Major law firms in the United States should be commended. Despite their clients' hard-fought efforts, these firms appear to be immune from and unscathed by the fundamental rules of supply and demand. Indeed, as the number of major law firms has surged in cities across the United States, and the demand for outside legal services has decreased, billable hourly rates have continued to rise. While this distortion of the basic rules of economics seems to be permanent, like all bubbles it will eventually correct. When it does, law firms, especially Big Law firms, will be under intense pressure to reduce rates. To avoid this result, law firms that want to remain top-tier (and continue to bill at or above their current rates) will need to differentiate themselves from their competitors, and the best way for them to do so is by clearly and convincingly demonstrating to their clients that they understand their goals and, most important, are fully prepared to help advance these goals.

Know Your Client

While it seems simple, law firms sometimes fail to learn their clients' industries, competitive needs, and the legal and regulatory issues they are facing on a daily basis. This inexcusable ignorance, if unabated, will eventually cost law firms business. To avoid this result, certain required information needs to be continuously reviewed and discussed.

First, if a client is a publicly traded company, its outside counsel, regardless of their practice area, should be reading all of the client's public filings. These filings, whether an annual report, proxy or a periodic 8K, provide a treasure trove of information regarding a client's legal and regulatory issues. From disclosures on pending environmental liabilities to concerns around capital structure to divestment strategy, public filings provide an incredibly helpful overview of a client's legal needs in the coming months and years.

Press releases also provide invaluable insight into a client's activities. At their core, press releases are the most common forum used by a company to shout to the world, “Look at me.” If a company finds an issue, event or accomplishment so important that they want to issue a press release, shouldn't their outside counsel—their most trusted advisers—also be aware of it?

In addition to reading public filings and press releases, a law firm expecting to successfully retain a client should also be aware of the client's advocacy efforts and community activities. If a company is dedicating its scarce time and financial resources to an industry or community initiative, it's probably incredibly important to that company's C-suite and board of directors. And if it's important to this influential constituency, shouldn't a company's outside counsel also consider these matters significant, and possibly support these efforts?

Know Your Client's Goals

Even if outside counsel know and understand a client's industry and its legal and regulatory needs, this is insufficient to keep and retain the client long-term in today's competitive market. To ensure a multi-year, productive and profitable relationship, outside counsel must also understand why, when and how clients will seek their services, and the only way to find out this pivotal information is by asking questions. All lawyers like to speak, but successful lawyers love to listen.

Asking simple questions—what keeps you up at night or what gaps do you have in your legal department that you typically turn to outside counsel to address—will give outside counsel a clear informational advantage over their peers when competing for work, responding to an RFP, or preparing for a pitch. As any salesperson knows, the secret of any successful business development effort is to talk less and listen more.

Advance Your Client's Goals

Outside counsel who build and maintain strong relationships with their clients know their fundamental goal is to understand and help alleviate the myriad pressures on their clients. For example, successful outside counsel appreciate that as a cost center, financial certainty is of paramount importance for in-house counsel. As such, any type of surprise, whether financial or otherwise, will never be well received. Therefore, whenever possible, effective outside counsel will always be proactive in providing updates, and informing the client of key deadlines and milestones and options. As the expert who has negotiated more deals or tried more cases than their client, outside counsel always has the responsibility to identify pitfalls, challenges, and where matters may go sideways.

In addition to the company's goals, outside counsel should also be attuned to their client's personal goals. For example, practicing in-house lawyers can sometimes feel isolated from the legal community at large. For this reason, if outside counsel can introduce their clients to each other, the benefits can be two-fold—first, outside counsel is helping their in-house clients network with colleagues in the same industry, and second, a group of people have been brought together who have in common their positive experience with the outside lawyer who brought them together. Another example where outside counsel can assist their individual client's goals is by helping them understand different areas of law. Throughout their career, many in-house lawyers will assume new roles, which may require different skill sets and legal knowledge. If outside counsel can make this transition a little bit smoother by offering their expertise via a continuing legal education presentation or otherwise, this is a favor that will not soon be forgotten.

Andrew C. Gratz is associate general counsel for commercial and strategic transactions at LyondellBasell.