Michael D. Moberly February 8, 2013
Strategy is about (a.) ‘shortening the odds’ and (b.) ‘winning with choices’, i.e., choices that apply firm wide and in a manner that turns strategy making into a collaborative dialogue where not a single individual’s perspective is necessarily dominant according to A.G. Lafley and Roger L. Martin in their newly published book ‘Playing to Win: How Strategy Really Works’.
Winning however is not always about ‘stomping one’s competitors out of a sector market space or otherwise engaging in activities to ensure competitors lose’. Quite the contrary, say Lafley and Martin, many firms can actually ‘win’ while being in (competitive) proximity to one another.
In this post, I am extrapolating some of the authors key views (found in and applying them to law firms and how they should genuinely consider developing and honing ‘strategies that really work’, insofar as deliberating the economic – business reality that intangible assets have relevance/application to each practice unit within a law firm. In other words, I genuinely believe intangible assets are not the exclusive domain of intellectual property (IP) practice units.
One objective here, not unlike Lafley and Martin’s broader perspective, is to elevate awareness of intangible assets and encourage a law firm wide dialogue. A preferable outcome of such dialogue would be that operational consensus is achieved about how intangible assets have relevancy to…
- each practice area
- the various legal transactions executed on behalf of clients, and whether
- a professional obligation exists to conduct an intangible asset assessment at the outset of an engagement to determine which (if any) intangibles are
- relevant to the legal service(s) being rendered
- at risk
- in play
- affect or influence legal tactics, strategy, and/or outcome.
With respect to the practice of law, I say, any reasonably experienced practitioner would be hard pressed to identify a practice area in which intangible assets are neither relevant nor play a role to the legal work being executed on behalf of a client.
After all, it is a globally universal economic fact – business reality today, that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and profitability reside in – evolve directly from intangible assets. However, such recognition and application of this economic fact – business reality is incumbent on both legal counsel and their client to recognize.
Absent such recognition, by either party, I can suggest, with a high degree of certainty, that money, value, sources of revenue, and/or assets themselves, will be ‘left on the table’, or worse, their contributory value irreversibly lost and/or relinquished to a competitor or legal opponent.
But, as Lafley and Martin point out, generally (not specific to law firms) it’s only when, in the scenario I’m describing, a firm’s practice leaders and managing director recognize the importance of literally ‘getting under the skin’ of client companies, does strategic clarity commence between a firm and a their (business) clients.
For many entities, be they law firms or businesses, their strategy is poorly, if not improperly, equated with merely a plan or vision. When this occurs, it makes it much more challenging to articulate and legitimately practice ‘a strategy’. And, in most instances Lafley and Martin point out, any absence of clarity makes it all the more difficult to describe ‘what winning really is’, which of course, should be any businesses primary objective.
Returning to law firms, in my view, this is where intra-practice recognition, collaboration, and adoption of respectful and practical strategies that genuinely recognize intangible assets play various roles and degrees of relevance to most every client engagement regardless of practice area distinctiveness or expertise.
Conventionally speaking, Lafley and Martin point out, businesses (not unlike law firms in my view) are inclined to seek-select clients (customers) whom they want (assume) to be ‘special, where it becomes, almost exclusively about ‘articulating and winning the value equation’ with these special clients. I assert that any ‘client – law firm value equation’ today should, among other things, factor all intangible assets a client has produced and/or acquired which obligate collaborative insights (about intangibles) being offered from other practice areas, especially given the depth, breadth, range, and embedded characteristics of intangible assets.
Please remember, it is an economic fact that steadily rising percentages (65+%) of most company’s value and sources of revenue, etc., evolve from intangible assets. Logic suggests that equally significant numbers of clients experiencing legal challenges or seeking legal counsel come from intangible asset intensive businesses.
To me, this business reality makes it all the more essential that law firms acquire an operational and strategic familiarity with intangible assets which can be immediately applied to client engagements that translate as timely, relevant, and forward looking (firm) differentiators. I am not reluctant to say intangible asset operational familiarity should include at minimum the capability to identify, unravel and assess the assets’ control, use, ownership, value, and sustainability. Such familiarity lays the foundation for firms, so inclined, to offer services to aid clients’ in achieving a much needed and higher level of stewardship, oversight, and management of their intangible assets.
Simply stated, any law firm should ‘feel’ a professional obligation as a client-centered and dependant entity to make its client’s happier than its competitors. Fully addressing clients intangible assets is a clear, low cost, and potentially lucrative path (strategy) to achieve such a forward looking and competitive stature.
There’s no question ‘winning is important’ Lafley and Martin point out. But, while short term (specific/individual client) wins are duly recognized as being important, long term strategic wins also carry significance and importance. For example, if a law firm doesn’t genuinely sense the importance of trying to make each of its client’s happier, compared to competitor firms, overtime, its clients will recognize they are not be getting what they may otherwise with another firm, in this instance, excellent and practical counsel regarding the stewardship, oversight, management of their intangible assets.
Unfortunately, there are some (law) firms that consistently ‘aim too low’ which means’ they convey satisfaction with ‘just gliding along’ in their current state. based largely on past practice and assuming satisfaction with the status quo. That’s not to suggest they don’t want ‘to be in the game’ and acquire new clients. But, a reality is, some clients are increasingly likely to trade one firm off for another as they learn they need – want specialized expertise, particularly in the area of identifying, unraveling, exploiting, managing, and monetizing their intangible assets. The firm that’s traded off then tries to rationalize why the client opted out and sought legal services elsewhere.
To at least mitigate this practice of clients ‘trading off’, law firms need to convey a genuine willingness to achieve clearer understanding of clients’ strategic, not only their immediate needs. This can be achieved by exhibiting absolutely no reticence about…
- recognizing 65+% of most company’s value and sources of revenue reside in intangible assets and therefore, a growing percentage of clients’ need for legal counsel will involve intangible assets.
- artfully and respectfully ‘getting under a client’s skin’ coupled with the courage to suggest implementing slight alterations and/or modifications, not wholesale changes, to a business clients’ operations to better engage in the stewardship, oversight, and management of their intangible assets.
Enhancing – broadening a firm’s practice to provide intangible asset services, especially to the increasing number of companies that exist and prosper based on the effective attraction, utilization, and management of their intellectual, structural, and relationship capital, vs. just focusing on or limiting the firm to delivering IP only services, i.e., patent searches and issuances.
There is absolutely no evidence to refute the reality that if will likely prove quite prudent for law firms to consider ‘carving out’ groups of existing or prospective clients currently being un-served or under-served insofar as their intangible assets are concerned. To be sure, by skillfully and respectfully doing so carries a high probability of making clients happier and more satisfied and propel a firm to becoming a more lucrative differentiator in this expanding market space.
Again, by artfully and respectfully ‘getting under the skin of an existing or prospective client’ a clearer understanding can be achieved about which clients need and/or are (knowingly or unknowingly) seeking intangible asset related services. By having intangible asset services and expertise, at the ready, and understanding that specific (legal) ‘jobs’ client’s need/want to get done, there is a cascading probability that client
expectations will rise accordingly which will contribute to making those law firm that possess intangible asset expertise to become a market space leader.
An important factor toward achieving this lies in respectfully communicating the enduring characteristics of intangible assets to existing as well as prospective clients, i.e.,
- the irreversibility of the trend toward global economies that are increasingly dependent on – embedded with knowledge-based intangible assets, and
- the (global) universality of intangible assets that play a consistent, but rapidly rising role in business transactions, company value, and sources of revenue.
A special thanks to A.G. Lafley’s and Roger L. Martin’s newly published book ‘Playing To Win’ for providing inspiration for this post.
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