Striking out

A 23-year-old became the most sought-after baseball player last year when he announced he would leave Japan to play in the US. Shohei Ohtani was already a phenomenon. Able to pitch and hit – a skillset as rare as hens’ teeth in the game and infinitely more prized – league rules limiting his initial pay guaranteed whichever team landed him an absolute bargain.

The intrigue intensified when Ohtani’s agent sent all 30 Major League teams a list of questions he wanted answered in English and Japanese, from which just seven were asked to deliver a two-hour presentation. At the end, Ohtani made the surprise decision to sign with the Los Angeles Angels.

The process drew controversy from some quarters, leaving pundits to ponder which teams did well and where others might have gone wrong. It is a feeling that will be familiar to law firms and in-house legal counsel, whose careers are often dominated by the grind of resource-heavy adviser panel reviews.

With this in mind, The In-House Lawyer canvassed general counsel for stories of particularly poor pitching techniques, common mistakes law firms make and what they look for in a beauty parade. It turns out losing a lucrative panel spot can be as simple as sending documents via the wrong delivery company.

‘Absolutely furious’

Pearson GC Bjarne Tellmann has written a book on in-house law, Building an Outstanding Legal Team – Battle-Tested Strategies from a General Counsel, which features an entire chapter devoted to the panel review process. He recalls a time when one law firm lost a bid because of who the partners focused their attention on during the interview – a classic fail that a number of GCs cite.

‘One group of partners spent the entire interview with their backs to the female counsel on our team who was tasked with making the decision, addressing only myself. That was a mistake on many levels.’

Conversations about what GCs look for in a potential external legal adviser inevitably boil down to the perennial question of whether a pitching firm would be a good cultural fit. Good listeners and whether you get on with each other are cited as important factors. After all, many clients say there is an oversupply of firms with technical expertise, which gives GCs the luxury of looking for something extra.

As William Hill GC Michael Leadbeater puts it: ‘Put me on a tube to Moorgate in a blindfold and tell me to walk until I hit a glass door, and anywhere that I stop there will be a good law firm.’

A firm used a rival company to deliver us their bid for a place on the Royal Mail panel.
Maaike de Bie, Royal Mail

This emphasis on culture is what Roche UK GC and head of financial compliance Funke Abimbola looks for in all firms during its panel review process, and which a couple of years ago led to what she describes as a ‘shocking’ story, which ruled out any future work.

Abimbola requires firms to sign up to the Law Society’s Diversity and Inclusion Charter, and asks for diversity data on a workplace. Some firms did not respond and were excluded, while a partner at a firm that failed to make Roche’s shortlist because of its lack of diversity took exception. The firm advised other parts of Roche internationally and the partner felt it should have been a shoo-in for the UK, so the partner emailed the manager Abimbola was working with, denigrating other firms in that area of law while claiming his was the only true expert.

He also said he was going to speak to Roche’s group GC and ask him to put pressure on Abimbola to allow his firm to come and present – all information the manager sent on to her.

‘I was absolutely furious on so many levels. We had provided feedback to their business development team and I said that under no circumstances would that firm ever have a place on our panel.’

Someone more senior at the firm contacted her to apologise and she says the firm had done a lot more to address diversity since, but Abimbola has stayed true to her word.

Issues around diversity regularly crop up in stories of bad pitches, with many GCs suggesting some firms are doing a lot more than others in the area, while some were not taking it seriously at all.

One senior GC with nearly 20 years’ experience recalls an instance when a firm’s pitch went horribly wrong because it appeared to be paying lip service.

‘If someone is serious about diversity, you need to make sure the people doing the pitch not only say it but reflect it. They regarded it as a hoop to go through rather than something that we were genuinely interested in. That really put people’s backs up.’

If sensitive areas cause a range of views, it is perhaps surprising that firms so often fall down on standard process and logistics. For Royal Mail Group GC Maaike de Bie, firms were asked to answer questions in a specific order to make it easier to assess each pitch, given the volume of documents it expected to receive. One firm, however, completely ignored the request.

‘It made us think, would they take our instructions, or would they just tell us what they thought would be important?’

I’m terribly pleased for them, but how much money a partner makes is not a good way to sell your wares.
Rob Booth, The Crown Estate

The Crown Estate general counsel and company secretary Rob Booth, meanwhile, recalls a time one City firm made continued references to its own strategy when asked why they wanted a mandate, rather than how it would fit with The Crown Estate’s strategy. ‘I want to know that they are focused on delivering a competitive advantage for my business, not that I am the sort of client they want to act for.’

Similarly, a regional firm pitching to The Crown Estate was overly negative about its competitors when asked why it stood out. Booth argues that firms should be confident enough in their own performance without having to talk competitors down. ‘My business doesn’t pitch that way and I don’t want my partner organisations to do it either. I’m also expecting collaboration between my firms on a regular basis, and that tone doesn’t inspire confidence that they will do that in the open and respectful way needed.’

Of course, confidence can be a good thing for pitches. William Hill’s Leadbeater recalls a time a Magic Circle firm sent a couple of impressive partners to a pitch meeting and, to his surprise, told him the firm only wanted the company’s big-ticket M&A work. The surprise was also met with respect for what was seen as a gutsy move when most firms take the opportunity to show off all their wares. The firm said it would not waste William Hill’s time talking about intellectual property and other areas when it knew it was going to be more expensive than, say, Addleshaw Goddard or Pinsent Masons, and the company was unlikely to use it for this work.

‘They literally said: “We think our sweet spot is M&A. We’re happy to sit on your panel for five years until something happens and for a business like yours, something will happen within five years.” Our reaction was: “OK, wow… if that’s your pitch, fair play to you.”’

That said, the firm did not make it onto William Hill’s panel.

Boilerplates

Another common gripe for GCs was mistakes law firms made that at the time may not have seemed obvious but in hindsight demonstrated sloppiness and complacency. An anecdote from de Bie sums up how easy it can be to rule yourself out before a word of a pitch document is read. ‘A firm used a rival company to deliver us their bid for a place on the Royal Mail panel.’

Booth says one City firm pulled out of a review process just before the interview and, although apologetic, failed to realise it was not just one less pitch to consider, but a missed opportunity for another firm that wanted the mandate to be given the chance to pitch. ‘That’s a black mark for future pitch opportunities as firms need to be prepared to have a grown-up conversation with us at the outset of a process, not once we have delivered a detailed shortlisting exercise.’

Another instance that stands out for Booth was when a City firm’s real estate practice head used profit per equity partner as evidence for the performance of its real estate practice, an immediate turn-off. ‘I’m terribly pleased for them, but how much money a partner makes is not a good way to sell your wares.’

While these are striking failures of common sense, even if those pitch documents do get read, further problems are often encountered almost immediately. Several GCs talked about the importance of getting the pitch document right, with criticisms ranging from them being too long to being too legal.

Leadbeater recalls one leading London firm sending a proposal document that set out extensive experience completely irrelevant to his company, suggesting the pitch had been generated via boilerplate.

He comments: ‘When you’re reading nine or ten pitch documents that are often very extensive, it’s hard work, and the easier they are to read and the more relevant they are, the more likely they are to impress because you’re not going to sit and read them like a book.’

Leadbeater cites a 70-page booklet produced by Eversheds Sutherland, immediately close to hand at his desk during this interview, which he said ‘blew me away’ thanks to its slick presentation. He admits the ‘snazziest’ documents are the most impressive, even if ‘we’re not buying documents, we’re buying legal services’.

KFC owner Yum! Brands’ European legal director Sarah Nelson Smith says pitch documents can be ridiculously long, but it is easy to tell who has nailed the brief. Some firms were still in denial about the need to think about producing a ‘KFC document’ rather than a ‘law firm document’ and how powerful the use of graphics could be.

The more thoughtful the pitch, the more we think we’ll get
a value-add from that firm.
Charlotte Heiss, RSA

RSA group chief legal officer and company secretary Charlotte Heiss was another to cite how effective advisers properly tailor pitches to the insurance multinational. Good pitches set out the firm and team credentials but also give perspective on what they think the short and medium-term challenges are for RSA. ‘The more thoughtful this is, the more we think we might get a value-add service from that firm. When done badly, a firm simply rolls out a generic pitch.’

One prominent GC had also seen pitch documents from firms that had been sent to external consultants to do most of the writing.

‘They’d probably be surprised at how much that’s transparent to the internal organisation. You hear on the grapevine that you might be asking for a response from X firm, but it’s all being generated somewhere else.’

Booth concurs, saying The Crown Estate’s tenders are extremely detailed on strategy, panel approach and activity, and that there have been many firms who have shot themselves in the foot for not reading and using it. ‘If I wanted a generic pitch that was written by their business development team, I would ask for it. We want a personal and aligned pitch that seeks to take the information provided and present it as a delivery model. It’s really frustrating when firms don’t get that and we put it on a plate for them.’

Complacency from incumbent firms is seen by many GCs and is the source of another particular example of poor performance witnessed by Abimbola. A firm on Roche’s UK panel had already been providing poor service levels and she pondered not even inviting them to pitch, but offered the firm an opportunity for redemption.

However, the firm immediately gave a lacklustre interview. Abimbola brought colleagues to presentations to guard against bias, but the firm was unanimously scored the worst out of all those presenting in that area.

‘The other firms were head and shoulders above them.’

This complacency meant the firm missed out on reappointment, which came as a shock and surprise, and has since meant the firm missed out on larger slices of work.

‘We felt we couldn’t be that important to them as a client if they couldn’t even be bothered. Maybe for that area of work we aren’t a big enough client for them, but other firms were only too happy for us to become their client and they’ve been able to increase the work we give them because of that.’

Gut instinct

Despite the familiar anecdotes of pitches gone wrong, many GCs were generally complimentary of how law firms handle panel reviews. Indeed, it is widely conceded that the sophistication of law firms’ pitches has materially improved over the last decade.

For some, a firm’s cost was far from the determining factor and many emphasised the importance of everyone’s favourite buzzword, innovation, as well as the ability to show an in-depth understanding of a business.

GCs are increasingly asked for advice from their bosses that has nothing to do with law and more to do with strategy and communications, a concept law firms are coming around to.

One of Roche’s external partners does a lot of horizon scanning for the company, sending it regular reports on areas of law and how it could affect the business, while one firm’s use of a video for its pitch presentation drew praise.

The days of clients wanting to just talk to the lawyers are gone, with many wanting to now meet the people dealing with the same technological issues that come with running legal functions, such as innovation heads, business development managers and IT directors.

Other things GCs keep a keen eye on include the dynamic of the team that comes to present – the presence of important members of a firm, whether partners brought along associates who were allowed to speak, how the partners and associates got on with each other.

A winning firm on Pearson’s panel allowed an associate to answer the most important question Tellmann posed during the interviews: ‘Out of all the good firms we have met, why should we select yours?’

‘Allowing the eloquent young associate to answer that question said a lot about the firm’s culture and its level of trust in its associates. You want to meet the people who will actually be doing the work.’

For the Japanese baseball player who picked the Angels, little evidence has emerged as to why he picked that team or shunned others. His agent put it down to Ohtani feeling he had a ‘true bond’ with the Angels and that other factors, such as the franchise’s market size, time zone and league it played in, were less relevant. This after the player claimed to have read every page of every presentation and listened to every word of every meeting.

The same element of it just feeling right often ultimately lands a firm a place on a panel. Leadbeater sums up his ultimate decision-making process as coming down to chemistry and how well firms understand a business, its sector and that the top 10% of advice is where the value comes from. ‘Ultimately they’ve not got much time to impress you. There’s a degree of gut instinct. If it came down to it, could I put you across the table from my chief executive?’

And in the age of the sophisticated pitch, that still remains the acid test for most GCs.

hamish.mcnicol@legalease.co.uk