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4 posts from April 2006

April 26, 2006

RFPs - When and how to compete

As the market for legal services becomes more competitive, clients are increasingly choosing law firms based on formal RFPs (Requests for Proposals). But when a law firm replies to an RFP, what are their chances of winning?

Of course the exact answer depends both on the RFP, and on the firm that replies. But, according to Ann Lee Gibson, typical win rates across the legal industry are “very small, probably no larger than 5%.” In other words, the typical RFP elicits about 20 proposals, producing one winner and 19 losers.

“I've often seen this 5% figure when I have worked with law firms over the last eight years to help them improve their competition performances,” she explained. “Usually with a good year or two of consistent effort, firms are able to get their win rates up to 30% - 40%.” To date, consultant Gibson’s advice has helped law firms win more than $435 million in new business.

The win rate of 30%-40% is remarkably close to the ideal win rate I’ve heard for other industries. Sales guru Don Schrello was the first to tell me that I should try to win 1 out of 3 proposals. “Wait a minute,” I said. “Shouldn’t I try to win them all?” “Of course you should always try to win,” he replied. “But if you ultimately win fewer than 1 out of 3, it probably means you are not being selective enough in what you bid, and are bidding RFPs you should have passed on. On the other hand, winning more than 1 out of 3 of your proposals either means you're being too selective in what you do bid (so you could likely grow more quickly by bidding on more RFPs), or are pricing the bids you do make too low, thus leaving money on the table.”

To start getting your win rate up, see Ann Lee Gibson’s article “50 Tips to Help You Win Client Competitions” in Law Practice Management, which can also be downloaded from her Web site.

The best practices Gibson describes start before the competition begins, when you choose which RFPs to bid on. One key is to avoid competitions that are “wired,” that is competitions where the client already knows who will win, but needs to go through the appearances of a competitive process. The trick is to look for signs that they are not serious about the evaluation. For example, before submitting a response you should request an interview to gather background information, and to build relationships. According to Gibson, “Firms that won’t meet with you probably are signaling that the competition is a sham.”

It’s also important to stress the human element in other ways. “Clients will appreciate it when you offer lawyers’ home and mobile phone numbers. Many clients also respond well to invitations to kickoff retreats and face-to-face client satisfaction interviews conducted by the firm’s management or marketing department.”

And remember that “the executive summary is the most important chapter in the proposal” because it’s the section most likely to be read. Think “less is more” throughout, because “when asked which proposals they read first, corporate counsel almost always say, ‘The shortest ones.’”

Finally, Gibson says, “Always debrief the prospective client after the competition is over to learn why the winners won and why the losers lost. More than anything else you can do, debriefs and the information they yield will rapidly guide your firm to improve its competition strategies and tactics.”

As Ann Lee sums up her approach: “It sounds simple, and it is. But, like most ‘overnight successes,’ it requires year after year after year of discipline and hard work.”

To learn more, sign up for Ann Lee Gibson’s Law Journal Newsletter Web Audio Conference “Winning the RFP” tomorrow, Thursday April 27, 2006, at noon Eastern Time.

April 19, 2006

How to execute a law firm market plan

Last week, I outlined Rob Duboff’s simple process for defining a market plan.
Step 1 – Define goals
Step 2 – Identify your target audience
Step 3 – Define action items

But I did not go into detail on Step 3, because it’s too hard. It’s not hard to come up with a list of things you could do that would be useful. What’s hard is coming up with the best list of action items to fit your practice, your personality, and your time.

As in Step 1, I think it is important to do just enough analysis to be sure you’re headed in the right direction, but not so much that you are paralyzed into inaction. What works for one person may not work for another, so at some point you just need to get out there and see what works for you. In my workshops, we start with a fast paced brainstorming session, and then prioritize the ideas and narrow down the list to the one or two that each lawyer can actually find time for. We start from a “top ten” list of action items to find new clients, or increase revenues with current clients. Here are a few items from the current clients “top ten”:

Number 2 - Conduct a formal client satisfaction interview.
Number 4 - Tell them how to control or reduce legal costs.
Number 6 – When you meet with clients about new matters, do you listen at least 50% of the time? If not, practice using “easily answered questions” to increase your listening time.

After the brainstorming is complete, lawyers use the best items as the basis for a “One Page Marketing Plan.” (You can download a sample from the Free Resources section of our web page.)

Then, when your marketing plan is done, the hard part begins. Because creating a plan is child’s play compared to following up and executing it.

Recently, I talked to Heather Gray-Grant, Director of Marketing and Business Development at Alexander Holburn Beaudin & Lang about this issue. She noted that in seventeen years in legal marketing “I’ve seen an enormous amount of excitement about new plans and strategies. But when it comes to action, many lawyers continue to be hesitant about even the most basic steps.”
In her recent presentation at the Legal Marketing Association (LMA) conference on “Closing the Strategy-Execution Gap,” Heather included case studies of inaction, “in which lawyers came to meetings week after week, month after month, with the same list of marketing action items that never seemed to get done.”

She quoted some LMA research on the high turnover in legal marketing positions, and said one key reason marketing professionals leave law firms is that “so many get frustrated that they just can’t seem to get lawyers going.”

There are a number of explanations behind this problem, from personalities and cultural issues to financial and structural issues. But no matter how understanding one chooses to be, at the end of the day, the question is: What are we going to do about it?

Heather told me that there’s nothing magic about the answer. It’s just hard work. Get a clear management mandate, find a champion, set deadlines, assure ongoing support, establish checks and balances, and deal directly with roadblocks.

As the slide says in my workshop: selling is the hardest work you can do in a suit.

April 12, 2006

How to write a law firm marketing plan

I’ve been talking to a number of experts lately about how to simplify and accelerate the process of creating a law firm marketing plan. So when I had breakfast with Rob Duboff recently, I asked for his advice, based on his experience as the CEO of marketing firm HawkPartners, as former Director of Marketing at Ernst & Young, and as a lawyer. Rob said it all comes down to three steps:

Step 1 - Define goals.

All planning begins by setting goals. If you don’t know where you’re going, you’ll never get there.

This step scares me, because I have met too many lawyers who are like me, with a natural inclination to overanalyze problems. I hate to think about lawyers sitting around debating marketing goals, when they should be out meeting people.

So I pushed Rob for ways to accelerate this process. But no matter how I asked the question, he said some law firms will simply need time to complete this step. “If a law firm wants to be more than a few people who share an office and a receptionist,” Rob said, “they must build a common identity around shared goals.”

The group must start with the central questions faced by every entrepreneur: how important are lifestyle issues vs. revenue growth? What type of firm do I want to work for? What types of risks and sacrifices are acceptable, and what types are not?

Then there’s another set of issues on specialization: What are we good at? What special services can we provide? (For more, see my blog “Selling starts with a plan.”)

Rob said that for law firms, one particularly important issue is the personality of key rainmakers, present and future. He talked about David Maister's work on “hunter vs. farmer” approaches to selling. Herb Weinberg, Harold Weinstein, and Patrick Sweeney explained this distinction in their book How to Hire and Develop Your Next Top Performer (p. 61): “Hunters are the classically driven, highly persuasive, fast-closing salespeople. Then there are the farmers, who slowly cultivate clients, build long-lasting relations and close less frequent, but larger sales.” Law firms need some balance of these two styles, and also need to be realistic about the talent they have.

As I thought about Rob’s advice, I continued to worry about how goal discussions could slow lawyers down, especially in mid-sized firms which are large enough to have several key players who need to agree, but not large enough to build significant organizational momentum on a majority consensus. No firm can afford marketing paralysis in the current competitive environment.

My compromise answer appears in the new edition of my Law Firm Business Development Workbook: while you are waiting for your firm to agree on a marketing plan, you can still start selling by using this temporary goal “Protect and increase revenues with current clients.” And if that doesn’t fit your practice, set a temporary revenue goal for new clients, and look for people who are similar to the best clients you already have. Then proceed to

Step 2 - Identify your target audience

Defining a target audience is easy compared to defining a goal. Just write down the names of people who have potential for new business that will help you meet your goal. If you don’t know their names, start with job titles and/or organization names, such as general counsel for Fortune 1000 firms, or biotech COOs, or union leaders for organizations of 500 employees or more, or small business owners with at least 50 employees. Then do a little research to fill in the names.

This type of focus will be an enormous help when you get to

Step 3 - Define action items

Here it gets hard again. There are dozens of things you could do, but you only have time for one or two. Exactly what should you try? Your action items should be SMART: Specific, Measurable, Achievable, Relevant, and Timed. This discussion quickly gets into issues of how to implement the plan, so I’ll save it for next week’s blog on “How to execute a law firm marketing plan.”

April 05, 2006

How to Conduct Client Satisfaction Interviews - Part 2

(See Part 1 for the beginning of this topic.)

How should the interviews be conducted?

There must be some experts out there who feel that client satisfaction reviews are best conducted by phone or written survey. But all the ones I’ve talked to recommend face to face meetings. Peter Johnson explained why: “A skilled interviewer often picks up on the subtleties of non-verbal cues that cannot be observed over the phone. A personal meeting allows increased focus, limits distractions… [and] creates the opportunity to establish rapport.” In my mind, the last point is the most critical: building rapport means building relationships and future business.

On the other hand, if you are in Wisconsin and your clients are in Dubai, a telecon is better than nothing.

Make sure that the client knows that your aim is to improve communication and service, and that you are not billing for the time. That in itself will make people smile.

During the meeting, clients must be encouraged to speak freely. Interviewers should listen and take notes, and never argue or defend themselves. (That comes later.) If you are the kind of person who will be unable to prevent yourself from arguing, find someone else to conduct the interview.

Questions to ask

Survey questions should be defined in advance. Skilled interviewers may improvise based on their script, but it is still important to start from a script. Some experts even recommend sending the questions in advance, so that clients know exactly what to expect, and can choose to prepare their answers

Tom Kane suggested starting with these basic content areas:
How are we doing?
What is the firm doing well?
What could we do better or differently to improve our services?
Would you recommend the firm to others? Why (yes or no)?
Anything I haven’t asked that I should have?
Are there any other issues you would like to discuss?

Laura Meherg suggests adding questions about other firms that your clients use: What do they do well? What do they do that makes your life easier? What should they do differently? “It's great for competitive intelligence gathering,” she noted, “and clients are surprisingly open about their experiences working with other law firms.”

Gerry Riskin suggests thought provoking questions, such as:
“Please describe the top three ways you measure our performance.
How important to you is it that we know your industry? How do you measure that?
When you’re stuck in traffic and you’re thinking about the business, what issues are running through your mind?
What could we be doing that would make your life easier?
What could we be doing that clients like you may not yet have asked for?
How could we better use technology to be of service to you?
Are there any services that you think we are missing out on by not making them available to companies like yours?
If you were appointed the Managing Partner for a firm like ours, what would you do differently?”

You may also add questions about how clients perceive key issues of your practice, including:
The quality of the legal product
Listening to client concerns.
Understanding client goals.
Understanding the client’s industry.
Keeping clients informed.
Explaining legal issues in terms that clients understand.
Showing genuine interest and concern.
Being prompt, responsive, and accessible on short notice.
Providing accurate and complete billing statements.
Charging fair and reasonable fees.

If you don’t have time to put together a custom list of questions from the lists above, start with these:

What do you like about working with our firm?
What could we do better?
How would you rate your overall satisfaction?
What could we do to increase our rating?
In the past, what are some of the things that you’ve liked most about working with law firms, both our firm and others?
What have you liked least about working with law firms?
Do you see any future trends in your business or industry that will affect the need for legal services?
What could we do to make you happy?
Would you recommend our firm to others? Why or why not?

When you interview clients who are very satisfied, is it OK to ask for referrals or even proceed to directly selling new services? That’s where the experts disagree, passionately. To review the debate, see my March 8 posting, Dan Hull’s post, Patrick Lamb’s post, Michelle Golden’s post, Tom Kane’s post, and Gerry Riskin’s comments in my blog. The short answer is that while some have had success with selling, most experts agree that formal interviews should focus strictly on client satisfaction. Anything that sounds like selling could make the client defensive, and should be saved for another time and place.

Then the real work begins

When the client satisfaction interview has been completed, the work of creating super-satisfied clients has just begun.

After the meeting, email the client a list of action items which you can and will achieve, and inform the client as you accomplish each one. A handwritten thank you note also adds a special touch.

For large clients, follow-up is best handled by a coordinated client service team. But that’s a whole different topic (see Part 3 of this series).

For a summary of this advice, go the free resources section of my web page and download a copy of “How to Conduct Client Satisfaction Interviews” from the next edition of my Law Firm Business Development Workbook.

The most important thing is to get started, and to establish a regular schedule of client satisfaction reviews. It’s easy to get slowed down by all the controversies and the options. But every expert agrees that the most important thing is just to get out there and talk to your clients about what they like, and what they need. If you don’t, your competitors will.