Befriending Your Competition — A Good Idea?

Our instinct is to view our competition as the enemy — a force to be vanquished.

And of course there is a logic to this view. After all, you could assume there is a finite amount of legal work in your slice of industry and whatever your competition gets doesn’t go to you. But there are a bunch of holes in maintaining that view. Here are some holes and I bet you could think of others:

First, as a law firm, what is your competition?  It’s a bunch of lawyers — just like your firm. Your best way of beating the competition might be to hire them into your firm!  Or — dare I say — joining the competition’s firm!  This certainly blurs the lines, doesn’t it?

Second, it is not always a zero-sum game for legal work. You may find that by working together with a competitor lawyer you might create win/win ideas for your mutual clients and create upside for all parties involved.

Third, by having a heart-to-heart talk with your competitor, you may learn that there are things that she does super well that your firm doesn’t, and vice versa. You might start referring these non-competitive matters to each other.

Fourth, what happens to lawyers as their careers unfold?  Well, they can continue being lawyers. Or they could retire or die, I guess. Or they could go in-house. If and when this happens they — immediately — morph from competitor lawyers to potential clients, don’t they?  It would be kind of nice if you already had a relationship going wouldn’t it?

Fifth, sometimes you are conflicted out of a matter. Having your client pick your worst “enemy” as counsel is hardly what you want to happen. Wouldn’t it be “nice” to have a friendly competitor to refer your client to?  Especially a competitor would take good care of your client when you can’t do it due to the conflict.

Sixth, you can exchange great and useful data about your industry and what you are doing, career advice, best practices, and things like that, just to help each other. Even if you are uncomfortable referring things to each other and need to keep a bit at arms’ length, you can find all sorts of ways to be helpful to each other. I have done this many times and learned a great deal of useful intellectual capital.

Seventh, you are playing in the same sandbox. You have a common interest and are doing largely the same business. The odds are high — indeed a lot higher than you probably think — that to your surprise, you will make a friend. And no one can ever have too many friends.

Eighth, I suspect everyone who reads my column knows I have built my firm around the theme of “helping my clients build their businesses.”  This often involves connecting my clients with useful counterparties, and what better place to find these counterparties than from other lawyers. This creates a benefit for both my client and my competitor’s client. Everyone benefits and wins.

Ninth, and finally — of course I don’t hope this happens to you — but the odds are that at least once or twice your career will take a downturn and you may just need a job. It certainly has happened to me a couple of times. These erstwhile competitors could, and probably will, help you when you are down.

Lastly, here is a final note on this issue: if you follow my suggestion herein and reach out to your competitor — even your sworn enemy — you may be surprised, and even shocked, about how eager your competitor is to enjoy some détente and take you up on your lunch offer.

Are People Like Fish? And, What Does That Have To Do With Lawyer Marketing?

Have you ever watched a school of fish swim?  They always turn in the same direction at the same time. There was recently a study about this and it was determined that the fish are persuaded to move in one direction by certain “influencing” fish.  However, counterintuitively, the “influencing” fish was not one that was (friendly?) with a large, disparate bunch of other fish, and thereby itself influenced.  Instead, it turned out that if one fish (i.e., the “influencing” fish) was (friendly?) with a small group of other fish, then that small group would follow the “influencing” fish and once that happened, the whole school would follow along as well.

Anyway, assuming a group of people are like a school of fish — which is tongue in cheek, of course — all of this got me thinking about how the behavior of these fish might apply to marketing.  How would “influencing fish” create desired results?

If a large group of people were like fish, then the answer would be that instead of marketing to a wide group, your strategy should be to market to a very small group of people, and try to get that group in favor of whatever it is that you are trying to market or sell.  If you can achieve that, then you will likely achieve a larger dispersion in the end, i.e., once the small group accepts your marketing thesis, then the bigger group should as well.

Taking this to its logical conclusion, if you are trying to market something new, it seems like it is “very” hard to get anywhere if you have zero clients; however, if you have even a few influential and respected clients, it is dramatically easier to get more.

But are people like fish?

Without insulting my species, I think we are to some extent.  The reason is not that we are dumb like fish.  It is that we just don’t have time to evaluate every decision.  For example, there are probably 100 brands of toothpaste on the market, and from time to time I see them all there at CVS covering an entire aisle.  I don’t know about you, but I didn’t buy one of each and test them all out to find the “optimal toothpaste.”  Instead, I saw [insert favorite movie star] on TV brushing and smiling with white teeth and making clear he/she would get the girl/guy if that toothpaste were used.  That was probably enough for me 30 years ago and I haven’t switched brands or even thought about it since.

As another example, when an attorney retains local counsel for a first matter in a new jurisdiction or in a new industry, the first instinct is to look at what kinds of clients the proposed counsel has, and then to assume that these clients made a good choice in selecting counsel.  If the law firm in question has multiple “cool” clients that are similar to the clients the attorney already represents, that likely pushes the attorney — a lot — towards the decision in favor of that law firm.  Attorneys can hardly go visit each possible law firm — interview the lawyers, read the papers they have written, analyze their skill sets — and make a deep-dive determination, can they?

In both of these metaphors — toothpaste or counsel retention — the most critical issue is that the most effective result would be reliance on “multiple” sources, i.e., two or more movie stars pushing the toothpaste — or two or more “cool” clients that are similar to the clients an attorney already represents.  That would cement it most likely for the buyer as the optimal decision.

Having said all of this, if my life depended on the decision of which counsel to retain or which toothpaste to use, I probably would go through at least part of the deep dive described a couple of paragraphs above.

So, to conclude, of course we aren’t really like fish when we have a real decision of importance to make, but I suspect we aren’t that different when we don’t have time to really think things through and analyze the subtleties.  This means that if one is trying to achieve marketing success in a particular initiative, it is best to start with several “influencing fish” and work forward from that beginning place.

By the way, giving credit where credit is due, my daughter, who works for DeepMind (owned by Google’s parent company, Alphabet Inc.) in London, and who studies artificial intelligence, wrote to me about this and gave me the idea for this story.

Is Talent Analysis The Magic Key To Successful Real Estate Investing?

The front page of The Wall Street Journal’s Review section on March 24th – said the following in very large type:

The U.K. Is Doing Just Fine, Thanks

Hearkening back to July of 2016 – right after Brexit – there were many – and I mean many – that thought the U.K., and London in particular, would get nailed.  The fear was that everyone would move away and Britain would be screwed.

The Real Estate Philosopher’s article, dated July 11, 2016 was entitled Brexit and London and Talent, Oh My, and my main point – now about 20 months old – was exactly the opposite of the fears of the time.  I said in boldface type:

London Will be Just Fine! 

Okay, I was 100% right and (sorry to be a little bit humbuggish here) it is  important to examine why I was right.  My thinking at the time was as follows:

When you get right down to it, I don’t see the talent “wanting” to leave – uprooting their families to go where, exactly? There are other great cities in Europe for sure, but if your life is in London, I don’t see people eager to move somewhere else so easily. If you live in London and have family and business contacts there, your optimal first strategy is to figure out if there is a way to stick around.

And if the talented people that form the backbone of London’s financial expertise don’t actually leave then I am confident that everything will be just fine in the end for London. That talent will create the next upside, just as occurred in New York.

In a nutshell, my thesis was that the talent wouldn’t leave London and if the talent didn’t leave, then London would continue to be successful.  And that has now proved out.

Of course, readers of The Real Estate Philosopher don’t know this, but I made “exactly” the same prediction at my law firm’s annual outing at the end of 2008.  The only difference was that I made it for New York and not London.  At that time, the Global Financial Crisis was in full swing, panic was everywhere, and many thought it was “game over” for New York.  The financial world was in ruins, and everyone was blaming New Yorkers.  Even the real estate market crashed here.

But The Real Estate Philosopher said the same thing, i.e., that the talent won’t leave New York City, and if the talent doesn’t leave, then New York City will be just fine.  And that has been correct too – indeed, it is hard to find anything that hasn’t gone through the roof in NYC in the past ten years.

So I have now made the same prediction twice in a row, and in the face of widespread beliefs to the contrary.  Does that mean I am right in my thesis and you should listen to me now?

Of course not!  The graveyards are full of brilliant forecasters who got lucky a few times in a row and then it turned out to be pure luck.  I am the first to advise that you should take what I am saying with a grain of salt.

However, I do think that I am onto something here with my theory that real estate investors should have a Talent Meter as part of their checklist of underwriting a real estate deal.  The idea would be to gauge not just population growth and other demographic metrics, but also to gauge whether talented people are coming or going.  This would include considering how that location – i.e. the city or the location – can compete for talent with other places trying themselves to attract talent.

One way or another everyone is fighting for talented people.  Countries are doing it.  States in the U.S. are doing it.  So are cities.  So are universities and schools.  And so are companies and organizations of all kinds.

At our firm, our mission statement has been the following for about fifteen years.  It has stood us in good stead, and we have no intention to change it – ever:

Attract, train and retain talent – also known for short as “ATR” 

To conclude, my thinking is that the geographical locations that win the ATR wars will undoubtedly have the value of their real estate rise significantly, and the losers in the ATR wars will have the opposite result.

So consider developing your own Talent Meter to use when making your real estate investment decisions.