« September 2005 | Main | November 2005 »

4 posts from October 2005

October 26, 2005

Will the Dupont Legal Model reduce your income?

When I taught a Rainmaker Workshop last week, a participant from Wilmer, Cutler, Pickering, Hale & Dorr brought up the DuPont legal model. The resulting discussion was so fascinating, that I decided to discuss the model in this week’s blog.

DuPont, of course, is one of the 100 largest companies in the world. For many years, the people who brought you Dacron, Teflon, Tyvek, Lycra, and Kevlar were best known in advertising circles for their slogan: “Better Things for Better Living … Through Chemistry.” But among lawyers, they will always be remembered for creating the DuPont Legal Model, a new way for corporations to employ law firms.

In 1992, DuPont established a “convergence process” to increase efficiency, reduce the number of law firms they used, and turn the survivors into strategic partners. According to the DuPont Legal Model web page, the key concept is “Early Case Assessment, which shifts the focus from processing a lawsuit to resolving the business problem.” In its first four years using this model, DuPont reduced its number of law firms from 350 to 42.

It’s hard to argue with the results from DuPont’s point of view: reduced costs, increased productivity, and improved quality. But you’d have to think that when more than 300 law firms lost DuPont’s business, they were less enthusiastic.

Now other large firms are trying the same thing, and the movement is picking up steam. For example, Tyco recently applied the model to reduce the number of firms they used in product liability cases from 167 down to a single firm. For details, see my June 15 blog posting “A multi-million dollar fee.” In another recent posting in this blog, Edward Schechter, Chief Marketing Officer at Duane Morris, summed up the implications very clearly and very simply “The DuPont model is changing the profession.”

The DuPont Legal Model web page has everything a corporation needs to get started on this process, including a 5 page downloadable RFP template. Here’s what that RFP template says about payment:

“1. DuPont is interested in results, not effort. Our long-range goal is to move away from hourly billing where feasible. We believe hourly billing is a disincentive to efficient service, and we welcome opportunities to structure fee agreements that provide for incentives and that reward results rather than time devoted to a matter. We solicit your input on alternative billing arrangements that allow you to deploy your resources in the most cost-efficient manner.

2. For the near term, in consideration for our placing our business with you, we solicit your proposals regarding reduced hourly rates, volume discounts, or other alternative fee arrangements.”

What do you think: will this reduce lawyers’ income?

October 19, 2005

Why many lawyers waste their time giving speeches

When lawyers start to think about putting more effort into marketing, one of the first things they often try is giving speeches. Many put in an enormous amount of effort over months or years, see no results, and give up.

But some lawyers have great success generating new business from speeches. What are they doing differently?

The key to success is follow-up. Speakers need to collect emails and phone numbers at every event, divide them into short-term and long-term prospects, and then follow up with each and every one of them.

Ideally, follow-up techniques should feel natural to both speaker and participant, and maximize the benefit to both.

For example, when I give my Rainmaker Workshops, I hand out a form for people who want a follow-up phone call or email to improve the action plan they create in class. It’s optional because that makes it easy to identify the people who want help and are most interested in using the process.

Another example: At my next two convention presentations (at the ISA Sales and Marketing Conference October 28, and at the annual meeting of the Massachusetts Insurance Agents Association November 14), I’ll be trying out a new technique to collect the business cards of potential clients. In both talks, I’ll explain how to increase sales productivity by applying 26 principles from ad campaigns. I’ve had high quality plastic wallet cards printed up listing the 26 principles, and I’ll offer a free card to anyone who gives me their business card. Those are the long term prospects, who will be added to the mailing list for my newsletter.

At the same talks, whenever I get a chance to chat with someone who seems interested in the approach, I’ll ask for a business card and jot a note on the back about what we said. Then I’ll try to find a reason to follow up within two days, to get a meeting and to advance the relationship. The key is that two day time frame. If I wait a week, the speech will feel like ancient history.

Of course lack of follow-up is not the only reason that speeches fail to bring in new business. If the speech is terrible, no one will want to hire you. And you won’t sell anything if your audience consists only of competitors. But once you’ve covered the basics, follow-up is the key to success.

It can take a lot of work to come up with specific ideas for follow-up that feel natural for your audience and presentation, but it’s worth it. The first step in a new relationship is always the hardest, and speeches are a great way to find new people and take that first step.

October 12, 2005

The two most important words in legal marketing and sales: Don't stop

In my book AdverSelling®, the 26th and last sales principle is “Don’t stop.”

During the Great Depression of the 1930s, when most companies were slashing advertising expenses, Procter & Gamble increased their advertising, to experiment with a new medium: radio. To increase listener involvement and loyalty to radio programs, they invented the concept of dramatic serial programs such as Oxydol’s “Ma Perkins,” Camay’s “Forever Young,” and White Naptha’s “The Guiding Light.” Each program was sponsored by a different brand, and they acheived such great success that they became known as “soap operas.” Procter & Gamble refused to stop when faced with a down economy, and they ended up building one of the largest corporations in history.

Seventy years later, Procter and Gamble is still succeeding with this relentless long term approach. In China, they’ve invested over $1 billion in 17 brands including Head & Shoulders shampoo, Cover Girl makeup, Pampers diapers, and Pringle’s potato chips. In every category in which they compete, Procter & Gamble is the leader in the Chinese market. Except for Tide laundry detergent. But don’t worry, Tide is number two, and Procter & Gamble won’t stop.

Research suggests that for lawyers, “don’t stop marketing” applies not just to current clients, but also to former ones. According to Harry Mills’ Rainmaker’s Toolkit (page 95 in number 3 on my Amazon list of the top 10 marketing and sales books for lawyers):

“Research shows:
The chances of selling to an existing client are better than 1 in 2.
The chances of selling to a lost client are 1 in 3.
The chances of successfully selling to a fresh prospect are 1 in 8.”

Other experts would quibble over the exact ratios, but all agree that it’s much easier to sell to people who know you than to sell to strangers. The conclusion is obvous: when a law firm first begins to try increasing sales, much of the initial effort should be aimed at existing clients, until you have 100% of their legal business in the areas you can handle. In fact, you shouldn’t stop even when you do have 100% of their business. In today’s competitive environment, many other firms are trying to force their way in, and you will need to put in more and more effort to protect what you have.

For large firms, one way to enhance relationships with current customers is with client service groups that systematically solicit feedback on past performance. My June 16 posting in this blog (No A plus’s, but lots of new business) talks about the positive effects of the 50 client service teams Akin Gump started in the past two years. Watch future blogs for more on this topic.

The second implication of Mills’ figures is less obvious: If you dust off the list of clients you’ve lost over the years, and reach out to them once more, you’ll have a good chance of earning some back.

One reason I’ve been thinking about this particular principle is that on Saturday I’ll be celebrating my company’s 20th anniversary. Twenty years is a very long time for a small business. When I started the company in 1985, the Rolling Stones were middle-aged.

I can remember going out to dinner with my wife six months after I had rented my first office. I had not yet signed a single customer. There was one client that I’d been talking to for months, and I kept thinking I would sign, but for one reason or another the decision was always delayed. I asked Pat whether she thought I should give up on being an entrepreneur and look for a job. She said to give it a little longer. Five days later, the client signed and I began hiring my first employees.

That’s when I became fully aware of how long marketing and sales efforts can take, and how unpredictable they can be. So as long as there is hope that a sale can occur, just keep pushing forward. Until you start looking like the Rolling Stones. Then you should stop.

October 05, 2005

Everything you need to know about legal marketing and sales, in nine words

There’s good news for lawyers who want to find new business: the fundamental principles are so simple that they can be summarized in nine words: identify prospects, get meetings, listen, get advances, don't stop.

The first phrase – identify prospects – is important when done properly, but it can also turn into a time waster. If you don’t have a clear idea of who to target as potential customers, you could waste an enormous amount of time talking to the wrong people. The problem is that some lawyers spend so much time on analyzing the possibilities that they don’t have any time left for actually selling anything. If you’d rather do research and analysis than go to a networking event, remind yourself that this isn’t a science experiment, it’s marketing. If in doubt, pick up the phone and proceed to step 2

Selling services is really very simple: You must begin by meeting people. And the more people you meet, the more likely you are to get new business. Clients hire lawyers whom they trust and like. You don’t build trust by reading brochures, and you don’t build liking on a web page. The best way to build trust and liking is by sitting face to face and talking. You can increase the impact of meetings by doing some research and preparation. But again there is a risk of over-analysis: if your preparation takes so much time that it reduces the number of people you meet, stop preparing and get out of the office.

If you want to expand business with current clients, just call a few of the biggest and say that you’d like to get a better understanding of their company and industry. After you explain that they will not be billed for your time, most people will be happy to meet. If you want to find new clients, that’s a lot harder. More on that in future postings.

Once you get the meeting, it’s time for the next step: listen. Plan to spend 50% to 80% of every meeting listening, not talking. This will come naturally to some people. But others, like me, need to work at it. I have so many fascinating things to say, and I just can’t wait to tell people how I can help them. If you feel the same way, here’s my advice: Stop talking. Ask a question. Listen to the answer. Then ask another question. For more details, see my July 19 posting in this blog (listen up) or Kevin Daley’s book Socratic Selling from my Amazon list of the top 10 sales and marketing books for lawyers.

The fourth step – get advances – comes from another of my top 10 sales books, Neil Rackham’s classic SPIN Selling. In the most systematic research effort in the history of sales, Rackham analyzed the techniques and results of 35,000 sales calls. He found that the best sales people are very good at getting clients to agree to take a small step toward the sale after each meeting. An advance must be specific. If a prospect says “we should talk again,” that is NOT an advance. If a prospect says, let’s have a telecon on Friday October 6, that IS an advance.

One big mistake that novices often make is they try to push for too much, too soon. Successful rainmakers are experts at judging what advance can realistically be achieved at any stage, and getting it. Which creates a natural progression to the final advance: actually getting new business.

The last two words – don’t stop – are so critical that I’ll need a separate posting to talk about them next week.

So the good news is that the theory of law firm sales is so simple that it can be summarized in nine words: identify prospects, get meetings, listen, get advances, don't stop. The bad news is that in practice, selling is the hardest work you can do in a suit.