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February 03, 2010

The keys to new business in a changing economy (Part 1 of 2)

This two-part series is based on a presentation I gave on January 27 at the Annual Meeting of the Commercial and Federal Litigation Section of the New York State Bar Association.

When the economy changes, lawyers must change too.  New client demands and new levels of competition are requiring lawyers to rethink the way they develop business.

When I wrote the book Legal Business Development: A Step by Step Guide a few years ago, I outlined the steps each lawyer should take to find their unique individual answer to the question, “What should I do today to increase new business?”

The fundamentals of marketing have not changed since then, but the world has.  In the current economy, every lawyer must focus first on defensive marketing – protecting the clients and referral sources they already have – and on providing clients with more value.

If your practice is based in part on repeat business from large clients, you know how strongly law departments are being pressured to cut costs.  When I interviewed AmLaw 100 chairmen, senior partners and C-Level executives recently for The LegalBizDev Survey of Alternative Fees, one question I asked was, “There is a lot of price pressure these days, and some say it is leading firms to bid on projects as loss leaders in a way that is not sustainable.  Have you seen any examples of this?”

Every single participant said they had.  As one put it, “Many firms are willing to discount their fees in order to keep people busy.  People do what they have to do; it’s a jungle out there.”

If you are one of the lucky few who have not yet felt these competitive pressures, maybe you’re not worried.  Your top clients have worked with you for years.  You’ve sat through many a ballgame together, and they know in their hearts that you are not just the best lawyer on the planet, but also a heck of a human being. But do you think they might be just a little tempted to give another firm a try, if they could save a lot of money?  How about if their management was pressuring them to cut costs?

And your client’s opinion of your work may not be as high as you think it is.  In a series of surveys, Inside Counsel magazine has compared ratings of satisfaction from clients and the law firms who serve them.  In their most recent survey, 43% of lawyers thought they were earning an A for their work, but only 17% of their clients agreed.   So if you think you’re getting an A, you could be wrong.

If you agree that defensive marketing would be a good idea, where should you start?  Review tactics that have worked at other firms, quickly pick out an item or two that fits your practice and personality, and give it a try.  Here are five of the best tactics to increase client satisfaction:

•    Schedule a free visit to a client’s office to discuss the client’s business needs, or free monthly meetings, or telecons “off the clock.”
•    Conduct a formal or informal client satisfaction interview.
•    Ask the client what needs to be improved – responsiveness, timeliness, and/or value – and brainstorm together about how to accomplish this.
•    Improve communication about the business implications of legal matters.
•    Promote efficiencies to reduce cost, and tell clients about them.
For many litigators, referral sources are the most important source of new work, and they should be treated as if they were paying clients.  Here are some tactics for increasing the satisfaction of referral sources:
•    Update people promptly and regularly on your results with each and every client they’ve sent to you.
•    Ask yourself, “What has helped build this relationship in the past?” and do more of the same.
•    Take them to lunch and ask, “How could I help you?”
•    Schedule a visit to the referrer’s office to discuss trends in their business.
•    Ask them to describe their ideal clients, then try to help them find some.

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