Bithika Anand and Jogesh Sharma discuss how lawyers can become trusted advisers
Clients these days look for law firms that can guide them in making business decisions from a holistic perspective. The expectations of clients from their lawyers to operate like business advisers has grown tremendously. The observed trend is that law firms are increasingly expected to work closely with clients and be more involved in their business. This is in contrast with the practice followed about two decades ago where lawyers only highlighted issues for clients to work upon, rather than delivering solutions packed with business acumen and industry knowledge.
To live up to the changing expectations of clients, law firms need to deep dive and understand the client’s ecosystem and business environment before advising them on complex legal and business issues. Instead of limiting their role to provide purely legal solutions, deal maker law firms are adopting an approach of offering commercial-legal solutions. Law firms are now kept at the forefront unlike the past where they were considered as back-end support and called for support when vulnerable situations arose. Their upfront involvement on deals and commercial transactions is sought with an aim to mitigate risk and increase the scope of a favourable outcome. Involving lawyers from the initial stages enables them to deliver excellent quality output due to their holistic involvement in the realm of the client’s businesses.
But what does it take to develop a successful deal maker? Apart from a sophisticated set of interpersonal and organizational skills and industry insights, what does it take to crack deal after deal?
The foremost aspect that has become imperative over a period of time is for law firms to step into the client’s shoes to deliver strategic advice tied with business interest. We have examined above that the perspective of the law firm’s practice has become more about executing the client’s business rather delivering advice from a legal perspective. There are five essential elements to become a successful deal maker:
- Insight about the client’s industry and its objectives. It is imperative to know the ecosystem in which the client operates its business. Knowledge of the client’s macro-level vision, strategic plan, line of its goods and services, competitors, peers, etc. is very essential to understand the working environment within which a client operates. It is also important to learn how the business itself operates, its work flows, flow of funding, leadership, multilevel decision-making processes, along with the individual and collective agendas within departmental and organizational groupings.
- Understanding the risk involved. Deals are all about risk management. While mitigating the risk it is important to evaluate the opportunity and danger, and in this process, we should ensure that all possibilities are being mapped. It is imperative to learn that risk avoidance is not the goal of every deal. Rather it should be measured, accepted and taken ahead. Risk prevails in every segment and in almost every activity. Upon learning to map, evaluate and strategize the process of managing risk, we will be well on our way to becoming an effective deal maker.
- Reading financial statements. Another important requisite to become a successful deal maker is to develop the skill of reading, understanding and analysing the financial statements along with contractual documents. The ability to evaluate such documents and translate them into words and concepts that lay businesspeople can readily understand will enhance your grasp over the deal and increase the scope of winning it.
- Efficient and effective negotiation. Negotiations are usually not won by people who speak the fastest, scream the loudest, or get in the last word. Knowing what all sides to the deal care about most is the crucial factor. And listening is the most important skill. In the same manner, we need to be able to express what is important to us and why we need it without being intimidating.
- Thinking out of the box. An ability to think creatively and innovate legal strategies while keeping in mind the business perspective is an essential facet to becoming a successful deal maker. Law firms going beyond the traditional methodologies of deal handling and bringing out-of-the-box strategies to handle the deal have a higher chance of winning the deal.
In a nutshell, being a deal maker lawyer is beyond having legal acumen and business sense. A deal maker has to possess sound inter-personal skills, demonstrate patience during negotiations and exhibit assertiveness with a right balance of being able to understand and express. Deal maker law firms are a complete package on which the clients can rely end-to-end, and not just at the time of executing a deal.
Bithika Anand is founder and CEO and Jogesh Sharma is associate vice president for strategic management and process redesigning at Legal League Consulting.