Pieter Looijenga, Account Manager at LexisNexis InterAction, explores business development considerations that help to strengthen the foothold law firms now have in the EU.
Many large UK law firms are opening offices within the European Union jurisdiction, post-Brexit, as they look to protect their business, but perhaps also to take advantage of an opportunity to expand internationally. This trend isn’t unique to the legal sector. The UK financial services sector is heading in the same direction – the EY Financial Services BrexitTracker data shows that 43% of the firms monitored have publicly stated the move of some of their UK operations to Europe.
As firms embark on their international expansion initiatives, a strategic approach to business development (BD) will play a vital role in how quickly they are able to establish a foothold in the region. Let’s look at some key considerations here.
“Should” versus “could”
At the risk of stating the obvious, the business rationale must trump just pure aspiration or desire to expand into a new region. Do the following scenarios sound familiar? A partner returns from a visit to a country and based on an initial “good feeling” about the region, suggests a presence in the region. Or a firm opens a new office in a particular city because the Managing Partner is based there. Or even, a new senior executive joins the firm with language skills in a particular region, which potentially becomes a reason to establish a presence in a country.
It’s a case of “should” versus “could”. An analysis of things like how many existing clients have offices in the country in question, could the firm extend its reach still based in the UK, are there good relationships with intermediaries in that jurisdiction, and what kind of new skills and resources would be required, is a good place to start. Similarly, who are the new prospects in that region for whom conflict checks need to be done to determine if they indeed are organisations with whom business could be done with and so on, must be undertaken.
An office for office’s sake
Sometimes firms, for purely marketing reasons, open offices in other jurisdictions as outposts, potentially in the misguided belief that their ‘brand’ and local presence will be sufficient to help them tap into the market. So, they rent offices, deploy systems, hire some staff and then expect the practice to flourish. Often, they’re either unsuccessful or accomplish minimally. Why? Because the office operates in isolation, there’s hardly any knowledge and best practice sharing with the parent firm, no partners and lawyers are seconded to drive and establish the business, and there’s no cultural grounding.
To create a meaningful presence, firms must look to standardise business processes by expanding the deployment of their current technology systems including practice management, finance and accounting, marketing, BD and CRM, to the new office. Doing so will ensure that the new office hits the ground running, benefits from a structured and goal-orientated approach to BD including capabilities for referral and pipeline management, targeted marketing campaigns, passive data management and Microsoft Outlook synchronisation, data sharing and compliance, and the list goes on.
If the firm’s expansion is via an acquisition, the same approach applies – but with the added requirement for alignment (both operational and cultural) across the two organisations. CRM technology again can play a substantive role. Drilling down into the analytics provided by the system such as the strengths and weaknesses of client relationships across the combined network of the two firms, the engagement scores of lawyers and partners with key clients, and the reasons for success and failure of past campaigns, will greatly assist in the development of a compelling business strategy for growth.
One contacts database, configured for multiple compliance regimes
With digital, remote and hybrid working formats now the norm, a firm-wide CRM system housing a single contacts database is more essential than ever before. It will provide a holistic, 360 degrees view of clients and prospects, which will help BD teams make connections across their network of influence and identify new opportunities – as they work towards hitting their business growth targets for the region.
Of course, ensuring compliance with the various data privacy and data protection regimes in the EU is imperative – a lot of which can be incorporated and automated in the firm’s CRM system. However, a word of caution – typically, the database administration team is tasked with applying data privacy and protection policies to the contacts database in the CRM system. When extending the CRM system to another geography, given the complexities and nuances of data protection regulations, tasking the database team to ensure compliance is a big ask.
So ideally, the regulatory element is best driven by the firm’s compliance team, who are better equipped to ensure conformity with regulations, both at a global and a country-level. For example, data suppressions and the right to be forgotten as part of the GDPR may need to be automatically applied at a global level whilst communications and mailing preferences and opt-outs may require to be enforced at a global and potentially at a regional level. This approach will ensure that the new office’s BD efforts aren’t unduly hamstrung, and indeed the value of best practice, firm-wide CRM isn’t lost.
Aided by technology, firms have a good chance of success
A well-considered and robust approach to BD will facilitate a healthy book of work, from the ‘get go’, whilst enabling the team to routinely course correct. CRM technology can support such programmes – right from when the idea is seeded – by providing insight and intelligence to aid the development and execution of a business strategy that delivers against tangible business objectives.