« March 2008 | Main | May 2008 »

7 posts from April 2008

April 30, 2008

Self-test: How efficient are your business development tactics?

Note:  This test is for partners and senior attorneys.  Associates are different.

Do you have a marketing To Do list?

Can you name the top marketing tasks you need to accomplish?  If you can consistently do that without ever writing anything down, I am jealous.  But if you’re like me, you’ll need a written list, in Word or Excel or Outlook or on the back of an envelope.

Desk_reference_cover_with_border

If you don’t have a marketing To Do list, start one. Maybe it simply has two columns – one for the client’s name, the other for the action item.  Or maybe you need more columns to track priority, deadlines, your most recent contact with the person, and more. 

The ideal format will vary from lawyer to lawyer.  The best format for you is the simplest one you can work with.  The simpler it is, the more likely it is that you will keep it up to date and continue to use it.  For sample formats, see The LegalBizDev Desk Reference, pages 61-68. 

Are you prioritizing properly, so that you concentrate on the tasks that will produce the greatest results?

You must constantly prioritize activities, and keep returning to the question:  “What should I do today to increase new business?” 

No one has enough time for business development.  Even sales professionals who devote 40, or 60, or 80 hours per week to this task must make hard choices every day about what will and will not get done.  Lawyers who have trouble finding five hours per week for developing new business, or one hour, or five minutes, face a much greater challenge.

For some lawyers, the answer is “simply” to place the highest priority on tasks that are most likely to yield the type of clients you want to work with, and the types of matters you prefer to focus on.  That’s easy to say, and hard to do.

If you need to step back and think about the type of work you should focus on, see my blog post on “How to Define Your Niche.”

Is every one of your key clients a raving fan?

Whenever I give a speech to a group of lawyers, I ask how many think their top clients are satisfied.  Almost everyone thinks they are.  But systematic surveys tell a different story.

In a 2007 survey of general counsel, Inside Counsel magazine asked lawyers to grade their overall performance with clients as A, B, C, D, or F.  62% of the lawyers thought they were earning an A.  But when they asked clients the same question, in fact only 19% earned As.  In other words, more than 2 out of every 3 lawyers overrated their performance.

What’s more, the critical question is not whether your key clients are satisfied.  It is whether they are raving fans.  Note that I keep asking about key clients, not all clients.  As consultant and lawyer Gerry Riskin has noted “You can’t superplease everyone at the same time. You need to discriminate.” 

For advice on how to turn clients into raving fans, see my blog posts on Gerry’s concept of “bulletproofing your crown jewel clients”, my post on The top 16 ways to increase client satisfaction, and a list of over 40 best practices in The LegalBizDev Success Kit.

In case you haven’t heard, the economy isn’t doing too well, and other lawyers are coming after your clients.

So no matter how happy your clients are, it is always a good idea to make them happier.

Do you spend enough time on business development?

For lawyers, one of the most difficult and most important questions is how much time to devote to business development.

One fundamental law of marketing is that if you spend no time, you will get no results.  The best plan in the world will produce nothing unless you follow up, week after week after week.

How many hours will you devote to business development each week?  How should you strike a balance between bringing in new work and paying the bills by doing the work you already have?  Not to mention finding the time to go home before your kids grow up. There are no easy answers, and every person who provides services for a living—including lawyers—must constantly struggle with this question.

In my book, Legal Business Development: A Step by Step Guide , I recommend an absolute minimum of at least one hour per week if you are focusing on current clients, and three hours per week if you are looking for new clients. Remember, this is not my recommendation for a goal, it is my recommendation for an absolute minimum.  For more advice, see my post on how much time should lawyers spend on business development?

Do you track your business development time and activity every week?

As sales guru Tom Snyder put it:  “Measurement is the engine of change.”  When we coach groups of 6 or more lawyers in our platinum programs, we measure the time people put in every week, and report it to the entire group.  The simple fact that time is being tracked and reported increases the time that lawyers spend.  For advice on how to do this if you are working by yourself, see The LegalBizDev Desk Reference, page 66. 

Do you delegate all the work you could, to leave more time for business development?

I’m going to take a wild stab at this one, and guess that you are reluctant to delegate because other lawyers are not as good as you are.  If that is indeed how you feel, watch for my post on “How to Delegate” which will appear in a few weeks.

If you answered no to any question above, turn it into a yes.  And if you answered yes to every question: Congratulations.  Now stop reading this blog and get back to bringing in new business.

April 23, 2008

What are the top marketing priorities in a down economy? Part 1

A few months ago, a number of influential legal bloggers wrote to warn of a coming legal downturn, including Gerry Riskin, Larry Bodine, and Pat Lamb

Well now the downturn is here, and the blog discussion is becoming more pointed:  Exactly what should legal marketers do about it? 

I agree with the post by my LegalBizDev partner Tom Kane (see How To Be a Strong Marketer in a Weak Economy), that when business goes down, marketing should go up, or at least hold steady.  As Bruce Marcus eloquently put it:   “It’s true that when times are tough, it's easier to cut costs – including marketing costs – and to hunker down until it's over.  But that's like drilling a hole in the bottom of a flooded boat to let the water out. For a professional firm in an economic crisis, there's no place to hide, so learn to fight back.”

While many experts have written in favor of spending on marketing, this will be a tough sell to any business owner facing a financial squeeze.  As someone who has owned a business for the last 23 years, I’ve been squeezed a few times myself, both by broad economic trends, and by industry-specific challenges.  In some of these cases, I did the right thing and spent more on marketing.  But, I must confess, sometimes I gave in even when I knew better, and cut marketing expenses.

At law firms, dozens or hundreds of partners must reach a consensus.  Some of them never believed in marketing in the first place.  So I have no doubt that financial pressures will lead some law firms to cut marketing budgets.  I’d like to believe that the majority will be wiser than that, but we’ll just have to wait and see.

For today, I’d like to put aside the emotional question of how many dollars to spend, and focus instead on how to allocate the time and money you do have.  What are the top marketing priorities in a down economy?  That question remains relevant whether spending goes up, down, or sideways.

In my opinion, the answer is simple:  in a down economy, law firms should focus on increasing short-term marketing results and efficiency.  Long-term tactics that make perfect sense in times of prosperity – like developing a new brochure, or turning a good web page into a great one, or trying to build relationships in a new industry with expensive sponsorships – become much more risky when times get tough.  The longer the time frame until you can see a payoff, the more likely that people will quit before they get there.  And some tactics may even backfire when the economy turns.  Those expensive dinners and sports tickets that strengthen personal relationships when times are good, can make clients resentful when times are bad, if they think their lawyers are doing better than they are.  Forget the luxury boxes, and focus instead on providing more value. 

As I wrote in my January post,  The first thing lawyers should do in a recession, the best way to increase short term results is to focus on current clients. 

The discussion of marketing efficiency is particularly vital now because when billable time goes down marketing time can go up.  Non-billable time can be your most valuable asset, or it can be worthless, depending on how you use it.

Most of the lawyers I’ve met over the years are not efficient marketers.  How could they be?  They never studied marketing in law school, and many lie somewhere between skeptical and hostile about its relevance to the legal profession.

I’ve written before that business development is the hardest work you can do in a suit, because it takes a long time, and what works best varies from person to person.  There are no magical solutions.  If you want to know what works best for your practice and personality, you’ll need to spend some time experimenting and measuring the results.  And the most efficient way to experiment, is with the help of your in-house business development staff, or an external coach.  (If you’d rather work independently, see my list on Amazon of the top sales and marketing books for lawyers and our LegalBizDev Success Kit.)

It will also be interesting to see how the down economy affects each firm’s pricing and positioning.  When an item on The Current Downturn appeared in the Wall Street Journal’s Law Blog, some of the comments it generated were from inhouse lawyers who saw a silver lining, like the one who said:  “I think I’ll start pushing back harder when my outside counsel ask me for their usual rate increases.”

In a great post called In a Weakening Economy Will Clients Trade Big Law for Innovative Small Firms?  Susan Cartier Liebel described how consumers react to recessions by trading down from steak to chicken, and then spelled out some implications for small firms.  Her argument applies equally to mid-sized firms that can undercut large firms, and to large firms that undercut each other. 

I would also recommend Bruce Allen’s posts summarizing a talk he gave at the Harvard Business School Association on "Driving Success in a Down Economy - Marketing Strategies for Business Professionals."  Among his main points:

• Don’t Follow The Herd
• Don’t Spend Less, Spend Different
• Feed Your Clients Sunday Dinner
• Down-Size Your Offering
• Start Dating Your Clients All Over Again

I certainly can’t explain these points better than Bruce did, so read these posts.

My own advice will be summarized in a speech I am giving at a firm with over 1000 lawyers this Friday on “The Top Five Ways To Increase Your Legal Marketing Results In A Down Economy.”  They are:
1. Protect your clients and referral sources
2. Increase the perceived value of the services you offer
3. Refine your search for ideal new clients
4. Track your marketing time and activity
5. Spend wisely

I will write more about each point in the future, and expect this series to continue on and off for as long as the economy is down. 

Meanwhile, I also want to know how my legal marketing colleagues see these issues.  Do I believe coaching is especially important now because my company offers coaching?  Will those who specialize in web pages, advertisements or events have compelling arguments in favor of focusing on each of their specialties?  This morning, I will post this question on a discussion board for Legal Marketing Association members:  What are the top marketing priorities in a down economy?  I’ll let you know what they say.

April 22, 2008

West Legalworks Webcast on April 29

Next Tuesday April 29 at 1 PM Eastern time, Arnie Herz and I will present a one hour webcast entitled “Critical Relationship Building Skills for Lawyers.”    It’s one of those topics that they probably should have covered in law school, but didn’t:  how to build relationships that lead to more new business.

You can even get one CLE credit if you practice in one of the 13 states listed on the site

April 16, 2008

Helping lawyers to focus on client needs

A shorter version of this piece appeared in the March/April issue of Law Firm Inc

Iris_jones2 When Iris Jones was appointed Chief Business Development and Marketing Officer at Chadbourne & Parke last summer, one of her chief goals was “to help lawyers look behind the curtain and understand what clients really want and need.”

When lawyers talk to potential clients, their natural inclination is to impress people with the depth of the firm’s talent and experience.  But Jones points out that clients are more interested in themselves.  They want to see evidence that their needs are understood, and that the law firm will be able to find the legal approach that best addresses each challenge. 

Since Chadbourne is an AmLaw 100 firm with 400 lawyers from New York to Dubai, winning RFPs (Requests for Proposals) is a critical step in bringing in new business, and that’s where Jones concentrated her efforts in her first few months at the firm. 

She defined a new formal “Business development proposal process” that begins the moment an attorney decides to respond to a particular RFP, and includes several steps to help attorneys see things from the client’s perspective, so they can directly address what clients really want and need. 

When it comes to proposals, she says, some competitors specialize in “killing trees for spiral booklets filled with achievements and bios” as if a law firm consists simply of “order takers, flipping burgers and pushing them out the window.”  At Chadbourne, marketing’s role begins with due diligence seeking insights into what the client really wants from the RFP, and what they expect to see in the winning proposal.  Why is the client asking each question?  Which questions are most urgent? 

Staff members use LexisNexis’ atVantage and other tools to study competitive intelligence.  Some marketing departments just print out these reports and hand them over “for partners to read after dinner.”  At Chadbourne, business developers digest the information, and suggest how lawyers can tie it back to specific requests in each RFP.

To understand how the process really works, consider one of the first proposals Jones worked on at Chadbourne.  When she read the 40 page RFP, “some of the questions were ridiculous… even Zeus couldn’t deliver everything that this client asked for.”  Jones worked her way through this long wish list, to focus lawyers on the few questions that would make the most difference to genuinely meeting the client’s legal needs, and to winning the competition.  Then she did a hard-headed analysis comparing what the client wanted with what Chadbourne could deliver. 

In this particular case, she spotted a potential weakness:  most of the lawyers who specialized in this area were located in the firm’s New York office, but the client was near their London office.  In Jones’s judgment, Chadbourne’s London practice group would not be large enough to satisfy this particular client.  So she recommended a joint venture with another London firm, and the lawyers agreed. 

Apparently, the client did too because Chadbourne made it to the short list of three finalists.  Then the client scheduled an interview.  Jones conducted a dress rehearsal, in which she played the client’s role.  When the lawyers started to sound like lawyers – going on at too great a length about all the possibilities – she encouraged them to find simpler answers that were equally accurate, but more directly responsive to the client’s request.

After the role plays, she made some suggestions.  In once case, she thought that the best thing one particular lawyer could do was agree to be quiet at the meeting.  He didn’t like it, but he did agree, and Chadbourne won the business.

This win and others helped spread the word that Jones’s new approach could bring in new business.  As a result, her department was involved with 3 RFPs in the first month that she started the initiative, 8 in the second, then 22, then 35.

Why are so many law firms marketing the old way, when relatively simple changes can increase their win rate so substantially?  Jones believes that it is because the economic environment has been so strong that almost any approach can win some of the time.  She says that many law firms think, “The money has been flowing in for the last few years, so why change?” If that interpretation is correct, business developers can expect to see some substantial changes now that the legal profession is headed into a recession.

April 09, 2008

The most important trends in legal business development (Part 5 of 5)

Value.  At one level, everything comes back to price.  But at a more fundamental level, the price that clients think is fair is based on their perception of value.

Lawyers typically believe that the quality of their legal work is a competitive differentiator. Clients do not. At the LMA panel, Mary K. Young put it this way:  “Quality of legal work is a given, but truly responsive client service is hard to find.”  It includes:
• “Solutions that achieve business needs, not legalistic responses
• Meeting or exceeding deadlines, and
• Projecting costs and managing the billing process...”

To win in this tougher environment, law firms must change the very way they do business and, according to panelist Leigh Dance it requires firms to:
• “Prepare to be one step ahead: measure and prove your value proactively
• Improve transparency in budgets and estimates and allocation of resources
• Demonstrate and promote efficiencies
• Offer value added services free”

Wait a minute.  Did she say free? Yes she did.  LMA panelist Norm Rubenstein also talked about the competitive benefits of offering “a host of unbilled products and services dedicated to relationship development, including CLEs, intellectual property, and loaned staff.”

Predicting the future.  These are hard pills for law firms to swallow, since what is free for the client comes straight out of the partners’ profits. Why give away something for free, if you don’t have to?

As Nobel prize winner Niels Bohr famously put it, “It is very hard to predict, especially the future.”  It is human nature to deny that there is a need to change.  The experts may be wrong about the future payoff from free services, but you can be 100% certain that you can increase profits per partner in the present by avoiding free giveaways.

Over the next few years, we’ll see who’s right.  I side with the many observers who think that these critical trends will continue to transform the legal profession:

Past

Future

Clients are loyal

Clients look for the best deal

Social relationships are critical

Value relationships are critical

Process can be hidden

Process must be transparent

Price is a given   

Price is constantly re-negotiated

Value is assumed   

Value must be proven


What about the present?  Where do law firms stand today on these issues?  There is no simple answer, because we are living in a time of transition.  The emphasis varies from client to client, from firm to firm, and from one practice group to another.

Some lawyers will refuse to accept this argument until it is too late.  Who wants to believe that firms should spend much more on client satisfaction?  And maybe spend much less on season tickets, expensive dinners, and golf junkets? 

So some lawyers will continue to operate as they always have, until the day that they lose the large clients who have been paying the rent.  Then there will be weeping, gnashing of teeth, and calls to the business development department.  But it will be too late.  As Steve Barrett, the Chief Marketing Officer at Drinker Biddle put it, “Once you lose the trusted advisor role, it can take five years to get back in.”

This series of posts is an expanded version of an article I published in the March 2008 issue of Marketing the Law Firm, titled "Legal Sales & Service: The Most Important Trend in Legal Business Development."  To download a .pdf file that includes all five parts of this series, go to the Free Resources section of our web page.

April 02, 2008

The most important trends in legal business development (Part 4 of 5)

Process.  Very simply, general counsel are being held accountable by their management, and their management is being held accountable by shareholders.  In this type of environment, it is professional suicide to award business to people simply because they take you to Giants games.

In the 2007 LMA panel, Norm Rubenstein talked about the pressures inside counsel are feeling for both accountability and transparency.  Among other things, he recommended that law firms help inside counsel “measure and communicate the value that the inhouse legal department provides the rest of the company.”

“[Another] thing that’s different these days,” according to Iris Jones, Chief Business Development and Marketing Officer at Chadbourne & Parke, “is that clients demand to be much more involved in decision making. There was a time when clients expected lawyers to handle matters for them, and were not as involved in the details. The client’s role was simply to pay the bills. Now clients are looking for efficiency, cost savings, and value added.”

Price.  Sooner or later, this discussion must turn to price, since that is so often at the heart of the matter.  In a recent survey of large law firms and their clients, Inside Counsel magazine reported that “Most of the friction between law firms and their in-house clients can be traced back to costs.” Just 7% of lawyers think law firms make too much money, but 43% of clients do. 74% of lawyers say that law firms are actively seeking out ways to reduce legal costs. They’re not doing very well, because only 11% of their clients agree. Worst of all, 42% of clients (and 6% of lawyers) agree with the statement “most law firms pad their bills.”

In its 2008 Client Advisory, Hildebrandt notes that clients are increasingly pushing back on firm rates and billing practices, as seen in “the widespread use of RFPs for legal services, the growing client perception that some types of legal work previously thought to be highly complex (like project finance) have now become routine and should be priced accordingly, the involvement of corporate procurement departments in outside counsel selection, client insistence on multiple year rates or other kinds of rate freezes or discounts, and the ongoing patterns of ‘convergence.’ (page 6).”

What should law firms do to control costs and meet client needs?  One thing is to manage budgets to assure that there are no surprises.  In the 2007 LMA panel, Mary K. Young noted that in-house counsel are increasingly expecting:
• “Projects to be assigned in segments
• Bills that match the projected segments
• Early consultation when circumstances warrant a change from a forecast.”
Then there are the matters of rates, and of hourly billing, which could easily lead to an article many times longer than this one.  In this context, we will limit the discussion to one quote from the DuPont legal model web page:  “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.”

To date, there’s been a lot more talk than action along these lines.  However, the Hildebrandt 2008 Client Advisory (p. 17) does note that “project pricing...has become a growing trend in Europe and Asia even for complex transactional matters such as M&A work.”  The billable hour isn’t going away any time soon, but any firm that can offer alternatives is likely to benefit in the long run.

Next week, this series concludes with a discussion of value, and the future of the legal profession.

This series of posts is an expanded version of an article I published in the March 2008 issue of Marketing the Law Firm, titled "Legal Sales & Service: The Most Important Trend in Legal Business Development."  To download a .pdf file that includes all five parts of this series, go to the Free Resources section of our web page.

April 01, 2008

The first public Train the Trainer workshop in legal business development

We now interrupt our five part series on legal value for a brief word from our sponsor.

Have you heard about the LegalBizDev Train the Trainer Workshop in Boston June 5?

The first legal business development event I ever attended was a RainDance Conference organized by the Legal Sales and Service Organization (LSSO).  (The 2008 RainDance Conference is in Boston May 6-8; hope to see you there.)  I got into a conversation with Beth Cuzzone (one of the founders of LSSO, and the Director of Business Development at Goulston & Storrs) who explained that law firms were building large internal staffs and they needed more tools and standardized approaches so that each firm did not have to reinvent the wheel.  One thing that law firms really needed, Beth said, were “train the trainer” programs. 

As you may know, train the trainer programs are a standard operating procedure in most businesses because they:
• improve the quality of teaching and coaching
• achieve results more quickly and effectively
• present concepts and techniques more clearly
• make sure that new learning “sticks”
• reduce the time required for effective coaching
• assure consistent coaching
• prepare coaches to handle problem situations
• assure a professional team image

When Beth told me that legal business deveopment lacked train the trainer programs, it sounded like an entrepreneur’s dream.  My company had 20 years of experience developing and delivering train the trainer programs for financial institutions and government agencies.  Here was a multi-billion dollar profession that needed our expertise, and not a single competitor that had ever conducted a public program like this.

Success_kit_thumb2 I later learned that it would be a rather long dream since law firms move so slowly.  But now Tom Kane and I are finally offering the profession’s first public train the trainer workshop, on June 5 in Boston.  This one day workshop will enable coaches to help lawyers get more new business more quickly, by using The LegalBizDev Success Kit.

In-house legal business development professionals will review tactics and practice using tools to save lawyers time and increase results.  It is designed for experienced professionals who already know what lawyers must do to increase business, but have trouble getting them to do it. 

For the agenda and details, Download TrainTrainerWorkshopLX.pdf.   

Our regularly scheduled programming (Part 4 in my series of posts) will resume tomorrow.