Building Your Bankruptcy Book of Business
by: Howard J. Weg
Peitzman, Weg & Kempinsky LLP; Los Angeles
Building a successful practice is not a short-term effort. There is no magic bullet and rarely any immediate result. It is only through experience that you learn of a few solid approaches to building your book of business in a bankruptcy practice.
Become an Expert
Pick an area and become the go-to source on it. Your expertise area shapes the scope and substance of your practice. You might prefer bankruptcy litigation over restructuring companies or international insolvency proceedings. Ask yourself if you will do transactional work as well. Sometimes the choice will be yours. Sometimes, the choice is made for you by your firm, the economy or circumstances.
After you’ve chosen a practice area, then consider whom you will represent. For example, in a restructuring practice, you can choose to represent just debtors, banks, private-equity funds, committees or buyers of assets and claims. Or you can play the field and do work for all of these constituencies.
How to Become an Expert:
Expertise means more than just choosing. You should also study statutes and cases, and stay on top of developments in your area. Read advance sheets reports of new cases every week. Firms should also hold monthly meetings to review developments in business restructuring and chapter 11 cases. Lastly, know the law and do great work—it is the basis for referrals.
Identify Your Client Pipeline
Existing clients and parties on other sides of your deals are the low-hanging marketing fruit for client referrals. To build this pipeline, delineate who and where these sources are. If you want to represent banks, then focus on connecting with banks. To attract private-equity firms that invest in the assets and claims of distressed businesses, then court private-equity firms.
To represent creditors committees, you need to become known by people on the committee who will support the committee hiring you. While there are exceptions, generally committees are comprised of several kinds of creditors.
Trade creditors. These companies provide an ingredient in the product the distressed company sells. For retail clothing or electronics businesses, the trade creditors are the clothing manufacturers or the manufacturers of televisions and Blue-ray players. For shopping center owners in trouble, the trade creditors are services of the mall, such as security, landscaping, signage and parking services. In each instance, trade organizations represent all these businesses and you should get to know these organizations and participate in them.
Landlords. The distressed company—whether a chain of retail stores, manufacturing facility or office space—rents space from a landlord, who very likely belongs to a powerful trade organization. A handful of restructuring and bankruptcy lawyers specialize in representing these landlords and they attend landlord trade group meetings. You should too if you want to represent landlords.
Bondholders and claim purchasers. Claim purchasers buy the claims held by trade creditors and this group is usually easily identified.
Distressed businesses. Getting this group as clients relies heavily on referrals. Corporate lawyers, real estate lawyers, litigators, environmental lawyers, tax lawyers and others will have clients that sometimes need help. If you are at a big firm, referrals can come from lawyers in other practice groups. Remember to travel to other firm offices in major cities like New York and Chicago where work can originate. If you are at a boutique, referrals may originate from other lawyers who lack the bankruptcy expertise or capacity to represent troubled companies. Accountants, investment bankers and sometimes other clients are also excellent referral sources.
How to Work Your Client Pipeline:
Cast a broad net to catch referral work. Most importantly, achieve spectacular results for the companies you reorganize so the referral sources know you won’t embarrass them when they refer a troubled company to you for help.
Make and Nurture Relationships
Building lasting relationships with people who can send you business is the core of building a practice. Find a way to build relationships with the decision makers, or with the people who influence the decision makers. It is that simple and that hard all at once. Relationship building occurs one person at time, and these people may include classmates (both undergraduate and law school), associates from other firms, acquaintances from church, mosque or synagogue, or parents from your kid’s schools or sports. When you are out in the world, remember that everything and everyone is a potential referral. Sooner or later they will become, or will know, decision makers and think of you.
How to Nurture Relationships
- Help people when they call, even if it doesn’t mean immediate work. If they need a good tax expert, a doctor, or a contact to help their children gain admission to the right private school, be helpful. People remember and will feel indebted to you.
- Stay in touch with the people you meet. All of them. Let them know about an interesting article or case or call from time-to-time.
- Schedule face time: breakfast, lunch, dinner, sporting events, concerts or exhibits. There is no substitute for the personal touch. Even if they cannot schedule a meeting, they will remember your offer. You might even find that you like some of these people and become friends. That doesn’t hurt either.
Reinforce Your Expertise and Presence
Here’s where the rubber meets the road when it comes to amplifying your visibility and building your reputation.
How to Market Your Expertise
Write. Bylined articles and blogs establish your thought leadership and create an indelible and authoritative connection between you and your practice area. You can write long, scholarly law review articles for journals or shorter trade and general pieces for publications aimed at lawyers, accountants or businesses. Consider leveraging a brief or client memo and adapt it into a quick article or bog posting.
Speak. Presenting at programs increases your public profile and enhances your authority. Audiences you might address at panels and seminars include business people, general practitioners, accountants or even other restructuring lawyers. Besides the exposure before event attendees, there is an enormous benefit in the widely distributed flyers that advertise the program.
Lead. Assume leadership positions in bar organizations. Volunteer opportunities are plentiful: contribute an article, organize an event or champion a cause. There’s a clear leadership track in local, state and national bar associations related to restructuring and chapter 11 work. Becoming president or chair of an organization, or at least being on the board, is the ultimate goal, which will emphasize your credibility in the practice area.
Also consider participating in and leading organizations outside of the legal profession, such as a nonprofit, charity, youth sports team or a church. Your involvement will put you in front of a wider variety of people, and increase your visibility in the community as a leader.
Tell People What You Do, Succinctly and Clearly
When asked what you do, be ready with an engaging answer. Here’s one an example: “I am an attorney that specializes in restructuring businesses in and out of chapter 11. Some companies I worked on that you might have heard of included a, b and c.” If time allows, I would continue with: “A retail company with many locations under leases that were way over market came to us. We showed them how to convince the landlords to restructure the leases to accept much lower market rents to avoid having a bankrupt tenant that gets out of the leases by rejecting them in a chapter 11 case. We saved them $1 million a month and saved the business. Today they have $10 million a month net income.”
Some people call this the elevator speech. I prefer to call it starting a conversation, and the hook for further discussion depends on how you share your problem-solving expertise. By not tooting your own horn too loudly, you invite curiosity and further interaction.
How to Perfect Your Personal Pitch
A perfect “pitch” requires practice. Repeat your speech out loud and refine the one-minute and five-minute versions. Adapt it for various audiences, including a business person, a fellow attorney or the general public. Having a great opening greeting is one of the most powerful practice building tools when meeting a potential client or referral.
Executing all these activities can feel overwhelmingly time-consuming and distracting from the practice of law. Start realigning your thinking by viewing this effort as integral to, not an adjunct of, your professional success. There are no magic, quick-acting beans but there is a path for growth. It is both simple—for its reliance on common and social sense—and hard, because it requires commitment and action. Be patient, be proud and most importantly, enjoy the small successes and connections you make along the way.