Am Law 100 Firms Make Strategic Plays for Lucrative Business Consultancy Markets

Am Law 100 firms are taking a play from the management consulting playbook by setting up subsidiaries aimed at providing business advice backed by legal know-how.

On Wednesday, Kilpatrick Townsend & Stockton launched KTS Strategies as a wholly owned subsidiary focused on assisting clients with both advocacy and business strategy across both state and federal governments. The foundation for the new business is Kilpatrick Townsend’s government relations team, which the firm said will serve clients as a part of KTS Strategies, but the subsidiary will also call on the expertise of the firm’s more than 650 attorneys and legal professionals across its offices globally.

The offering, said the firm, is “comprehensive policy and advocacy advice to national and international companies, governments, individuals, nonprofits, and coalitions on issues with high-stakes consequences.”

The creation of the subsidiary gives Kilpatrick “a lot more flexibility to be to be nimble in our representation,” said Ches McDowell, senior managing director of the subsidiary.

While focused on lobbying and advocacy, McDowell said business strategy is an increasingly important component of the service for which clients are turning to their government relations people.

“Business strategy has always been a part of the law firm side, but companies are now looking for political insight in how to structure their companies or how to make decisions,” said McDowell. “You’re starting to see even more business decisions being influenced by politics, and us—being the folks that understand the politics and where the politics are going—advise businesses on the best way to structure their decisions.”

The KTS Strategies team includes registered lobbyists, lawyers and advisers resident in offices in Washington, D.C., Atlanta, and Raleigh and Winston-Salem, North Carolina.

The news comes a day after a similarly ranked Am Law 100 firm launched its own new business service.

Nelson Mullins Riley & Scarborough on Tuesday launched a compliance and regulatory consulting division aimed at giving financial services clients bespoke compliance solutions that will be overseen by the firm’s attorneys.

Branded as Assureg, the service aims to ensure regulated entities “understand risk and meet regulatory demands” critical to developing “sustainable strategies” by offering advice that “strengthens operational resilience,” according to a firm statement.

Assureg advisors are based in Washington, D.C., with additional offices in Atlanta, Denver, and Nashville, Tennessee.

Brad Rustin, chair of Nelson Mullins’ financial services regulatory practice, said the new service complements the firm’s traditional legal service offering and provides C-suite executives, general counsel, senior management and compliance professionals with “attorney-driven compliance and regulatory” advisory services.

With Assureg, Nelson Mullins is expanding the range of services that a law firm can provide into innovative areas. For instance, the subsidiary has data scientists that can analyze compliance data, as well as business consultants.

Rustin said a big trend in 2022 will be that regulators will continue to shine a harsh spotlight on bank and financial services mergers. In response, Rustin said, Assureg data analysts are gathering large quantities of data for their clients and distilling it, regression testing it and packaging it for firms to show the regulators ahead of a merger.

“This could cut the delay of a merger review from months down to a week,” he said.

Rustin said while Assureg is launching first in the financial services sector, it will soon offer services in other heavily regulated industries.

The firm had already seen marked success with similar ventures in the past. Nelson Mullins has an education subdivision called Education Counsel, launched in 2008, and an e-discovery subdivision called Encompass, launched in 2011 and led by John Martin.

Pivotal in Education Counsel’s founding was Richard Riley, secretary of education for two terms under Bill Clinton. Encompass is now one of the largest e-discovery practices in the U.S., according to the firm.

Deborah Farone, an expert in law firm marketing, said she anticipates the market will see more of these types of subsidiaries cropping up.

“It used to be that law firms would conglomerate work within an industry sector or within an area of law and call it a practice, but now there is a more sophisticated focus,” said Farone, who often consults with firms on these types of marketing issues, adding that firms are “carefully” looking at how these services are being packaged and delivered. “It’s a smart way of applying what we know from consumer-based marketing and applying it to professional services. These firms are interested in meeting their clients based on client need, not what the firm has to sell.”

Kent Zimmermann, a principal at the Zeughauser Group, said the Kilpatrick and Nelson developments were “smart,” riding a building wave in legal services.

“I say that because many firms have a growing appreciation of the benefits of scale. Many firms also have a growing appreciation of charging not just for time, but for value,” said Zimmermann. “Alternative models like these help firms do both. It helps them both grow in scale and grow the percentage of their revenue for which clients are paying for value, rather than just for time. In addition, these growth vehicles help advance the achievement of the firm’s strategy by differentiating the firm’s offering to clients of strategic importance.”

https://www.law.com/americanlawyer/2022/01/12/am-law-100-firms-make-strategic-plays-for-lucrative-business-consultancy-markets/

Zubair Q Britania

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