Beauty parades have become an inevitable feature of the process of winning new assignments in the mergers and acquisitions field, with sophisticated clients trying to choose the best-qualified and most competitive team of lawyers for a particular job.
The use of beauty parades has accelerated in recent years because of a greater number of in-house solicitors and ex-solicitors in corporate finance houses – or “poachers turned gamekeepers”. An important part of their function is to source expert advice competitively. An additional factor has been law firms' increasingly aggressive approach to marketing their services to new clients. Clients are becoming more aware of the diversity of choice available to them.
There are a number of points to remember when preparing to take part in a beauty parade:
Always establish a week prior to the meeting who will be attending from the client, an agenda of points which they would like to cover and the bare bones of the transaction anticipated. Without this basic awareness, you will not be able to prepare adequately or focus on the client's real concerns on the day. Where a corporate finance adviser is orchestrating the beauty parade, it will normally be willing to provide background information.
Always hunt in packs. You should present a balanced team of lawyers (partner, senior assistant and junior assistant), because if the client does not like you your colleagues may just save the day.
Do not “switch-sell”. Clients hate being sold on a firm by a senior partner who then disappears over the horizon and does not reappear until the champagne bottle has been cracked open. While it may be useful for a senior partner to “host” the beauty parade, the team which will be transacting the deal should drive the discussions at the meeting. Even a junior lawyer can make a valuable contribution to demonstrating that you have a well-rounded team.
Demonstrate that you understand the commercial priorities underlying the transaction and demonstrate a commercial approach to overcoming any legal obstacles. Being commercial does not mean being unprofessional – it means standing out from the crowd of other competing lawyers.
Be seen to be adding value immediately by identifying potential problems – and opportunities – in the proposed transaction. At the same time, be ready to offer solutions. Clients who are unaware of common but complex areas of tax and pensions and environmental pitfalls will be surprisingly easily impressed. Similarly, the simple fact of having dealt with the other side's lawyers before can be perceived as a major benefit.
Every client thinks their business is unique. Always seek to demonstrate specific sector or industry knowledge and experience, either as an individual, a team or a firm.
Always volunteer previous clients as referees and expect them to be taken up. Even if such references are never taken up, however, they represent a powerful affirmation of your past track record of successfully completed deals.
Be upfront about discussing fees but without necessarily committing yourself on the spot; there is generally the opportunity to confirm a fee proposal a day or two following the beauty parade.
There are also a number of things you should not do.
Do not ask uninformed questions. For example, do not ask a house builder whether he has a land bank – every house building company does.
Do not field people who take virtually no part in the meeting – they will be seen as unacceptably lightweight.
Do not dwell on legal complications in a downbeat way without volunteering ideas to solve them.
Do not refuse to reveal charge out rates for the individual team members because it will cause distrust.