quality of a firm’s leadership. The leaders who are able to push through all the obstacles to helping a law firm change and evolve are going to earn their money. High-quality, enlightened leadership who can lay out a vision, be persuasive, and stick to it when partners in the firm are thinking they don’t need to change quite so much — those are the ones that will make a difference.
Overall, I think the combination of all these evolving trends is what makes this challenging for law firms today. You have a lot of change rolling through the industry as the world recovers from the recession – that’s what makes this an interesting time to be in the profession either as the head of a law firm or the leader of a law department.
Forum: And since you’ve been both, what has been your biggest surprise in moving from one side of the table to the other?
Jordan: I think law firms shouldn’t underestimate how much their clients want them to succeed. I haven’t seen on the client side all the angst I used to worry about when I managed a firm about whether the clients thought the firms charged too much or the partners were making too much money. I can see that clients like having great relationships with law firms. We enjoy that and we benefit from that – we like when we feel they’re thinking about us not just as a source of revenue, but as a partner in our success.
It’s not the Us vs. Them world that maybe it seemed like we were headed to before. The law firms that are managing relationships well will have friends and fans inside the companies, and we want them to succeed.
Buying legal services is not a completely transactional exercise like purchasing a commodity. We want to do well and we want our firms to do well too.
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