By Patrick J. McKenna

If you're not special, you're dead. Well-focused specialists are winning the marketplace wars. Is it time to change your strategy from do everything to do only what we do best?

In answer to the question Upon what basis is your firm truly differentiated from your competitors? managing partners respond, but only after taking some time for reflection. The typical response usually will include some reference to the firm's full breadth of services and extremely high technical proficiency.

This pause for reflection is interesting. It doesn't suggest that the question came as a total surprize, as one that had never been asked before; or that this is an issue that this managing partner has not regularly considered. What it does suggest is that despite any previous contemplation, a wholly satisfactory answer has not been found and that a suspicion exists in the mind of this managing partner that he or she is offering, at best, only a superficial response.

The Defining Question

In strategy sessions with groups of partners we have often posed a similar question to the entire group. In these sessions we have become fond of posing a question we believe is reflective of the primary concern that occupies most prospective clients' minds -- what we have come to think of as the defining question. It goes like this: Tell me please -- as a prospective client, why should I choose you (your practice group/your firm); what makes you distinctive and what added-value can you bring to my business matters -- that I cannot get anywhere else? (Please, do notice those last six words).

The responses we elicit to this question are fascinating! Firstly, we find, that it would be highly unusual for you to get the same answer from two partners within the same practice group, and you certainly won't get even a slightly similar response from two partners within the same firm. It is the rare firm or practice group that has developed a song sheet of common (prospect and client) questions and suggested responses for their professionals to use. Secondly, the answers that you do get are likely (in the words of one general counsel who we suspect evidenced these responses once too often) to make you want to puke on your shoes.

Responses usually boil down to a variation on two very familiar and time-worn themes. You will likely hear: because we can do it better, faster, and cheaper -- so why not give us a try on just one matter so that we can show you what we can do. (As if I, as the prospective client, am going to get some divine gratification from taking a personal risk with an unknown quantity). Or you will most certainly hear: because we are a full service firm and we offer a broad array of services such that you really can expect to get some depth of expertise from our firm. (And I'm thinking to myself, how can you truly provide me with any real depth and breadth given your size).

What we have learned those responses indicate to most sophisticated clients is that if you were truly recognized as having the preeminent specialized expertise in any given area, it would not be necessary for you to resort to tactics of better, faster, and cheaper. Your expertise would be apparent and therefore speak for itself, or it could be easily demonstrated to the perspective client and present some compelling evidence for consideration. Alternatively without a preeminent position, proffering a full-service capability is not likely to be viewed as credible unless your firm is from among a handful of the largest in the nation.

The Grand Old Rhetoric: Broader, Bigger and Better

Being full service is the grand old rhetoric, the guiding light, the compass of the modern business-oriented professional firm, the ultimate strategy. Managing partners, especially those at the average mid-sized firm, behave as though they are convinced that the pursuit of full services automatically places their firm on a direct route to economic success. Full speed ahead (in all directions) seems to be the call from the executive committees at many of these firms. If we build it (a full services firm); they (the clients) will come. However in recent years, these roads, have for many firms, become mazes riddled with traps, wrong turns and dead ends.

Some firms have even concluded that the obvious answer to becoming full service is to grow larger, and that the fastest route to growing larger is by way of merger. We need only witness the number of mergers currently taking place among mid-sized firms. However, the logic that suggests that two mid-sized firms competing in middle tier markets once having been merged are somehow going to miraculously rematerialize as a mega-firm with mega sized clients is incomprehensible. It's not going to happen in my lifetime and not likely to happen in yours! These mergers are destined to simply create a larger more fossilized entity, without the agility to service the requirements of their middle-tier clients.

There might have been a time when there were relatively few players in any competitive practice arena and clients had little real power. Over the past decade however, marketplace changes have altered significantly the rules of this game. Today, many large companies from among various different industries are either as a result of their own mergers diminishing the number of firms serving them, or by overt consolidations reducing drastically the number of firms that they use.

Unfortunately, too many firms have not truly comprehended the full extent of these changes. Take the case of DuPont who reduced its panel of outside law firms from more than 340 to 34 worldwide, because, according to associate general counsel Thomas Sager, it was hemorrhaging money; the EuroBank who slashed its legal providers from over 100 firms to just 8; or, the situation faced by blue-chip British Petroleum (BP) and its group counsel Peter Bevan, planning to reduce its global group of law firms from 120 to 12. This petrochemical giant wanted to slash its #40 million plus legal bill following the merger with US oil company Amoco. Prior to the merger BP had referred work to a list of around 30 firms in the UK and another 90 more worldwide.

Like these and other major companies who have rationalized their selection of outside counsel, the final choice comes down to splitting the candidates into two camps; one section for the big-ticket corporate work (which usually goes to a handful of large name-brand firms) and another for the niche area specialty work (which, irrespective of firm size, usually goes to those who have developed some notoriety for their specialized expertise).

For firms who make it through these selection cuts, the future may be slightly more secure. After all, they not only have some guarantee of future work, but they are also likely to be receiving resumes from those talented professionals at competitive firms who have had prior experience serving the client.