What Clients Want: Introductions to Other Clients
Here's one more way for your firm to stand out: play matchmaker.
Whether it's through their branding, discounted rates, or provocative tweets, law firms are constantly trying to show what sets their firm apart from the rest of the marketplace. Here's one more way to stand out: introducing your clients to one another. While it may seem somewhat counterintuitive and raise concerns about attorney-client privilege, playing social intermediary is what one iconoclastic and aggressive client wants.
Daniel Weintraub is the general counsel and a managing director of the Boston-based Audax Group. A Bain spin-off, Audax invests in middle-market companies. Weintraub's legal department of six lawyers (and one law firm secondee) manages the legal work for Audax's private equity, mezzanine and senior debt businesses, including managing 70 private equity M&A transactions in 2012 and overseeing the legal needs for more than 35 PE portfolio companies.
A former Ropes & Gray associate, Weintraub puts the hard sell on his outside firms—current and prospective—to make introductions to companies that could be "great business partners" to Audax. "I have a number of dollars to spend in legal services every year. If I can fulfill that spend with firms that help us grow" and provide high-quality legal work, "then why not use those firms?" he asks. Weintraub has been making this pitch for the last seven years, and he reports that a "number" of firms have introduced their clients to Audax. Typically these are smaller or mid-market firms. Weintraub says that on average he takes a pitch meeting from a firm once a week. Within the first five minutes, he tells the lawyers that he wants information, introductions and invitations. Weintraub wants information about the type of work the firm does that would be complementary with Audax's many investments. He wants introductions to potential Audax suppliers, customers and acquisition candidates. And he wants invitations, such as the opportunity for Audax executives to speak at industry events. "If I'm meeting with a firm, I assume they're good enough to provide the legal services I need, but I also need to know what differentiates them from their peers," Weintraub says.
Inevitably, there's the potential for conflicts. Suppose a firm introduces a client to Audax, and both businesses want to do a deal. The firm can typically only represent one side. Weintraub acknowledges that this tricky situation can occur, but he says the larger point is having a "holistic" relationship with outside counsel. "We're building a partnership with a firm," he says. These connections are what "separate law firms from our other suppliers."
And what do the firms get in return for making these connections? More work, says Weintraub. There's no quid pro quo, he stresses. Audax has a fiduciary duty to find the best legal services at the most competitive prices. But at the end of the day, those introductions matter. "We like to partner with law firms that help us do our business," Weintraub adds. Here's one client who is explicit about what he wants from his outside counsel. Thumbing through your firm's client roster and exploring which clients might also want to meet each other isn't a bad idea. It's one more way to set your firm apart.