The New Power Differentiator

I make no bones about the fact that I am an unabashed believer in the power of market leadership for professional service firms (as well as for all kinds of other companies). Good things happen to market leaders, and dog crap happens to those who are not.

Market leaders attract the best clients, the best professionals, and are able to charge the best rates. And, most people prefer to associate with winners, rather than with also rans. Because of the many benefits of market leadership, attaining and maintaining market leadership is worth the considerable effort needed to make it happen.

Since clients hire me to help them build sustainable market leaders, I am continuously looking for the latest trends that can impact market leadership in a given market segment. As you can read in the postings on this blog, I am seeing a ton of changes occurring in the Restructuring world that will impact what makes a given professional service firm a market leader.

I see an emerging trend that client and matter selectivity will be a power differentiator. The kind of differentiator that can contribute to market leadership. Now, client and matter selectivity has always been important. But, I am increasingly convinced that such selectivity will be a top five contributor to attaining and maintaining market leadership for lawyers, turnaround firms, investment bankers, etc.

With so many cases being played out on the “liquidate and litigate” format, opportunities abound for all kinds of professionals to have a case turn into a financial DISASTER.

Note that is "DISASTER" with capital letters!

Equally importantly, financial disaster will often be accompanies by reputational damage.

Those who will be market leaders for the (long) duration of this downturn will be firms who (1) are able to instill in their partners the importance of this issue, and (2) put in place the processes to safeguard against a front line partner being negligent in their assessment of the financial prospects of the case.

Interestingly...assessing payment probabilities becomes as important as one's substantive expertise.

Some will say that this is nothing new. I would suggest that assessing probabilities has gotten a whole lot tougher at a time when many of us are having difficulty seeing clearly because of the mind numbing pace of change. And, never has there been more pressure on front line partners to bring in business.

Opportunities abound for failed judgments with million dollar+ consequences.

In the words of that famous Disney tune from Aladdin, it is a "Whole New World."