Transcription
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 clients, the so-called rainmakers, I was worried that maybe they're just born that way, maybe they were just natural-born salesmen and saleswomen.
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, an 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 in 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 who's really good. Flatter the person. Say that to them, "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 transactions? 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 client is Company A. You're gonna spend a ton of time with the CEO over a six-month to a year period working on that deal. You were gonna spend all-nighters with 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." The CEO says, "Oh, 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 advisor to the client.
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 yen? 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 an 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 and found helpful about hedging currency exposure overseas?" I might engage the client on a financing mandate. "Have you noticed that your competitors are raising financing in the debt markets right now because interest rates are so low and it's very cheap, rather than using equity financing? Why don't we have, 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 an 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 advisor 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 to college, where do you think she should go?" You know, that's that's becoming a strategic advisor to your client.
Lawyers make this mistake. Bankers make this mistake. Accountants, consultants make this mistake, 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 restructuring this transaction differently to minimize tax impact? Can we bring in our tax folks to talk to you about that? Use that opportunity to build relations.
It's very helpful for three reasons. One, you give the client better advice. The more you know about the client, the better advisor you become. 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 gets the idea of thinking about whether they should hedge their currency, they're not having a bake-off and I'll bring in ten currency hedging firms to help them. No, they're like, "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 a 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 an everything banker, everything lawyer, you acquire, 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 advisor 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 in 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, different industries, and they both had the same nickname for their lawyer. The nickname for their lawyer was "Doctor No." And, and the reason they called their lawyer Doctor No is 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, buy Company B, we really only get paid if the transaction goes through, right? People who take my corporate 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 A, 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 to give 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 a 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 of 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 to, 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, 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 hard, 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, particularly if you get close to a client, that or not to be 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 there, put 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 consultant, 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, stare decisis, res judicata. So, if you're not a lawyer, you can go to law school, you're like, "Oh my gosh, you know, what does 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, whatever 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 whipping 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 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 it.