Reports that Herbert Smith is considering focusing its lawyers on the needs of clients through the creation of industry sector teams is welcome news to those of us who have been working on that basis for some time.
Two years ago Nabarro Nathanson reviewed the way it operated as a business and concluded that the day of the generalist firm other than for the 'magic circle' was dead and that focusing on understanding the commercial business of clients was a pre-requisite for successful firms.
Since then we have been progressing down the industry sector track. We have seven industry sector groups – property, pensions, IT, corporate finance, public sector, energy and a service for heavy industry clients, the National Centre for Law in Industry – that market and present themselves to clients. Some sectors are stronger than others, but they all reflect areas of the law where we have an outstanding track record.
However, anyone thinking that an industry sector approach is easy or can be achieved without major discussions is deluding themselves. We have had significant internal debates on the balance to be struck between focusing on clients through industry sector teams and the traditional legal departments that make up any firm – banking, employment, environment and so on. We use a mixed approach. Our internal management is structured along the lines of legal departments while our business development is through industry sectors. Although it is easier to manage through traditional legal departments, it is much more effective to deploy limited business development resources on the needs of a select group of clients and their areas of business.
This approach requires a long-term view. No one can reasonably expect such an approach to yield overnight success and, even after two years, we still consider ourselves to be at the beginning of the process rather than the end. But we are starting to see the benefits of our strategy: clients appreciate the fact that you know their industry and know about commercial and other developments in it, not just the law.
Such a strategy is not set in stone. We recognise that legal markets change, so we keep a close eye on how our sector groups perform. We may change the focus of them over the long term or even add or remove one or two. Every firm needs to take commercial decisions as much as their clients – there is no point in continuing with things if they are not working or cannot be changed for the better.
You need leaders to make an industry sector work: lawyers who understand their market but are team players and able to see outside their own particular discipline and bring in those who can make a contribution to the development of the industry sector group. Such people need support and recognition for their work and efforts but they must also be accountable.