In today's dynamic legal landscape, staying ahead of the curve is not just about providing top-notch legal services. It's about understanding your clients on a profound level and crafting a strategy that aligns with their needs. The sector-based approach is one such strategy that is gaining traction across the legal industry. But why should law firms consider this approach, and how can they embark on this transformative journey?

Why Should a Firm Consider a Sector-Based Approach?

This is an excellent question and an important one, particularly if law firms are approaching this as a strategic imperative versus a business development or marketing activity. Firms should consider a sector-based approach for three compelling reasons:

1. Client-Centric Focus: First and foremost, a sector-based approach is designed around the client. After all, it's the client companies that make up sectors/industries. So there is a shift in mindset from a firm-focused perspective to a client-centric conversation. It's about answering the question of how a law firm can best support clients in spotting opportunities and addressing pain points.

2. Effective Collaboration: Second, a sector-based approach is an effective collaboration framework. Collaboration is the gateway to higher-value matters, greater client loyalty, and increased firm profits. Fostering collaboration is achieved through a sector-specific strategy, which brings together lawyers from different practices and with different specializations with the sole purpose of helping solve problems for clients in a particular industry.

3. Competitive Advantage: It makes good business sense to understand a client's business, and it can give a law firm a huge competitive edge, particularly those willing to treat it as a strategic imperative. Once sectors, sub-sectors, and key clients within those have been identified, the roadmap for a law firm to target and position itself in front of those ideal audiences becomes all the more clear. Firms that have embraced this approach are consistently among the top-grossing in the world.

The strong "why" behind a sector approach prioritizes clients, brings together lawyer teams to collaboratively solve problems, and gives firms an edge in the marketplace.

How Can Law Firm Leaders Get Started? Where Do They Begin?

Once the "why" is answered, the "how" comes into play. It's critical to do some internal heavy lifting first. For that, we use a Design-Build-Run Framework.

• Design: This phase includes mapping the firm's entire client base to an industry classification system, conducting a SWOT analysis of the firm's sector strengths, and establishing a financial framework for incentives and compensation for industry/sector leaders, dedicated budgets for teams, and KPIs to measure success.

• Build: This involves identifying and appointing team leaders, recruiting working group members with industry expertise, and rolling out a firm-wide communications campaign that clearly articulates the "why" and "how" and offers opportunities for contributions.

• Run: Once the infrastructure is in place, industry teams are empowered and operationalized as functional business units responsible for going to market, driving demand, and delighting clients.

To design, build out, and run a holistic, enterprise-wide sector approach takes time, approximately 9-12 months for the internal infrastructure piece.

How Do You Go-to-Market with a Sector-Specific Strategy?

Once the internal infrastructure has been set up, it's time to go-to-market with a sector-specific strategy. We utilize the segmentation-targeting-positioning (STP) framework as a guide.

• Segment: Analyze which segments to prioritize and focus on, typically 3-5 max. Orrick, Herrington & Sutcliffe LLP's focus on tech, energy/infra, and finance is an excellent example of this approach.

• Target: Edge your investment toward attractive sub-industries within promising sectors. The more granular, the better. Kirkland & Ellis' focus on private equity within the broader financial sector is a successful example.

• Position: After fully understanding your buyers, their position in the industry, and their opportunities and pain points, position your products/services to be accretive to the client's business and solve their problems.

How Do You Measure Success?

There are several quantifiable metrics to gauge success:

• Percentage growth year over year in a particular industry

• Individual client revenue and profitability statistics

• Performance at the client level, such as the number of sustaining and growing clients year over year in a particular industry

• Track the number of cross-selling opportunities that have been realized by the industry program. Measure the percentage of clients who have engaged multiple practice areas within the firm

• Regularly survey clients within the industry program to gauge their satisfaction

• Assess the program's thought leadership recognition within the industry

• Document and share success stories and cases studies from clients within the industry program

Biggest Opportunities and Challenges

The biggest opportunities of implementing a sector-specific strategy include a client-centered focus and the framework it provides for involving specific lawyer teams within a law firm. It also facilitates lateral partner integration and a BD mentoring framework for partner-track counsel.

The biggest challenges include resource allocation and hesitancy to focus on a few sectors and sub-industries within them. But, remember, specificity paves the way for success.

In conclusion, Zig Ziglar said, "Don't become a wandering generality. Be a meaningful specific." Firms should be bold and get specific about sub-industries where they have significant strengths or compelling market opportunities. Specificity sets the #stage for success, stronger client relationships, greater collaboration, and a formidable competitive advantage.