by Greentarget
If the prospect of a publicly traded U.S. law firm seems unlikely, consider that more than five decades ago, there was no such thing as a publicly traded American investment bank. Due to a nearly 200-year-old rule requiring that the New York Stock Exchange approve all shareholders of its member firms, the NYSE didn’t allow them. But thanks to Dan Lufkin, who engineered the 1970 initial public offering of his investment banking and brokerage firm, Donaldson, Lufkin & Jenrette, the NYSE amended its rules and it’s now difficult to imagine the big Wall Street firms like Goldman or Morgan Stanley as private partnerships. But they were. Just like today’s big law firms.
According to William Cohan, who relays this story in his article, The Next Big I.P.O. Scramble, it may be only a matter of time before a bold and enterprising law firm follows in Lufkin’s radical footsteps and converts its private partnership into a public corporation – a structure that would provide greater access to capital, help streamline law-firm mergers and allow retiring partners to cash out their shares. Like the NYSE once prevented investment bank listings, most state bar associations still have rules against non-lawyer ownership of law firms. But that has begun to change.
Utah and Arizona have relaxed the American Bar Association rule barring nonlawyers from sharing in law firm ownership. To a fiercely competitive industry that has few options for raising capital, these changes could open a door to a source of affordable growth capital, a liquid market for partners’ equity, and a reliable method for determining a firm’s relative value in a highly acquisitive marketplace. The two states have granted a total of 91 licenses for alternative legal business entities, according to The American Lawyer. Once a major law firm walks through that door, many more could follow.
Skeptical? If the true story of the investment banking industry’s conversion isn’t a sufficient analog, the rapidly growing appetite for litigation finance, even among the legal industry’s biggest firms, is further evidence that law firms are eager to tap alternative sources of capital to fund their growth.
So if this potential shift becomes reality, law firms that take the IPO plunge will need to communicate frequently with an entirely new audience — public shareholders. And meeting shareholders’ demand for information will require significant, fundamental changes to how law firms share information with stakeholders.
What does this mean for you? Effective shareholder communication is not a switch you can flip on the first day of trading. If you harbor hope that your law firm will someday ring that iconic opening bell, plan to implement the following five tactics well before you file your registration statement. Doing so will support a successful IPO and enhance your ability to communicate effectively with your shareholders going forward, supporting quarterly earnings and other material disclosures, and ultimately an appropriate valuation.
1. Generate Pre-Filing Awareness
When contemplating a public offering, the way your firm communicates right now matters. Once you file your S-1, or registration statement, you can’t be perceived as promoting the offering as you prepare to begin trading. But you are permitted to continue sharing certain information about your business as you have in the past.
To establish an appropriate baseline, your external communication plan should include:
- Announcements of your involvement in major matters, litigation wins, and other noteworthy milestones
- Timely content conveying unique positions of authority from your firm’s partners and subject matter experts
- Media interviews that result in your partners’ appearance in the press, sharing points-of-view on issues that matter to clients
- Information about your firm’s social impact, e.g. pro bono and DEI initiatives
Chances are you’re already doing many of these things as part of your owned and earned media efforts. And of course, all of these activities are valuable and worthwhile even if the opportunity or desire to take your firm public never arises. But to set your firm up to communicate more freely throughout the process of going public, begin covering all these bases by ramping up your external comms strategies now.
2. Establish Metrics for Your Business
Partnerships are evaluated differently than publicly traded firms. The American Lawyer ranks its A-List firms based on these measurements: revenue per lawyer, associate satisfaction, diversity, pro bono initiatives, and the percentage of female equity partners. Firms rank on the AmLaw 100 according to self-disclosed or estimated figures like gross revenue, profits per partner, and revenue per lawyer. This will not satisfy Wall Street.
Law firms weighing IPOs should consider a mix of metrics that your shareholders demand – which would be similar to those disclosed by most listed companies (revenue, income, and earnings per share) – and those that you want your shareholders to track as well, such as realization rate, total billable hours and utilization rates, and client acquisition and attrition rates.
Regardless of which metrics you choose, you need to identify them before your offering, educate investors about their value and importance during the offering roadshow, and set up systems that allow you to track those metrics on a weekly basis. Weekly? Yes. Most newly public companies trade below their offering prices within six to nine months of the IPO, often because management lacks visibility into their own metrics. This can result in quarterly financial results falling short of expectations and surprising shareholders. And surprised shareholders sell stock.
Establishing the right metrics now — and tracking them weekly — is the best way to guard against a future market flop.
3. Identify Appropriate Comps
Investment bankers always look at comparable companies when valuing an IPO. And naturally, analysts and brokers will want research on other publicly traded firms like yours in order to better understand your performance and persuade their investors to bet on you. But until several law firms go public, it will be difficult for them to find the comps they’re looking for.
This is another area where being proactive matters. Look for publicly traded firms in industries with similar models, like consulting, to give analysts and investors the comps they’ll need to evaluate your business.
4. Adopt IPO Disclosure Policies and Procedures
As a law firm, you’ll likely have a leg up in understanding the regulatory landscape that listed companies must navigate, particularly regarding the disclosure of material information. But it’s still worth mentioning that once you’ve filed to go public, leadership and other members of the firm can no longer engage in casual conversations about financial performance and news that might impact your valuation.
According to SEC guidelines, anything your firm discloses to one person must be disclosed to everyone. And if you share material non-public information — even if it’s done unintentionally — you could be accused of enabling insider trading.
5. Ramp Up Internal Communications
When the time comes, it will also be essential to communicate openly with employees about your IPO and protect your firm from confidentiality breaches and legal liability.
Employees would need to understand:
- The rationale and business case for the IPO
- How the shift from a partnership model to a publicly traded model will impact them
- Specific guidelines regarding what they can and cannot say to outsiders about their work
- Guidance on how they should answer questions they’re asked about your IPO
- Examples of common confidentiality breaches (like sharing information with a spouse, friend or a colleague from another firm)
Keep in mind that going public would represent a significant organizational change. To win employee buy-in and support, you must be proactive about managing the change internally.
Going Public Requires a New Approach to Law Firm Communication
Embarking on an IPO could be an incredibly exciting, all-eyes-on-your-firm moment. To leverage the opportunity a public offering could present, you must start planning early.
But it’s not enough to launch successfully. You’d also have to sustain (and build on) your success quarter after quarter and year after year. And all the while, you need to communicate with a level of openness and transparency that might feel totally foreign.
You don’t have to make this leap alone. The Greentarget team has experience helping clients navigate the IPO landscape, and we speak the unique language of partnership-based law firms. So if your firm explores going public, we’d love to walk with you every step of the way.
If you’re looking for tangible ways to improve your PR or professional services firm’s commitment to diversity, equity, and inclusion (DEI), you’re not alone. DEI is a key business priority for a majority of C-suite executives and in-house counsel, according to Greentarget and Zeughauser Group’s 2022 State of DEI Content report — and the most frequently mentioned area where decision makers want guidance from their service providers is on how to recruit and retain diverse talent.
That report got me thinking about what leaders could learn from my perspective garnered from wearing various hats at Greentarget: a former intern, a current senior associate and intern coordinator, an Asian-American woman breaking into a historically and predominantly white industry, and — last but not least — a member of Gen Z who, like many of my peers, prioritizes the social impact of my work and the inclusive values of my employer.
Two years ago, I navigated a remote internship with Greentarget in the midst of the pandemic. Last summer, I returned for an in-person internship. And today, not only am I an associate serving clients in the legal and professional services industries, with a focus on media relations — I’m also a coordinator on Greentarget’s intern team, responsible for recruiting, training, and overseeing our intern classes (whose seat I was in not too long ago), as well as expanding our diversity recruiting strategy and partnerships.
My internships played a direct role in influencing my decision to further my career in public relations at Greentarget, not only by giving me hands-on PR experience — but also by fostering a workplace with an authentic commitment to DEI, allowing me to envision myself as a team member, mentor, and leader whose perspective would be encouraged, rather than curtailed. And as value-oriented Gen Z professionals continue entering the job market, decision makers at professional services firms can and must take proactive steps to recruit and retain young talent.
1. Demonstrate an Authentic Commitment to DEI at Your Firm
Gen Z is the most diverse generation in American history. We actively tune into DEI conversations and want to work for organizations that align with our values. And we expect employers to go beyond the performative when it comes to creating a diverse, equitable, and inclusive atmosphere.
Tackling issues of diversity and inclusion is not easy, and it’s not about establishing quotas or simply boosting your numbers. Rather, it’s about creating a workplace culture where diverse talent wants to invest their professional energies. Getting started can feel intimidating, and DEI initiatives can and should be ongoing. But the good news is there are thoughtful ways to start embedding DEI into your culture that aren’t overly complicated or expensive.
At Greentarget, we started a book club that gives interns and employees an avenue to explore DEI-focused topics. Reading Minor Feelings, for example — an autobiography by Korean American author Cathy Park Hong — particularly resonated with me. Not only was I able to voice how my Asian-American identity has impacted me personally and professionally, but our whole team engaged in open discourse about the Asian-American psyche, and how we can be more culturally competent in the workplace.
If you’re looking to start a similar initiative at your firm, don’t be deterred by your level of understanding about a given identity or aspect of DEI. Initiatives like our book club are, after all, about education: providing a platform for your team to share their experiences, and actively listening for insights and opportunities to become a more socially conscious professional and person.
It’s also important to give interns a seat at the table, and for them to see employees from underrepresented backgrounds taking part in the business, including as decision makers. One way we do this is to invite interns to participate in many of the same professional learning opportunities that associates and leadership team members attend — from company-wide trainings on media relations and strategy, to brainstorms during which we discuss current events and explore new pitching angles. Of course, it’s also important for interns to see diverse employees in action, whether in client-facing roles or leading internal initiatives. Representation matters.
2. Elevate Diverse Voices Internally and Externally
It can be challenging for people of color and members of underrepresented groups to speak up and share ideas freely at work. And frankly, it can be especially intimidating to interact with powerful (often white male) senior executives.
This is as true for associates as it is for interns.
That’s why people in positions of power within your professional services firm should look for ways to open doors of opportunity and amplify diverse voices. This can be as simple as:
- Asking questions and truly listening to the answers
- Encouraging interns and young associates to share their ideas and giving them merit
- Staying curious about perspectives and lived experiences that differ from your own
- Seeking input about ways to improve your culture
- Offering one-on-one mentorship and support
It’s also important for your interns to see you promote diverse perspectives through your owned and earned media efforts. Greentarget is deliberate about representation on our own Insights page. We use it as a platform to amplify voices from across our entire organization, from our CEO to associates and interns.
The diverse employees at your firm have unique and compelling points of view that will resonate with your audience. Use your platform to make their voices heard.
3. Provide Interns Access to Meaningful Work
The best internships offer students a glimpse of what their professional futures could look like. So if you want your internship program to become a powerful recruiting tool that advances your DEI objectives, you need to give interns work they can be excited about.
From day one of my internships at Greentarget, I felt I was part of something bigger than myself. I was able to:
- Immerse myself in topics that matter to society as a whole — like tax law, healthcare/drug pricing, and labor/employment law
- Create a start-to-finish media campaign addressing corporate responses to the Black Lives Matter movement and present it to the entire company
- Interact with and learn from junior, mid-level, and senior members of the team
That’s not to say I didn’t also handle lower-level tasks as an intern. After all, I was there to learn the business from the ground up. But employers can elevate even menial tasks if you share the “why” behind each one. For example, I initially overlooked the importance of the media lists I assembled — but by educating my intern cohort on the media relations process and how our work shaped this process, my mentors at Greentarget illuminated the significance of a “simple” task like a media list.
4. Connect the Dots Between Your Firm and a Larger Societal Impact
The media and the PR industry help shape our understanding of the world around us, from business trends and political news to social issues. Consider what role the media has played in cultivating your awareness of the most pressing issues today — climate change, inflation, racial and gender inequality, presidential elections and geopolitical struggles happening halfway across the world?
When most people read a Washington Post article or watch a CNN segment, they probably don’t think about everything that occurred behind the scenes to produce those pieces. Before I entered the PR industry, I certainly didn’t. But PR professionals like us at Greentarget often play a key role in helping that work come together.
Reporters often say to me, “My reporting is only as good as my sources.” Journalists rely on trustworthy, expert authorities — lawyers, accountants, consultants, and more — to explain complex issues in straightforward language and provide credibility for the accuracy of their reporting. PR professionals may spend weeks, even months, cultivating the reporter-source relationship behind a three-sentence quote.
Over the two years since my initial internship with Greentarget, I gained an understanding of the end-to-end media relations process that has illuminated the value in even the most routine tasks. From helping a client articulate their unique perspective on a topic, sharing that perspective with reporters, coordinating and attending an in-depth interview, and eventually seeing our clients’ words from that discussion contribute to a tangible story, I see how my efforts contribute to the larger conversation.
So, how does this apply to you? To reach intern candidates who value the social impact of their work, highlight the larger results of their role. Remind them that when they do research to ensure the stories we pitch are rooted in fact, not fiction, we help fight fake news. And underscore the reality that when they secure a writing opportunity or a quote placement for a source with a diverse perspective, they’re giving that individual the opportunity to shape a broader public discourse.
As a PR firm with clients constantly grappling with big issues, part of our job is imbuing big stories with their insights — and interns play a foundational role in this process. Developing a media list of healthcare publications or researching energy tax credits might not seem all that exciting or meaningful. But that media list could be used to pitch a story on drug-pricing legislation affecting millions of Americans. That research might prepare an energy lawyer for an interview about sustainable financing that could help businesses or communities tap into programs aimed at reducing their carbon footprint.
Your interns and associates — especially those who are part of Gen Z — need to see a connection between their work and the most pressing social issues of our day. Being part of something bigger — something that’s driving progress and change — is a significant motivating force for my generation.
Create an Inclusive Culture Interns Want to Be Part Of
As an executive leader, you set the tone for your professional services firm. It’s up to you to establish diversity, equity, and inclusion as an organizational priority and empower your team to allocate the necessary time and resources to bring new initiatives to life.
Change won’t happen overnight, and making real strides will require sustained time and effort. But if you truly want to attract and retain a more diverse workforce: now’s the time to get started.
Challenge
When expert services and consulting firm Berkeley Research Group (BRG) tapped Greentarget to lead its third annual M&A disputes research campaign, the intense economic and geopolitical upheaval made it difficult to predict what the next month would bring—let alone how conditions might shape the landscape for the coming year. Russia had just invaded Ukraine. The conflict added to turmoil in financial and energy markets even as the global economy was still recovering from pandemic-era chaos.
Given the disruptive impact of those headwinds on global business and supply chains, Greentarget’s Research & Market Intelligence team decided to tackle that issue head-on by examining how those economic conditions were influencing global M&A disputes.
Providing independent analyses and expert testimony in these matters is a core BRG competency. Digging deeper into this research angle would demonstrate the firm’s expertise in the international M&A dispute landscape, and raise BRG’s profile among its target audience of disputes-focused lawyers and finance professionals.
But the headwinds were shifting quickly – so Greentarget needed to uncover insights that would still be meaningful and newsworthy several months later when the research published.
Solution
Greentarget’s research team devised a two-pronged approach that included both qualitative and quantitative elements: 12 one-on-one interviews and an online survey of 181 individuals.
During the qualitative portion of the campaign, Greentarget spoke with leading deal and dispute lawyers around the world, including in major financial hubs like Hong Kong, London and New York. BRG provided Greentarget full access to the interviewees, which helped the team explore each lawyer’s unique point of view and guide the direction of the conversation.
The research team used insights gleaned from those interviews to develop the survey, which included a combination of new questions and some from prior years for year-over-year comparisons in the report.
Survey respondents included dispute lawyers, corporate finance advisors, deal lawyers and private equity professionals working in Asia, Africa, the Middle East, Europe and North America – a mix of people from which no other survey captures insights.
The Content & Editorial team combined key findings and charts from the survey with the insights and quotes from the interviewees, weaving in analysis from BRG’s own thought leaders to create a distinctive, newsworthy research report that revealed new trends in M&A disputes. The forward-looking nature of the report also provided utility to readers by mapping out what respondents expected to see in 2023.
Results
The M&A Disputes Report 2022 cut through the noise of an oversaturated M&A media landscape, garnering high-quality coverage in several publications—despite publishing near the end of the year, when dealmakers are busiest.
Greentarget’s Media Relations team secured coverage in global business, legal and financial industry publications, such as Bloomberg, The American Lawyer and Private Equity News. A Legal Dive article on the research was among the publication’s most read of 2022.
The report drove 320 visitors to the BRG website within the first month of its publication and has been viewed over 560 times. The web page that hosted the report had a bounce rate of 38% on BRG’s website (rates between 26% and 40% are considered excellent), while web traffic increased generally. The biography page of a BRG director involved in the survey analysis saw a 14% increase in traffic. On social media, some LinkedIn posts had engagement rates of 5.1%, higher than BRG’s average 3.3% engagement rate on the platform.
BRG also used the report as a business development tool, presenting the data in webinars, client dinners and receptions and the Thought Leaders 4 Disputes Corporate Disputes Conference – a key industry event.
The M&A Disputes Report helped BRG thought leaders deepen their relationships with clients by providing them with data and analysis that directly impacts their practices.
Challenge
Northwestern University’s chemistry department (NUChem) came to Greentarget looking for ways to better promote its research, scientists, and resources. The goal was simple: Stay competitive for top faculty and students.
The department had more than enough talent, research prowess and pedagogical expertise to compete with the nation’s foremost chemistry departments, including MIT, CalTech, UChicago and Stanford. By fostering collaboration and supporting a diverse community of students and faculty members, the department had been at the forefront of scientific discovery for well over a century.
What NUChem didn’t have was a culture of publicizing that work to the next generation of STEM leaders or thriving businesses. So many of the institution’s breakthroughs were going underreported and uncredited. Academic leaders in the field knew the program was good — they just didn’t know how good.
Solution
When a client’s goal is to outperform its rivals, Greentarget starts there first. The initial proposal to NUChem underscored the importance of two types of research: primary research aimed at uncovering how students and faculty members viewed the department; and secondary research comparing NUChem’s reputation and promotional efforts against departments in close competition to be viewed by peers as the top chemistry department.
To help chemistry academics embrace the leading-edge marketing tactics Northwestern’s Kellogg School of Management was already known for, Greentarget then developed a comprehensive competitive assessment. Its findings revealed that the department’s aversion to self-promotion wasn’t a sentiment shared by its peers. In fact, many of the institutions NUChem competes with had robust PR and marketing programs in place actively demonstrating their authority.
But the program’s biggest shortcoming was social media. Not only did Northwestern’s five peer universities maintain an active presence across multiple social media platforms, but their individual chemistry departments did as well. This gave NUChem’s competitors the opportunity to solicit success stories from within their departments and share them with a wide audience. And as industry publications and associations covered these stories, NUChem’s competitors were able to amplify them on their own social channels. Their social media presence also enabled other departments to drive engagement among current students, alumni and faculty — a crucial step toward achieving world-class reach and influence.
Impact
By showing NUChem how their peers were winning the reputation battle — and crafting a unique social strategy on their behalf — the department was able to counter. In less than two months, NUChem’s LinkedIn audience went from zero to twice that of its closest competitor.
More importantly, chemistry leaders were the ones engaging, with professors and publications mentioning the department more than any other in the competitive set during the first month of the campaign. For academics with an ultimate goal of being the top chemistry program in the country, there was no better proof point than the attention and respect of their peers.
It’s no secret that law firm profits and productivity slipped last year, as 2021’s legal bonanza gave way to a more challenging stretch in which many firms found themselves with too many lawyers, and not enough work to go around.
Demand for legal services dropped 1.9% in 2022 compared to 2021, while expenses increased 7.9%, according to Wells Fargo’s Legal Specialty Group. Some law firms have already laid off lawyers and staff, while others may be considering reductions.
Last year, when the war for lateral talent still raged, we recommended that firms emphasize culture over profits in their legal media interviews as a way stand out in an environment where strong financial performance was the rule.
But as legal demand dries up while expenses climb, law firms need to adjust their messaging accordingly. Below, we outline considerations as firms prepare for those discussions.
What to Expect During the Interview
Economic uncertainty continues dominating headlines and will be a recurring theme in conversations between legal media and law firm leadership. Expect questions about how your firm plans to navigate the unpredictable financial environment in the coming year, from reining in expenses and headcount to balancing fiscal restraint with the need to invest in technology and talent.
With law firm mergers gaining momentum after a pandemic-era dip, legal reporters may ask whether your firm is open to a combination to grow headcount, expand its regional footprint and/or expand capabilities. Smaller firms and those with softening financial results should prepare for questions about potentially being acquired by larger or more prosperous firms.
The legal media knows your firm’s expenses increased last year, but you can talk about how they grew in 2022 and how you plan to manage them in 2023. On a more granular level, expect journalists to ask how your firm dealt with overcapacity last year – and how it plans to address the issue in 2023. Are you instituting programs to fill lawyers’ unused time through expanded pro bono work or business development initiatives?
Headcount Reductions
Nobody wants to talk about this. However, the legal media has widely covered the firms that have already reduced their headcounts in 2022 and 2023, and reporters will not shy away from questions around this topic.
If your firm plans to lay off attorneys and staff, make sure to announce those reductions internally before discussing them with members of the media. Keep in mind that any memo sent to lawyers and staff will be leaked – so when drafting the announcement, have your external audiences in mind, too.
If your firm has already reduced its attorney or professional staff ranks, interviews can help contextualize those decisions by framing them around your firm’s overall 2022 performance and strategy for 2023.
Real Estate, Technology and DEI
Where and how lawyers work will also be top of mind. Hybrid and remote work continue to be topics of interest. Firms should expect questions about changes to in-office policies and whether they remain open to fully remote hires.
Reporters will likely ask about firms’ physical footprints, too. Firm leaders should plan to discuss any changes in office space, and the adoption of strategies like hoteling. If your firm has a hiring strategy for 2023, this interview offers a great place to share it with potential talent.
Leaders should also expect questions about their firms’ technology investments. Has your firm splashed out on new software or platforms in the past year? Does your firm plan to scale back technology spending in the coming year?
Prepare for questions about potential retrenchment in other areas – including diversity, equity and inclusion (DEI), which many firms prioritized after the social and racial reckoning of 2020. Reporters may ask about what measurable progress you made against those commitments last year, and whether your firm plans to cut or pause its DEI and/or talent development initiatives amid profit pressures. Consider sharing your organization’s DEI targets and how you plan to meet those goals in the coming year.
Reflect on 2022 – And Map Out What’s Next
When preparing your talking points about 2022, think about how you would characterize the year at a macro level. Be prepared to talk about the practices, regions and industries that drove growth last year, and where your firm saw shifts in demand. This is a great opportunity to discuss notable matters from 2022, so ensure you have those details on hand.
During these interviews, firm leaders can discuss their strategy for 2023. Any major investments your firm plans for the year – office openings, new practice group focus, ancillary practices – should be shared here if possible.
Explain where the firm will focus this year in terms of practices and initiatives, as well as areas where you will be creating efficiencies. Where do you anticipate increased demand? Leaders should plan to talk about practices that may be ripe for growth, such as bankruptcy and restructuring, data privacy and security and regulatory.
With the economic outlook for the legal industry still uncertain, firms can find value in being transparent about financial results, strategic plans and cultural considerations – topics that will resonate with current employees and potential talent.
