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5 posts from August 2007

August 29, 2007

How to define your niche

Most lawyers have a well-defined niche they are happy with, and can skip this week’s post. But if your niche is not well-defined, or you are worried about its financial future, or you just changed jobs and need to re-focus, or you don’t like the work you do, or you are an associate just starting your career, this is the most important marketing decision you must make.

When associates start their legal careers, the world is a blank page, and it will take years to experiment with and define the best niche. For most mid-career attorneys, the challenge is different: defining a niche that builds on your history and practice, and refining it to get more value from your time. Business development is most efficient when you focus on activities which allow you to get more from the relationships you already have.

The central questions lawyers face in defining a niche are similar to those every entrepreneur faces in starting a new business, including:
• What type of legal work do I like to do?
• How much of a market is there for that kind of work?
• Is the market for those services stable, growing, or shrinking?
• What type of client do I want to work with?
• What experience do I have?
• Who do I know?
• How important are lifestyle issues vs. revenue?
• What types of risks and sacrifices are acceptable, and what types are not?

There’s nothing easy about any of these questions, and it may take some time to come up with the niche that best balances your desires against financial realities.

In large firms, the niche is ideally defined for a practice group, because there is strength in numbers. A practice group niche should be broad enough to provide a steady stream of work for several lawyers, but narrow enough to be realistic given the marketing time most lawyers can spare, such as:
• White collar defense attorneys for East Coast financial services companies.
• Tax and estate planning attorneys for physicians in and around Chicago
• National experts in mid-sized Department of Defense contracts for the aviation industry.

Note that the first two examples include the geographical area that lawyers are focusing on, because the closer you can stay to home, the easier it will be to build the personal relationships that lead to new business. The last example is a national niche, which is most appropriate for highly specialized areas of the law.

As you plan for the future, your marketing department can provide an enormous amount of information and advice on national and regional trends.

But while you are working on all this, it is important to remember to develop new business in the niche you already have. Many lawyers would rather analyze their options than get out of the office to meet potential clients. But meeting with clients will not only help you to make a living in the short term, it will also help you to understand the market opportunities that exist today. So while you’re working out that ideal answer, write down the niche you serve right now. Then ask yourself: What should I do today to increase new business?

Desk_reference_cover_with_border This post was adapted from The LegalBizDev Desk Reference.  For more information, Download legalbizdevsuccess_kit_summaryl.pdf.

August 22, 2007

How well do you relate to your clients?

In the consultative selling classic Stop telling, start selling: How to use customer-focused dialogue to close sales, Linda Richardson argues that business development is based on dialogue. Much of the book is devoted to six critical skills that determine the effectiveness of client dialogue: Presence, Relating, Questioning, Listening, Positioning and Checking. This week, I’d like to focus on the second skill on Richardson’s list: “Relating.” Because if your relationships with clients are weak, your prospects for future business are too.

If you want to be better at relating, do you have to play golf? Some sales pros would say golf is always a good idea, but I disagree. You should play golf only if your clients like it, and, just as importantly, you like it too. Faking usually backfires. It’s certainly possible to start a relationship based on fake interests, as many divorced couples can attest. But it’s far more enjoyable, and more effective over the long term, to build authentic relationships based on rapport.

You need to build rapport by exploring your client’s interests, to find genuine links. To get started, ask open-ended questions about whether the client has vacation plans, or a favorite restaurant near the office, or a long commute. Or ask about the client’s spouse or children by name.

What if you think that this particular client does not want to chat about vacations, restaurants, commutes, or their spouse or children? Listen to your gut. If your instincts say that this is a time to keep strictly to business, you’re probably right. But you can still build rapport with an all-business client by saying that you know the client’s time is valuable and asking what time the client wants the meeting to end.

People are different. That’s not exactly a news flash, but it is amazing how often it is ignored. “Relating” is not based on a single activity that works the same with everybody, but rather with finding the common link between you and each individual client so you can form a genuine bond. It doesn’t have to be deep, but it does have to be authentic.

Richardson’s book discusses a number of ways establish rapport, including:
• Identification: did you grow up in the same state, or go to the same school?
• Be prepared: learn about the client’s industry, or about the client’s hobbies or charities. If you Google your client and find that she’s chair of the local Big Brother/Big Sister organization, you may be able to use it. Unless you sense that the person will feel like her privacy was invaded. Again, you have to adapt your activity to each individual’s comfort level.
• Courtesy: Little things can make a big difference, like waiting to be offered a seat before sitting down in a client’s office. Even if the client already seems grateful for the good service you provide, you should be thanking them for giving you an opportunity to work together. You can’t thank people too much, and a handwritten note at just the right moment will never be forgotten.
• Mind over matter: If you think you just can’t connect with a particular person, you’re probably wrong. Keep trying to find that one positive link to focus on. You know it will change your attitude.

Do you think your relationships are already strong enough? That’s exactly what your competitors want you to think, because they are hoping to build relationships of their own.

In my opinion, it does not matter what relationship you have with a client now, the question is always the same: what can I do to make that relationship even stronger?

August 15, 2007

Cross-selling - Part 1

This week’s post reproduces my column “On Business Development” from the July-August issue of Law Firm Inc. Cross-selling is an important and controversial topic, and I shall post several followup items in coming weeks.

Remember the KISS strategy? (“Keep It Simple, Stupid!”) Well, it still works like a charm at some law firms. As the director of business development at Goulston & Storrs—a 190-lawyer firm with offices in Boston, Washington, D.C., London, and New York—Beth Marie Cuzzone has found that business development programs work best when they are built around concepts that lawyers already know, accept, and understand. If you use the language they expect, and if you understand the way lawyers work, you’ll succeed, she says.

BethcuzzoniOne simple example is translating salesspeak into legalspeak, the terminology used with lawyers. Sales pros often assess progress by measuring “sales cycle stages” such as prospecting, qualifying, and assessing needs.Lawyers don’t use language like that.So at Goulston & Storrs, Excel spreadsheets track prospects under similar headings, but each stage has a title that feels more comfortable to lawyers: approach; prioritize; contact and conversation; possible legal solution; and client conversion.

It’s a courtesy, if you will, that lawyers seem to appreciate. It’s all part of the “less is more” approach that the team at Goulston & Storrs applies day to day. “Cross-selling is the low hanging fruit for every law firm,” Cuzzone explains. “Six years ago, our recipe for cross-selling started very simply, by getting all the partners together in a room and handing out a sheet of paper.” That sheet of paper had three columns: client name, what do we do for them now, and what other legal needs do they have? Lawyers were asked to fill in the information for three current clients they enjoyed working with, and where Goulston & Storrs had the potential to expand its work.

Almost every lawyer filled out the sheet. Then Cuzzone typed up the results in an Excel spreadsheet and sent it to all the partners. For some, that was all they needed. They started following up with each other as soon as they saw the list. “I didn’t know you were handling that work,” one might say to a colleague. “Could you get me an introduction?” Other lawyers needed help, support, and diplomatic prodding to assure follow-up. Cuzzone walked the halls to pull lawyers with the greatest business potential into conversations about what might come next. Her goal was to make it as easy as possible to grow existing client relationships at Goulston. Sometimes she acted as an internal sales coach, even scripting the lawyers’ conversations and roleplaying calls to clients. This simple and inexpensive approach led to a significant number of new engagements, and ultimately to an expansion of her department.

Recently, Goulston has started using the LexisNexis InterAction CRM (customer relationship management software) to track clients. But when it comes to tracking top opportunities, they are sticking with an Excel spreadsheet, because “it’s simple and quick, with no fuss,” says Cuzzone. Less is more.

August 08, 2007

What sales pros say about followup

When lawyers want an overview of how consultative selling works, I recommend Linda Richardson’s book Stop telling, start selling: How to use customer-focused dialogue to close sales. The author has written nine books, founded one of the largest sales training companies www.richardsonco.com, teaches at the Wharton School, and is one of the leading figures in the consultative selling movement.

Richardson’s book is aimed at sales people, not lawyers. But she offers soup to nuts advice on how to develop new business, and much of it can easily be applied to the legal profession.

Selling is based on dialogue, Richardson says, and her book describes six elements of the “Dialogue Framework”: Opening, Customer needs, Product positioning, Objections, Close/action step, and Follow-up. These are all important to lawyers, and sooner or later I may talk about them all in this blog. But I want to start with the element that I think is most critical for the average lawyer, and most lacking: followup.

Developing legal business is based on building relationships with busy people, and understanding their needs. This can take a very long time, and the amount of followup that occurs before the sale can be the difference between success and failure. Given how busy lawyers are, finding the time to followup can be a significant challenge. But that does not change one simple fact: if you want to succeed in developing business, you must followup.

Being there for the client all during their decision-making process can put you way ahead of competing firms. Sometimes, the reason to followup is obvious. But what should you do when there is nothing to followup on? Invent a reason. Promise something small, even inconsequential, and then deliver it.

Find out when the decision will be made and don’t take literally the client’s statement that they don’t need to talk to you in the interim. You could call the client back to thank them for considering you, or ask if they have any questions about what you’ve proposed, or send an interesting and appropriate article about their business or yours.

If you don’t have a good reason to followup, look for an excuse to stay in touch. When a client asks a question and you don’t know the answer, follow up consistently, even if only to say you’re researching it. Don’t hesitate to call one of the client’s team members who is not involved in the decision making, just to find out how things might be going. Find out what the client thought of a competitor’s presentation. Find out what impressed the client—it can help you in future presentations.

And get the home team lined up—make sure that the client has someone to call when you’re not around, and that the rest of your team understands how important followup is while you wait for the decision.

Richardson actually uses the word “relentless” about finding ways to keep in touch. If you aren’t relentless, she assures you, one of your competitors probably will be. Still, success is always about balance, so you will have to find your way with each client. You don’t want to cross the line and become so relentless that you are perceived as a pest.

After a decision has been made, you must continue to followup, even if you lost. Just because you did not get this engagement does not mean you can’t get the next one. And if you did win, followup is the best way to make sure you get the next round of work from this client.

You need to know what’s going well every step of the way, and what’s not going well so you can adjust it quickly before things get out of hand. The way to partner with a client—and to get referrals – is to constantly exceed client expectations. As Ken Blanchard put it in the book Raving Fans: Discover what clients want, then do more.

August 01, 2007

Have lawyers been seduced by success?

You may be so busy billing hours that you won't have time to read Robert Herbold's new book Seduced by Success. That's too bad, because it's probably a sign that you need to spend fewer hours billing and more hours planning for the future.

Seduced_croppedIf you like money, it's a great time to be a lawyer. In Citigroup's Law Watch survey of "153 US law firms broadly representative of the industry," law firm revenue has gone up 9.8% per year since 2001. But as Bill Gates put it: "Success is a lousy teacher. It seduces smart people into thinking they can't lose." We know lawyers are smart people. Do some think they can't lose?

Herbold's book starts with the history of General Motors, the leading auto manufacturer in the world for nearly half a century. GM was the first company to hit $1 billion in sales, and they did it back in the 1950s, when a billion dollars was a lot of money. As late as the 1970s, nearly half the cars sold in the US were made by GM. Then the world changed and GM didn't. High gas prices, foreign imports, escalating labor costs, globalization and other factors started them sliding downhill through a series of losses. These days, GM's share of the US market is closer to 20% than to 50%, and its future is uncertain.

The book does not predict whether GM will bounce back or go the way of Britney Spears. But it does explain why GM and other large companies have declined in terms of "three destructive behaviors that are created and nurtured by success."

The first destructive behavior is "lack of urgency." As a business development consultant, I spend a lot of time talking to lawyers about the threats from other firms. Some law firms are aggressively increasing efforts to satsify current clients and find new ones. They are taking business away from the conservative firms that are acting as if the world has not changed since Nixon left office. But in the firms that most need to deal with competitors, the reaction is often exactly what Herbold described: lack of urgency.

I am reminded of a conversation a few months ago with the Chief Marketing Officer at an Am Law 100 firm that is currently flying high. She was complaining about her lawyers' lack of support for marketing. They simply would not take the time to do some very basic things to protect their position, even with the one big client who accounted for a sizeable percentage of their revenue. She kept telling lawyers that if they ever lost that client, the whole house of cards could start to tumble. But most lawyers were too busy doing today's work to spend time planning for tomorrow. They had a lack of urgency.

The other two destructive behaviors Herbold describes are are "a defensive attitude toward any kind of new thinking" and an "entitlement mentality." Do those sound familiar?

Most of Herbold's book describes the details of nine "success-induced traps" and how to avoid them. The first trap is "Neglect: Sticking with yesterday's business model." As Herbold says: "You believe that what enabled you to become successful will enable you to be successful forever." Anyone who believes that will be wrong. The only question is when.

As jazz great Miles Davis said in his autobiography: "The world has always been about change." And each time the economy shifts, there are winners and losers. The winners are the ones who were shrewd enough to plan for the future, and lucky enough to be right.

When will the law firm business model change? Many experts believe the answer is quite soon.

According to the 2007 Hildebrandt/ Citigroup Client Advisory (p. 11), a number of factors "clearly suggest that many aspects of the traditional model for structuring and operating law firms may be changing." These factors include more systematic approaches to client relationships and business development, two tier partnerships, the use of contract lawyers and other types of outsourcing, and a new emphasis on "people issues" to retain the most talented lawyers. Put them all together, and as Business Week (9/18/06, p. 43) said last fall, "Few industries seem more ripe for radical restructuring than legal services."

Admittedly, Herbold's book does not discuss how his ideas apply to law firms, and some of his nine factors don't seem particularly relevant to lawyers. If you buy the book, you may tire, as I did, when the details mount in his corporate histories of Microsoft, Fidelity, Sony, DEC, Kodak, Nissan, IBM, Southwest Airlines, and many others.

But I believe that every lawyer should invest in this book and review Herbold's fundamental argument. If you're one of the Am Law 100 partners that earned an average bonus last year ($1.2 million, according to The American Lawyer, May 2007), the book's $27.95 price shouldn't bother you. The critical concepts can be skimmed in less than an hour. Is it worth an hour to consider how to protect your future?