Seven Reasons Why Industry Groups Fail

Many law firms have created an industry group structure that failed miserably.  Not surprisingly the failure is not in the concept but in its execution.

What lawyers view as legal problems, clients see as business problems that may have a legal solution.  As a result, from a client perspective, it makes more sense to shop for lawyers by industry knowledge than by legal specialty.  Accordingly, perceptive law firms have been quick to create a series of industry groups to make themselves more attractive to clients.  Unfortunately firms tend to view industry groups as marketing platforms rather than as a means of providing needed services.  Specifically, that approach often presents itself in the following seven common mistakes that cause industry group structures to fail:

1. Too many groups.  The list of industry groups on many large law firms’ websites looks like the SIC directory and includes every conceivable industry.  Firms sabotage their own credibility with clients by pretending to have a breath of expertise that no law firm could possible possess.
2. Groups that are too broad.  Clients that make silicone chips have nothing in common with companies that make cars, but law firms keep creating “Manufacturing” industry groups.  The key is finding industry definitions that reflect the firm’s actual client base and experience.
3. Lack of actual business knowledge.  Experience in doing transactions for or handling litigation involving specific industries is valuable.  But clients are looking for more.  They want lawyers that have at least a basic knowledge of the economics and competitive structure of their businesses.
4. Not being active in trade associations.  Especially for mid-sized and smaller companies, trade associations represent an important lifeline.  Active participation in trade associations provides law firms with the dual advantages of being able to build their expertise while hanging out where the potential clients are.
5. Not demonstrating expertise.  Any firm can put a paragraph about an industry on its website and pretend to be an expert.  Writing articles or speaking at trade events on industry topics builds credibility and name recognition within an industry.
6. Lack of practice breath within an industry.  Clients that come to a law firm because of its industry knowledge expect their industry experience to extend over a range of necessary legal specialties.  Sucessful industry groups are narrow in their industry focus but broad in their practice capabilities.
7. Slow reaction to industry news.  Clients coming to an industry group expect their law firm to be an industry insider.  The best way to do that is to be the first to advise clients on breaking industry news.  A simple client email within 24 hours of an important regulatory change affecting an industry screams industry knowledge much more than a well-crafted formal newsletter a month later.