Managing Client Relationships as an Investment Banker, Lawyer or Consultant

covering clients is a learned skill it is not an innate skill and I remember when I was in your shoes I was worried when I started at Goldman Sachs that when I looked at the people who are really good at covering clients and really good at bringing in client's the so-called rain makers I was worried that maybe they're just born that way maybe they were just natural born salesman and sales women and what I found was that wasn't the case I have found over the years and early on actually that these are skills that you can learn if you're willing to learn them and what you should do is you should find somebody at the firm in which you work whether it's a consulting firm a law firm and investment bank accounting firm whatever it is find somebody who's really good at bringing in business at covering clients and learn as much as you can from that person be an open book put your ego aside and learn as much as you can I was fortunate and that I found something like that at Goldman Sachs and for the first two years I did everything I could to observe this person to be with him I worked on every transaction I could with him I carried his bags around it made Xeroxes fun I did whatever I could to help them and I said I just really want to learn from you and I would watch him sometimes in meetings and he would do things that I thought were wrong or I didn't make sense to me but I put my ego aside I said there's got to be a reason why he's doing this and as time went on I realized there was in every case and I started using the same the same strategies with prospective clients and clients and they worked and so to this day a good portion of what I do with clients a good portion of the skills a good portion of the strategies that I use with clients came from this this man and the rest is you know things that I added on my own over the years so find somebody was really good flattered the person say that to the look you're really good I want to learn from you is it okay if I just sit in on meetings with you is that okay if I work with you on some transact I'll do anything I'll make coffee for you or get lunch or or Xerox or whatever it takes and then be an open book put your ego aside approach it from the perspective of a clean slate and learn because you can learn these skills they are not innate they are learned skills so first piece of advice the second piece of advice I would give to you is the most common mistake that client coverage people make when they cover clients is that they don't become strategic advisors to their clients so what I mean by that they don't take the opportunity while they're working with the client they do not take the opportunity to start to advise the client on matters outside of the matter that they've been hired to work on so let me give you an example it's best to illustrate this piece of advice by giving an example from from my world so if you were a merger banker so a merger banker is someone who's been hired by a company to help them go through a merger let's say to buy another company so let's say you're a merger banker you've been hired by company a to buy Company B your clients company a you're gonna spend a ton of time with a CEO over six months to a year period working on that deal you were gonna spend all nighters of the CEO you're gonna be sequestered to conference rooms you're gonna get to know that CEO extremely well and you're gonna build hopefully a very good relationship with them most bankers do that and they do a good job on that merger transaction and then the transaction comes to a close they have a nice dinner they raise a glass closing dinner they'll toast the CEO deal closes and then they go away and then five years later there's another merger mandate company a is gonna buy Company C and the banker calls up to see you and says hey remember me we spent all that time together I did such a good job I see us or like no get in line we're gonna have a bake-off there's five firms coming in you can be one of the five you know we may hire you we may not the relationship is gone because what the banker did was they didn't take the opportunity while they were intimate with a client to become a strategic adviser to comply what I would do is I would start to engage that merger client on other matters I would say to the client while we're working on the merger transaction say you know I know a large portion of your revenues come from Japan you know two billion dollars of your revenues come from Japan the Japanese government has said that they are going to devalue their currency so that money that's coming into you in the form of yen is probably going to decrease in value have you ever thought about maybe hedging your exposure against the N because if it goes down by 10 percent you lose two billion two hundred million dollars on that two billion dollars of revenue that's interesting point Jim why don't I put together the currency hedging team and we'll have a discussion with you about what other clients have done it found helpful about hedging currency exposure overseas I might engage the client on Dancing mandate have you noticed that your competitors are raising financing in the debt markets right now because interest rates are slow so low and it's very cheap rather than using equity financing why don't we have you ever thought about using debt financing kind of put together the debt financing team we could have a discussion about that and then I'm not just a merger banker I'm a merger banker I'm a currency hedging expert I'm a capital markets banker and over the course of the six months that I'm intimate with a CEO my job is to become in everything banker to them right starts advising them on as much as possible and over the course of the relationship if I do a good job I'm not even just a financial advice on everything advice if they hurt their knee they're calling me up and saying hey good doctors you might recommend to fix my knee that's ideal well you know my daughter's applying a cop where do you think she should go you know that's that's becoming a strategic adviser to your client lawyers make this mistake bankers make this mistake accountants consultants make this take time in and time out I cannot tell how often I see it so if you're a lawyer working on an antitrust matter do a great job on that antitrust matter but use the opportunity while you're with the client to start to engage them on other things what their competitors are doing have you thought about me structuring this transaction different leads who minimize tax impact can we bring in our tax folks to talk to you about that use that opportunity to build relations very helpful for three reasons one you give the client better advice the more you know about the client you become a better adviser so the more stuff you're doing for the client the more you know the better advice you can give them because it's all intertwined if you're working on a merger mandate it's going to affect the ability to raise financing or hedge their currency or whatever it might be so you're gonna be able to give them better holistic advice the more you know secondly you box out the competition so in my case when that's when the CEO get the RAM of thinking about whether they should hedge their currency they're not having a bake-off and I'll bring it in ten currency hedging firms to help them know they're like no Jim's doing that for me because he's doing everything for me including helping me find a doctor to fix my knee right so you box out the competition no one can get in and then thirdly is you smooth out the cyclicality of these different practice areas that you might find yourself in if you're a merger banker or merger lawyer you know it's very exciting to be a merger banker right now or an M&A lawyer because interest rates are very low money is cheap there's a lot of activity going on guess what it doesn't stay that way right you feast or you starve and people are feasting right now in that area they're starving in other areas if you're in everything there everything Bank or everything Lord you acquired you smooth out cyclicality of those those individual business segments so when mergers are dead and interest rates are high you're working on maybe some bankruptcy work maybe you're working on more hedging work maybe you're working on financing work because financing becomes much more nuanced when you have high interest rates etc so secondly become a strategic adviser to your clients don't make the mistake that most people make which is work really hard on the mandate they have do a great job when the mandate is over you leave the relationship and then it decays over time and you don't have a relationship after a little while don't make that mistake third piece of advice is to listen and ask open-ended questions the most important quality and covering clients effectively is empathy the ability to put yourself in someone else's shoes so how do you achieve empathy how do you become empathetic you ask a lot of questions and ask open-ended questions so questions that don't lend themselves to yes/no answers so you don't say you know is it sunny outside now you say how do you like the weather outside and you'll get the client to talk more the more the client talks the more you learn believe it or not the better they feel I give a talk on interviewing here every once in a while and Kevin asked me to do it and the best interview you can have with a sorry with a prospective employer is an interview where they're talking like 95% of the time and you walk out of the room and they're like gee you know Sarah's an awesome candidate I don't know anything about her but she's awesome and it's what they spent the whole time talking about what they care most about themselves right because you got them to talk about themselves the whole time so ask lots of questions make them open-ended questions and listen very very well third piece of advice fourth piece of advice is be creative true story is I I covered two CEOs they were independent of each other from different countries didn't know each other at different industries and they both had the same nickname for their lawyer the nickname for their lawyer was doctor no and oh and the reason they called their lawyer doctor no as they felt like every time they went to their lawyer their lawyer told him why they couldn't do something that they were trying to do and by the way that's often the right advice like you don't want to get your clients in trouble you don't want to tell them they should do things that they shouldn't that's fine say no give them honest advice that's good advice but don't stop there come up with an alternative come up with a creative way where they could accomplish what they were trying to accomplish or if it's not possible or something else even if you don't think they might want to at least it looks like you're trying so don't be a doctor no that's the fourth piece of advice be creative fifth piece of advice is put the client first now a lot of people say that a lot of people talk about that what does it really mean it really means two things in my opinion the first thing is be prepared to give the client advice that is not in your interest there's no better way to establish credibility with a client than to give them advice that is not in your interest so in my world if we're advising an example I used if you're advising company a to buy by company B we really only get paid if the transaction goes through right people who take my Corbitt strategy class know that oftentimes it's not the right decision for company a to buy company B in fact more often than not it's not the right decision so if you go to company eight your client and you say you know what you shouldn't do this deal as a lawyer you're gonna get paid more the longer the deal goes on right all the way through consummation you get paid by the hour you shouldn't do this deal it's a mess if you're overpaying they're hidden whatever it is you will establish an enormous amount of credibility longer term because the client knows that's not your interest - given that advice you're gonna get paid less you're gonna stop getting paid that day if they listen to you advocate hard for positions regardless of what is in your interest in fact it's even better to put yourself longer-term better for the relationship to put yourself in a position where you're advocating for position that is against your interest so put the client first that's the first aspect of putting the client first the second aspect is one that's probably less popular for all of you to hear but you need to work really hard and to convince the client that you're there for them all the time now a lot of people talk about work-life balance and I'm a fan of work-life balance right I didn't have a lot of it when I started at my firm until I made partner and even for a period of time after that but it's not a bad thing to have work-life balance it's a good thing but it's also a very competitive world and if you're not there for the client on the thing that he's hired or she's hired you to do which is very important to them somebody else is gonna be there for them and there's plenty of people willing to pick up the phone at 2:00 or 3:00 in the morning if you're not so you have to work hard I think it work life balance more longer-term than shorter term so I don't achieve work-life balance on a given day maybe not in a given week although I'm senior enough that I try and have work-life balance on a weekly basis but at your stage of your career when you're just starting out think about it in terms of maybe monthly work-life balance or yearly or until you make partner whatever it is you can you can think about it in different ways with different different periods of time but you've got a you've got to convey to the client that they are the most important thing in the world to you which means you want to respond as quickly as possible what I tell people when I started at Goldman Sachs through the first ten years I was at the firm is I would say to clients look you can leave me a voicemail any time unless I'm dead or asleep I check it every 10 seconds and that resonated with people and by the way some people would try to test me on that and I always did so you and I don't sleep very long either so you know they're getting a lot of responses back from me so you got to do that that's not a popular meet correct thing to say but it is important to have a work/life balance have maybe a longer-term perspective on that but you got to be there for the client when they need you because you're hot being hard to work it's something really important to them number six this may sound obvious the most obvious piece of advice I've given but be upbeat I cannot tell how important it is to be upbeat so if your life is a mess don't tell the client that right don't let the client know that if you're just if you're having a bad day or a bad week or a bad year don't let the client know that don't share that stuff with a client you may be tempted to particular if you get close to a client that or not to better upbeat because it's contagious people want to be around happy upbeat people right so be upbeat be happy you know if things aren't going well pick yourself up go in they're going on a happy face for the period of time you're interacting with your client very important to be upbeat it's contagious being down is also contagious you don't want to you don't want to be down when you're meeting with clients last piece of advice is for all of you this is a unique piece of advice is take classes in the law and business section here at UVA you have a unique opportunity you have present company excepted outstanding faculty who teach classes that are business oriented and the reason why you want to take these classes is there are there is twofold there are two reasons the first reason is that you understand business you understand your peers in business why they make the decisions they make how they were educated what motivates them how their companies work it'll make you a better lawyer or consulting or banker or whatever it is that you're going to be the second reason which I tell my students often which is a goal in my class a goal that I put out front is it will demystify the jargon and the language of the business world the world that I operate in like the world that you operate in if you're in law school is mystified in language right if you speak in terms that many people don't understand story decisis res judicata so if you're not a war you can go to law school you're like oh my gosh you know what this stuff mean reality is it's not complicated right it's just jargon the same is true in the business world we speak in terms of capital asset pricing model discounted cash flow analysis comparable merger analysis where do you want to call it this concepts behind those terms are easy but if you're not familiar with them and you start covering a client or you're in a boardroom and they start whip around these terms they're speaking a foreign language and you're out of the conversation yeah you're gonna feel pretty intimidated I can't how many times I've seen lawyers shut down because they don't understand the language it's like they're speaking a foreign language that they can't understand if you take classes in the law business section here it will help demystify decloak some of the some of those if not most of those expressions most of that jargon gets used in the classroom and you become fluent in it at least conversant in it you won't be intimidated by

Channel: University of Virginia School of Law

Views: 442,745

Rating: 4.9523354 out of 5

Keywords: client relationships, business law, client service, Goldman Sachs (Business Operation), UVA Law, University Of Virginia (College/University), University Of Virginia School Of Law (College/University)

Id: z8kqCIxXTEw

Length: 17min 57sec (1077 seconds)

Published: Thu Nov 12 2015

Reddit Comments

[u/FreeMeFromMySins]

Respect the hell out of this guy. However, I do not necessarily agree with his statements about work/life balance. You should not look at it on a yearly or 'until partner' basis. Not at all. It should be based on your overall level of health (mental, physical, social, etc)- if these things are good, you can spend 100hrs/wk at work. If these things are deteriorating, do not look at it as "well, it will be find next year/when I am a partner," instead, look at it as a sign that your average quality of life has somehow decreased and, further, if you are willing to accept that.

[u/PoolsApp]

This is a great interview / lecture by James Donovan (MIT engineering BS, MBA and a Harvard JD) where he describes that lasting in these fields is not about personality -- it's all about who those who actively improve their skills sustainably (not burning out).

In the video, he describes that everyone he thought was going to be a good associate was gone in less than 5 years (burnout). Whereas, a lot of the people he thought were going to suck ended up making partner.

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tl;dr summary from some guy on YouTube:

1. Find a mentor - Do whatever it takes to shadow someone very experienced in your field and take notes of everything they do. This way, once you've your foot in the door, also try to be a part of the transaction.

2. Be an 'everything adviser' - Don't just stick to your engagement scope. If you can add value in any other ways, do it. Become the go-to-person for the client. Also, try to be more strategic with the advice.

3. Ask open-ended questions - Speak less and inquire more. More often than not, the client will like you just because you listen. It will also help you understand the underlying context on why the client is doing something a certain way.

4. Be creative - It is easy for the competent folks to say why something won't work. Be creative and try coming up with a solution to ensure it actually works.

5. Establish trust by being honest to the client - If something is good for the client and not that good for your firm, tell the client the way it is. In the long run, this helps you build a better business relationship.

6. Work hard and be available - Think about work-life balance in terms of months and years, instead of just days and weeks.

7. Be upbeat - Maintain the distance between your professional behavior and your personal life.

8. Study law and business. Understand both the sides of transactions.

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For the M&A hardos, here's his piece on M&A advisory: Are you Destined to Deal

[u/Hockeyboy540]

Awesome that you posted this guy’s lectures- his “Are You Destined to Deal” is the video that got me into Finance. I was a highschool senior set on Engineering or English, and watching it changed my whole mindset. I’ve come a long way since then and still remember how it started my transformation.

[u/4-man-report]

He actually got me interested in these fields to begin with. Incredible presence, I could listen to him for hours.

[u/lhmissio]

God damn this field is boring

[u/firedupmonkey]

Currently 3rd year in IB & the way to survival is 1. Hard work 2. Raging on the weekends with friends / significant other 3. Office politics 4. Sleep & exercise (it can be hard when you eat every meal at your desk M-Th/F) 5. When that bonus hits buy something or go on vacation 6. Choosing the right group culture fit is the MOST important thing. Working for complete dicks because of “the best exit opp firms” or for 10k more a year is not worth it. Let’s be honest you’re already making 6-figures in your early/mid 20s so just chill out

[u/exocetblue]

Remindme! 14 hours

[u/llluminate]

What a boring existence

[u/remady2]

Thank you, this is awesome!