Anyone who has spent time around a restructuring practice knows how the mandates actually arrive, and it is not through anything a marketing function would recognise.
They arrive because a workout officer at a bank’s stressed assets desk has known a particular partner for six years. Because a financial advisor who has run three processes with the same law firm reaches for it on the fourth. Because a turnaround sponsor, or a fund that buys into these situations, or an insolvency professional who has been appointed on a dozen files, has a short mental list and the law firm is on it. The instruction is downstream of a relationship that predates the distress by years, and no amount of activity elsewhere substitutes for it.
I take that as given, and I think the people who describe restructuring origination this way are describing it accurately. What I have been turning over is a narrower question, which is what causes any particular one of those relationships to convert on any particular day.
Because the trust is standing, and the call is an event. A partner may have twenty relationships of exactly the kind described above and receive four calls a year out of them. The other sixteen are not less warm. Something that was not deliberate happened in four cases that did not happen in sixteen.
The mechanism, as far as I can tell, is memory. A file lands on a workout officer’s desk on a Tuesday, she has half an hour before a committee meeting, and she reaches for whoever comes to mind. Trust determines the shortlist she is drawing from. What determines who surfaces off that shortlist at that moment is much closer to accident. Accidentally, who she saw last week, who wrote the article she read, who happened to have been attending a conference in March, who called her about something else a fortnight ago.
This is uncomfortable for firms, because it means a substantial part of the origination they believe is relationship-driven is in fact salience-driven. Trust may not be perishable but salience is.
What has struck me more, though, is the direction of the call.
In most firms, the sequence is that the contact rings the partner. Which means the firm’s involvement in a situation is entirely dependent on someone else having thought of them, unprompted, at the right moment. The partner finds out that a relationship of theirs is dealing with a live matter at the point where the matter is already being staffed.
The firms that do best at this seem to me to reverse the direction more often. The partner rings first: I saw the [….event…], are you on this one? That is not a pitch and it does not feel like business development to either party. I would call it proactively tracking a situation others only hear about afterwards. But it requires knowing that the situation exists, and knowing which of the firm’s existing relationships sits inside it, at a point early enough for the question to be useful.
“Knowing” is not the same as “prospecting”. There is no new relationship being sought, and the person being called is someone the firm has acted for repeatedly. It is closer to relationship maintenance, except that it depends on a continuous read of the market rather than on lunches. So far I rarely find that this process has a natural home in a law firm’s structure. Business development functions generally cannot read the situations. Partners can, but are billing.
Of conflicts, and adjacent opportunities
Sophisticated restructuring practices already map the whole capital structure of a situation, and do it for a reason that has nothing to do with prospecting: if the firm is conflicted off the debtor, or off the lead lender, it needs to know immediately which of the adjacent roles remains available to it. A senior secured group. A junior tranche. A purchaser looking at the assets. Conflicts in these matters are not a dead end; they are a redirection, and the firms that treat them as such take a role in the restructuring rather than sitting it out.
But that mapping is nearly always done after the phone rings, under time pressure, when the good adjacent roles have already been taken. Done a few weeks earlier the mapping is not against running competition. The same analytical exercise now produces a materially better outcome, even though a month earlier there was no matter, no file number, and no one to bill.
So I would put the position this way: The orthodoxy is right; restructuring work is won upstream, through relationships built over years with the people who control the instruction, and a firm without those relationships will not buy its way in. But the orthodoxy is also incomplete, because those relationships do not activate themselves. Trust decides who gets called. Something else entirely decides when, and whether it was you who called first.
Lawfinity Solutions advises international law firms on cross-border legal market positioning. If the India corridor is a live question for your firm, we would be interested in a conversation. Lawfinity works with one firm per jurisdiction. Engagements begin with a single conversation about your firm’s current position and where the corridor question is live for you. Write to Prachi Shrivastava
