Legal Business Development

How to find new clients (Part 2 of 2)

This list was adapted from my new book the Legal Business Development Quick Reference Guide.  Part 1 can be found here.

Step 5: Get more meetings through referrals 

• See the chapters in my new book on Referrals – How to get more referrals, and Referrals – A checklist of best practices for referral sources.  If this leads to discovering other people who would be good clients, add their names to your list of ideal clients

• If you know someone to meet with, but are unsure of how to proceed, ask others for help.  Your referral relationships are very valuable assets, and you must protect them.

Step 6: Get more meetings through cross-selling

• Do any people who need the services that you provide buy other legal services from your firm?

• Cross-selling sounds like a great idea, but it is a lot harder than most people think. The best way to succeed is to find a compelling reason why it is to the client’s benefit, not your benefit.  See Cross-selling – What works and what doesn’t to define next steps for your action plan.

Step 7: Get more meetings with other people you know

• Do you know anyone who works at one of the companies on your list, or who might know people at those companies?

• Do you know anyone you could take to lunch who could help you learn about these companies and/or their industry?  Who are the key players?  What are their concerns?

• Ask others at your firm whether they know anyone who could help

• Use LinkedIn and other online tools (see Social networking – How should you use it?) to look for possible connections to ideal clients through your law school classmates, former colleagues etc.  (Also see Re-connecting – Six steps to re-connect with past clients and colleagues.)

• Research background info on the web for key contacts at target companies.  Then look for an excuse to contact each, such as inviting them to speak on a panel at your firm or at a national convention.  Or interview them for an article you are writing, and be sure to quote them.

• Create a table listing people who could help you get meetings and how (e.g. introduce you to someone,  help understand the target industry or the target company or help identify the right people to talk to.) Prioritize the potential payoff from each, then set up lunches or face to face meetings with those people.

Step 8: Get more meetings through networking

• Do the people you want to meet belong to particular organizations or attend certain meetings?

• If the answer is yes or maybe, see Networking – How to increase results from networking and Networking – Three steps to prepare for a conference or networking meeting to identify possible action items for your plan

Step 9: Measure results

• Define realistic goals, and measure results

• Signing new business may take months or years, depending on your practice

• Therefore, in addition to measuring new business, you should measure leading indicators so you can see progress, or lack of progress, every week, such as:

  • Time spent on business development
  • Face-to-face meetings with potential clients
  • Client responses (including email and phone)
  • Client advances

• For more ideas, see Follow-up – Sample reports to improve tracking

• If you consistently fail to meet the goals you set, it may be time to re-evaluate your plan

• Does your niche have strong potential for new business?  If you now doubt this, go to Planning – Define your niche.

• Are you willing to reaffirm your commitment?  Every lawyer needs to master the skills to grow business with current clients, but not every lawyer has the time and ability to find new clients. 

• If you are making steady progress, go to the final step

Step 10: Don’t stop

• After you meet with ten people, meet with ten more

• Monitor your progress by recording the time you put in every week.  Keeping a written record will increase your chances of remaining committed to long-term follow-up. 

• Remind yourself: It will take time to find new clients.  But when you do, the payoff could be enormous.

How to find new clients (Part 1 of 2)

This post was adapted from my new book the Legal Business Development Quick Reference Guide which is being published today.

In today’s challenging legal marketplace, finding new clients is more important than ever, and harder than ever.  But if you follow these ten steps, you will find new clients.

Step 1: Define your priorities and how much time you will devote to looking for new clients

• Turn to the chapter (in my new book) entitled Action plan – Your two-page action plan, and fill it out to specify your personal priority for finding new clients, and the time you will devote to it

• Before you begin working on a systematic plan to find new clients, it is important to ensure that you have the resources and commitment required to maximize the chances of success

• We recommend a commitment of at least two to five hours per week, for an absolute minimum of six months.  If you cannot or will not make this kind of time commitment, you should forget about finding new clients.

Step 2: Make a list of new clients you would like to have

• In the “new clients” section of the Two-page action plan, fill in the names of some ideal clients.  (Also see the chapters on Planning – Define your niche and Planning – Define your ideal clients.)

• If you don’t know people’s names, list the companies and job titles of possible clients in your niche.  Compile a list that is as specific as possible, such as:

  • Senior partner in the Bradbury hedge fund
  • CFOs at Fortune 500 financial service companies   
  • General counsel for large biotech firms
  • Leaders of unions with at least 500 members
  • Owners of closely held businesses with 100 employees or more 

• Remember, business development is a numbers game.  You will need a large number of prospects to get a small number of new engagements.  Over time, your list should grow.

• The process of developing new business is based on planning a series of smaller steps to the sale.  (See the chapter on Advances for background.)   If you already know what your desired advance for any or all of the clients in your list, fill in the To Do list on page two of the Two-page action plan.

Step 3: If you can easily arrange a face to face meeting with someone on the ideal client list, do it

• Set up a face-to-face meeting or a lunch to learn about their business and their needs

• Do not try to sell your firm in the first meeting.  Spend the time getting to know the person, and what matters to them.

• Listen at least 50% of the time.  For examples of what to talk about, see Meetings – Checklist to increase results from your next meeting.

• Make sure that your value proposition can be stated quickly and succinctly, and is adapted to the interests of each person you meet.  See Elevator Speech – Six steps to create or improve your elevator speech.

• Keep asking yourself:

  • Why should these very busy people talk to me? 
  • What value can I provide immediately?
  • How can I help these people?
  • What can I give them for free?

Step 4: After you meet with each person, set a goal for how often you should be in contact with them in the future to stay “top of mind”

• After every meeting, ask yourself: Will they buy?  Will they buy soon?  Will they buy from me?  See Qualifying – How to avoid wasting time with the wrong people.

• If they are likely to buy soon from you, set a plan for regular follow-up and meetings

• If you think they will never buy from you, and never help you to sell to others, take them off your lunch list.  But keep sending holiday cards, just in case you’re wrong.

• For everyone else — all the people who may buy some day but won’t buy soon — plan to keep in touch about four times per year so that they will think of you when they need legal services.  See Follow-up – A checklist of best practices for keeping in touch.

Next week’s post will describe six more steps.

Announcing my new book on legal business development

The second edition of my Legal Business Development Quick Reference Guide is being published today.

Like my Legal Project Management Quick Reference Guide, the book is designed for the needs of the busy attorney.  A lawyer need not read it from start to finish but can open it nearly anywhere and find useful business development ideas that are relevant to his or her practice.

This new book will help you develop business more efficiently by focusing on the activities that are most likely to produce immediate and practical results for your practice, your personality and your schedule.

Part 1 of the book describes the “Top ten ways to increase results from your limited marketing time” including prioritize relentlessly, start with current clients, listen, and plan advances.

Part 2 is organized alphabetically to make it easy for you to find exactly the information you need, just when you need it. It includes tools and checklists for everything from the best ways to increase client satisfaction to a list of 67 questions to get a conversation going. It also summarizes marketing experts’ latest thinking on such key topics as alternative fees, defensive marketing, and social networking. 

“This Quick Reference Guide is just what busy attorneys need – a well-organized, well-thought out roadmap to business development actions that are easy to implement. The content is organized to give information on demand, so that professionals can easily find tips and techniques when they need them,” says Despina Kartson, chief marketing officer of Latham & Watkins.

According to Mark T. Greene, chief business development officer of Waller Lansden: “Jim’s Guide is concise and clear, and every section is worth reading. Best of all, it serves as a great reference. When someone new to my team needs to learn about an aspect of legal business development, I point them to a section of Jim’s Guide.”

This second edition updates and combines material from two books which have been used by thousands of lawyers:  the LegalBizDev Desk Reference and Legal Business Development: A Step by Step Guide.

The price is $79.95 plus shipping ($10 in the US, $30 outside the US), with volume discounts of up to 50 percent on orders of multiple copies. The book can be ordered now by email (sales@legalbizdev.com), by phone (800-498-7246), by fax (917-386-2733), or by mail (LegalBizDev, 225 Franklin Street, 26th floor, Boston, MA 02110).  An excerpt from the book and an order form can be downloaded from our web page. 

Legal pricing (Part 4 of 8): Value pricing basics

In the first post in this series, we noted that the two pricing strategies of greatest interest to law firms are cost-plus and value pricing.  Almost all law firms currently use variations on cost-plus pricing, as we described in Part 2 and Part 3 of this series.  But anyone who has ever heard of the ACC Value Challenge knows how important perceived value is to clients today.

If you have thought about applying value pricing with your clients, you have probably read about the work of Ron Baker.  His most recent book, Implementing Value Pricing: A Radical Business Model for Professional Firms, provides an excellent overview of the theory of value pricing, and how it applies to accountants, lawyers, and other professional services firms.

As Baker defines it (p. 233): 

The word value has a specific meaning in economics: ‘The maximum amount that a consumer would be willing to pay for an item.’  Therefore value pricing can be defined as the maximum amount a given customer is willing to pay for a particular service, before the work begins. This is not to suggest we can capture one hundred percent of maximum value, but rather that we have the potential to access some of it utilizing strategic pricing.

Does that sound like price gouging? It’s not. As Stanley Marcus (former president of Neiman Marcus), put it (p. 22):  “You’re really not in business to make a profit, but you’re in business to render a service that is so good people are willing to pay a profit in recognition of what you are doing for them.”  

In cost-plus pricing, cost is known before you set the price.  In value pricing, you start with the price the customer is willing to pay and control your costs to meet that price. 

Baker sums up the difference in these two diagrams:

Cost-Plus Pricing

            Services  » Cost »  Price » Value » Customers

Value Pricing

            Customers » Value » Price » Cost » Services

Baker feels strongly that value pricing should be embraced by lawyers, and that timesheets and hourly billing should be eliminated. 

His web page bio begins with the mission statement:  “To, once and for all, bury the billable hour and timesheet in the professions.” Chapter 17 of his book Implementing Value Pricing is titled “The Deleterious Effects of Hourly Billing” and describes numerous disadvantages including misalignment of interests, a focus on effort instead of results, hoarding of hours, leaving money on the table, and diminishing the quality of life.  Chapter 18 explains why timesheets should be eliminated.  Its title indicates the strength of Baker’s feelings on this issue:  “Why Carthage Must Be Destroyed”.

Baker (p. 160) also emphasizes that value pricing can sometimes produce far more revenue than the hourly approach.  He gives the example of an accounting firm that was engaged to develop an exit and management succession strategy which produced substantial tax savings. Initially the CPA billed at standard hourly rates, but at some point he said to the client “I don’t believe hourly rates [are]… appropriate [in this case]…  You tell me what all the value of this is to you… I know I will be happy with whatever you come up with.”  Ultimately he was extremely happy, because the total payment was “a little bit over $1 million.” 

By then, he had stopped tracking time on this engagement, so it is impossible to say exactly how much he would have gotten on an hourly basis.  However, he did say his prices had “skyrocketed” and reading between the lines our guess is that hourly rates would have totaled less than $100,000.

Any lawyer would love the concept of value pricing if it meant that she could get paid 10 times what she would earn for billing hours.  And many law firms see value pricing as a ray of hope in a troubled marketplace, an opportunity to increase profitability at a time when there are unrelenting competitive pressures to charge less.   

Baker notes that “These types of engagements are certainly not the rule in any firm, they are the exception.  Nonetheless, they do arise, and when they do it is critical to recognize the value you are creating and to utilize innovative pricing strategies to capture it.” 

Companies like Apple have become very profitable by creating consumer perceptions of value, and pricing products like the iPad and iPhone accordingly.  But there is only one Apple, and there are dozens of companies like Dell, HP, Samsung, Lenovo, and Asus who find themselves competing on price.

A small number of the most profitable law firms in the world have been using value pricing for years, just as Apple has.  But they are at the top of the profession and specialize in “bet the company” work.  If a client is defending a billion dollar law suit, or acquiring a powerful rival, or being accused of a white collar crime, she will care much less about the price than about the outcome.

When Jim Durham published The Essential Little Book of Great Lawyering, he estimated such “bet the company” matters at only about 5% of all legal work.  The rest he classified as important matters (65-70%) or commodity work (25-30%). In the six years since Durham published this book, all signs are that legal commodity work is growing, and “bet the company” and “important” work are shrinking.

In my new Legal Business Development Quick Reference Guide, I’ve written about the traditional marketing implications of these three different types of legal work, as summarized in this table:

Type of legal work	Value’s significance in marketing	Relationships’ significance in marketing
Bet the company	High	Low
Important	Medium	High
Commodity	Low	Low

But the world is changing, and when it comes to getting new business, the marketing significance of providing value is going up, and the importance of prior relationships is going down.

A few weeks from now, we will post Part 5 of this series, discussing the nuts and bolts of Ron Baker’s eight steps to implementing value pricing.  We will argue that the problem with value pricing is an expectations gap.  Law firms want to believe value pricing will lead to higher prices and profits.  Sometimes it can.  But in most cases these days, when legal clients say “value” what they mean is “I need to pay you less.” 

 

This post was written by Jim Hassett and Matt Hassett.

The future of legal services: More project management and better collaboration

When the Ark Group asked Patrick McKenna, Dan DiPietro, Bruce MacEwen, Paul Lippe, Pat Lamb, Leigh Dance, Silvia Hodges, Larry Bodine and other leading experts to describe The Future of Legal Services in their new book of the same name, all agreed that this is a time of significant change. 

(Full disclosure:  I wrote the chapter on legal project management.  I will also be participating in Ark’s January 31 webinar to discuss this book including “What does it mean to you—and what are you going to do about it?”)

As Dan DiPietro, Chairman of Citi Private Bank, put it (p. 89): 

“The industry will not return to the golden era of double-digit profit growth any time soon…  But… the silver lining from the financial cloud is that partners of law firms – known to take perverse pride in maintaining the status quo – are more open to change than at any other time in all the years we have been studying the industry.” 

And what does DiPietro think that lawyers should change (p. 90)? 

“To stay ahead of the curve, law firms should consider seizing the initiative by asking how they could deliver legal services in a more efficient, cost-effective manner… Firms now need to turn their attention to project management and strategies to manage their costs.”

As Bruce MacEwen of Adam Smith Esq. noted in his article (p. 6), this approach is not a radical departure from traditional practice, but rather a logical result of changes in the profession:

 “Whether or not you know it, every time you run a matter for your firm, you are engaging in project management.  You can do it in an ad hoc haphazard manner, trying to put out fires as they arise.  Or you can use time-tested, proven tools to manage costs intelligently, to coordinate and organize people and tasks, and to head off surprises before they happen.”

Or, as Pat Lamb of Valorem summed it up (p. 74): 

“There is an enormous role for legal project management (LPM)…  LPM allows lawyers to plan, because frequently time to completion is important.  LPM allows lawyers to budget, because it is now rare that a client is indifferent to cost… [And] LPM allows firms to best utilize their resources; having some lawyers do nothing while others are overworked reveals a problem easily solved…  Every project is managed; some are just better managed than others.”

Of course, the book also describes many other important trends, including the expansion of global firms, changes in the Asian legal market, evolving relationships with in-house counsel, outsourcing, and a trend toward sharing firm leadership by appointing co-managing partners.

Of all the other trends, I was most interested in the increase in collaboration between clients and their law firms.  As Paul Lippe of Legal OnRamp put it (p. 30):

“the practice of law has shifted from an individual effort to one emphasizing teamwork and collaboration…  When firms had a monopoly on expertise, delivery of service was a one-way street.  But now most work involves collaboration and coordination between firms and clients.”

Of course, teamwork is the philosophy that lies behind the fastest growing segment of our business:  Client/firm collaboration workshops.  But that’s a story for another day.

Everything you need to know about legal business development (in seven words)

A few years ago, I wrote a blog post called “Everything you need to know about legal marketing and sales, in nine words.”  (The nine words were: identify prospects, get meetings, listen, get advances, don’t stop.)  But lawyers don’t have time for nine words, so I then cut it to seven: meet the right people, advance the relationships.

Think first about the clients you already have.  These are the people who pay for your office, your car, and your kids’ shoes.  If your clients are taken away by a hungrier, more aggressive competitor, things could get ugly fast. 

I know that the quality of your legal work is exceptional, and that your clients love you.  But sometimes that’s not enough.  There may be other lawyers out there who are almost as competent as you, who will offer your client something cheaper, better or maybe just something new.  If a trophy lawyer comes along, it will be hard to recover.

As Steve Barrett, formerly Chief Marketing Officer at Drinker Biddle (and now a Principal at LegalBizDev), put it, “Once you lose the trusted advisor role, you are on the outside, and it could take five years to get back in.”   You need to protect those relationships with every tool in your belt.

It is also much easier to expand business with your current clients than to find new ones. 

With current clients, you already have the first four words covered—you’ve already met right people.  So “all you have to do” is to advance the relationships.

Failing to focus on your current clients is marketing malpractice.  If you do nothing else:
1.    Hold a free meeting at your client’s office to learn about their business needs.
2.    Listen 50% to 80% of the time.

For new clients, selling is like dating, and anyone who has ever gotten discouraged about romance has heard that you have to kiss a lot of frogs to find your prince.  Most lawyers have time for just a few frogs, so they must focus on the best prospects before puckering up. 

Success in business development demands prioritization, and it is easy to spend too much time with the wrong people.  Too often, the prospects who have the most time for golf and lunch are the ones with no need of your services, and no budget to pay for them.

Therefore, in the qualifying stage, lawyers must focus on the prospects who are most likely to engage the firm within a reasonable period of time.  In essence, they try to answer three questions:
1.    Will they buy?
2.    Will they buy soon?
3.    Will they buy from me?

When the answer to any question is no, the lawyer must move on to the next candidate.  This can be hard to do, because after one has invested time in building a relationship, the natural inclination is to be optimistic this will lead to new business.  This is further complicated by human nature: when you develop a genuine liking for someone, it can be hard to cut back on a business relationship even after it becomes clear that they are not likely to buy.

But hard-nosed prioritization is an important step in any successful marketing campaign.  Once it is clear that a person is not going to buy within a reasonable period of time, they must be demoted from the short list of people who get face-to-face marketing time, and moved to the long list of people lawyers stay in touch with in a more efficient way such as emails and birthday cards.

Meeting the right people starts from a vision of ideal clients and referral sources, and continues with the discipline to focus on the few who are most likely to produce results.  Since many lawyers prefer analysis to action, there is a risk here that they will spend so much time analyzing the possibilities that they don’t have any time left for meetings. If that happens to you, remind yourself that this isn’t a science experiment, it’s business.

If in doubt, pick up the phone and arrange a meeting.  Yes, you must meet face-to-face.  Clients hire lawyers whom they trust and like. You don’t build trust by reading brochures, and you don’t build liking from a web page. The best way to build trust and liking is by sitting face-to-face and listening.  (Notice that I said listening, not talking.) 

Then it’s time for the last three words: “advance the relationships.”  The word “advance” has a technical meaning to sales professionals, grounded in Neil Rackham’s research on over 35,000 sales calls.  An advance is a specific action taken by either party that moves the sale forward, such as scheduling another meeting, getting introduced to someone new, or providing a list of references.  Most lawyers love this concept, because it is so specific, concrete, and logical.

Rackham found that great salespeople succeed because they plan every sales call, and strategize how to get the largest possible advance. His SPIN Selling Fieldbook provides examples and guidance on how to brainstorm possible advances before a meeting, and then select the one that is likely to lead to the greatest progress. This takes effort and practice. But the ability to get advances is often the difference between success and failure.  When you consistently find that you cannot get an advance with a particular prospect, it may be time to move on to someone else.

As Rackham (p. 171) summed it up: 

“If there was just one piece of advice we could give to people to improve their selling, it would be this: Plan your calls….Do you know exactly what outcome you hope to achieve? Plan what to ask, not what to tell.”

This post was adapted from my new book, The Legal Business Development Quick Reference Guide.

 

Free sample chapters from my new book on legal business development

My new Legal Business Development Quick Reference Guide will be published next January.  It is a companion volume to my Legal Project Management Quick Reference Guide, which describes how to deliver more value to clients.  This new book will explain how to find clients in the first place. To download free sample chapters and an order form, click here.  An abridged version of the preface – “How to use this book” – appears below.

I know you don’t have time for marketing.  You can barely find time to go home on Saturday.

But you know that marketing is more important to lawyers than ever before. Whether you are focused on financial security, personal satisfaction, or becoming a great lawyer, the key to success lies in improving your service and your relationships.  That equals marketing.  So you know in your heart that you MUST find a way to fit some marketing time into your overcrowded schedule. 

I have good news and bad news. 

The good news is that lawyers can achieve significant marketing progress in as little as an hour a week, as long as they limit their efforts to current clients and referral sources.  This won’t produce new clients, but it may produce new revenue.  And even if it doesn’t, it will protect your most important asset: the clients you already have. 

The bad news is that finding new clients is the hardest work you can do in a suit.  If that’s your marketing goal, you will need to make a serious time commitment. 

But even here, there’s some good news.  You can substantially increase your chances of success by focusing on the tactics that best fit your practice and your personality.  And even if you’ve never thought of yourself as a marketer, you may find that you have the talent and interest to become a top rainmaker.

Whatever your goal, the keys to legal marketing success are prioritization and follow-up.  You must prioritize tactics based on how quickly they will work for you, and then follow up with efficient action items.  This book provides tools which can help you become more disciplined about prioritizing and become relentless about following up. 

This book is organized alphabetically to make it easy to find exactly the information you need, just when you need it.  Its checklists, samples, reports, and quick references will help you to increase new business more quickly.  Whether you need to create an elevator speech, improve networking, qualify a prospect, plan a meeting, increase client satisfaction, or begin another business development task, this book will provide ideas that will improve your results.

I wish I could say this Quick Reference Guide will make business development easy, but I can’t.  It takes a long time to build the type of relationships that lead a new client to hire a lawyer, and no one can build your relationships for you. 

So if you are looking for a magic cure, you should look elsewhere.  But if you are willing to put time into business development, this Quick Reference Guide will help you develop new business more efficiently by focusing on the activities that are most likely to produce immediate and practical results for your practice, your personality and your schedule.

If you get serious about business development before your competitors do, you may be able to bring in some new business relatively quickly.  When we started working with lawyers seven years ago, we were frankly surprised at how often a simple action led to new business with current clients.  For example, a number of early clients whom we coached decided to offer a free meeting to current clients, simply to learn more about their business.  A surprisingly high percentage of them have walked out of those meetings with new engagements. 

In twenty years of training sales professionals in other industries, we had never seen a free meeting lead immediately to new business with a current client.  But with lawyers, we saw it over and over. 

In describing that success in the first edition of this book, I wrote:

The activities we recommend are still relatively novel in the legal world, so there’s a lot of low hanging fruit.  As more and more lawyers learn how to pick that low hanging fruit, everyone will have to reach higher for what’s left.

Which is exactly what happened.  Many of your competitors have gotten smarter about marketing, and it is harder than it used to be to find low hanging fruit.  However, that does not change the steps you must take to satisfy clients.  Instead, it means that it is more important than ever to keep your clients happy, before somebody else does. 

Can every lawyer really learn to succeed at marketing?  Absolutely.  Only a few will develop into the great rainmakers who bring in new clients, year after year.  But any lawyer who has clients can learn, and must learn, to build stronger relationships. 

Do you need to do this yourself?  Yes.  Many lawyers have tried to hire people to market for them, so that they can spend all their time on the law.  This will not work in the current environment.  Mind you, I am a professional marketer, so of course I believe that people like me are an important part of any business development team.  But I also know that marketing professionals can’t do it alone. 

The only way to grow legal business is to grow personal relationships.  Your personal relationships.  If you need to exercise, you can’t hire somebody else to do your pushups.  And if you need more marketing, you can’t hire somebody else to build your relationships.

Do you want to devote time to developing new business?  Frankly, it doesn’t matter.  Sure, it would be wonderful if you loved marketing. The more you enjoy it, the more likely you are to follow up and succeed. 

But if you want to get paid for working as a lawyer, you must have clients.  Your competitors are getting better at marketing, and trying to take your clients.  The only way to defend yourself is to become a better marketer, whether you like it or not. 

Once you start having some success, I think you will like it.  Until then, just put it in the same category as exercising and do it.

To download free sample chapters and an order form, click here.

Book review: Winning legal business from medium-sized companies

Silvia Hodges’ Winning Legal Business from Medium-Sized Companies  is based on her Ph.D thesis at Nottingham Law School.  Most legal marketing books are based on anecdotes and experience.  This one is based on the type of systematic research evidence that lawyers love.  (I do too.)   

Hodges’ central finding was that medium-sized companies care most about predicting and controlling legal costs.  While law firms often like to sell the value of customized solutions, these clients aren’t buying it.  They are quite content with standardized and packaged solutions, and are willing to sacrifice some sophistication as long as it saves them time and money. 

The key reason medium-sized companies are different from their larger competitors is that their decision makers are different.  In Fortune 500 firms, the buyer of legal services worries about justifying and defending her decisions to her manager or her board.  This leads to a conservative mentality that favors hiring law firms based on reputation, so that the decision maker will not be blamed if anything goes wrong.  As they say in the computer business, “No one ever got fired for hiring IBM.”  

In contrast, in medium-sized companies the legal decision maker is likely to be the CEO or an entrepreneur who reports only to himself.  They don’t care about buying the safe brand.  They care about solving a problem for the lowest possible cost.

When clients in Hodges’ study talked about their ideal lawyer, they used words like flexible, fast, efficient, effective, results-oriented, honest, and sincere; “in brief, having the same qualities they pride themselves on” (p. 72).

Hodges’ interviews led to some specific advice for lawyers who are marketing to medium-sized clients, including:

• Be pragmatic, flexible and down-to-earth, so you will be perceived as speaking the client’s language.
• Try to get satisfied clients to recommend you to new prospects.  Word-of-mouth is especially powerful in this group.
• Avoid legalese.  Newsletters should be written in a “pragmatic, journalistic style” (p. 71), and summaries of legal analysis should be in plain English.
• Repay loyalty by offering discounts.  “Law firms charging for every detail are strongly disliked” (p. 71).
• Be prepared to offer alternative arrangements such as fixed fees and caps in order to meet client demands for predictability and cost consciousness.
• When clients need a recommendation of a lawyer in another jurisdiction or country, be very careful to recommend only lawyers you are sure of.  Decisions may be made quickly based on your word-of-mouth recommendation, and if there is a problem later, you will be held accountable.

I trust these findings more than what I read in most marketing books, because they were based on systematic research. It brought me back to my academic days on dissertation committees. 

Hodges focused on “medium-sized” companies (those companies with fewer than 250 employees and annual revenues below $70 million) because they represent the “economic ‘bread and butter’, for many law firms”  (p. v).  

Her conclusions were based on interviews with 34 buyers and providers of legal services in the European Union.  She used “snowball sampling”, in which each participant named others to talk to.  The questions focused on how medium-sized companies buy legal services, and whether marketing approaches should differ from those used with larger clients.

I must admit, some of the conclusions made me wonder about the limits of an academic research approach in a profession that is changing rapidly.  It can take years to conduct research with academic rigor, and report the results.  But what happens to your conclusions if the world changes while you are writing your thesis?

But when I change hats and evaluate this from my current perspective as a legal marketer, I have absolutely no doubt that the trends that Hodges studied in European firms a few years ago apply to many US firms today. 

In my judgment, Hodges’ advice against traditional marketing approaches – including the view that many events, sponsorships and advertising campaigns waste money – applies not just with medium-sized clients but also to many large clients.

True, there is still a market for “bet the company” matters, where clients are not very concerned with price.  But that market is shrinking, and the market for efficiency is going up.  When the Wall Street Journal starts publishing articles about how companies like Toyota, Sun Microsystems, GlaxoSmithKline, and eBay are using reverse auctions  to drive down legal prices, you know that efficiency matters.

So if I managed a law firm, I wouldn’t care whether my target clients were medium, large, or small.  I’d build my marketing around providing more value.

 

Book review: Project management for lawyers

Buy this book. (Right after you buy mine.)

Project Management for Lawyers was written by two experts in this emerging field: Barbara Boake, a senior partner at McCarthy Tetrault, and Rick Kathuria, a certified Project Management Professional at the same firm. The book draws on their experience developing and implementing McCarthy’s Dialogue Project Management system, so it is heavy on the kinds of “lessons from the trenches” that lawyers will find invaluable.

And if that’s not enough, Part Two of the book includes additional case studies written by experts from Dechert, Eversheds, and Seyfarth Shaw, and one from the client perspective at the Royal Bank of Canada. And if that’s still not enough, it comes with a CD filled with forms, templates and checklists, including a generic work plan, a client satisfaction review questionnaire, a project risk log, a sample staffing plan, and a sample change request form.

Chapter 1 makes the business case for project management, starting with the fact that “clients want to see a clearer link between the cost of legal services and the value of those services to their business.” The authors also note that “The market has placed a premium on predictability, efficiency and cost control” and “Alternative fee arrangements pose a threat to firm profitability unless they can be priced and managed using some kind of project management framework” (p. 6-7).

But the real value of the book lies not in the why of project management, but in the hard won wisdom of how to make it work.

Consider, for example, what Ben Barnett and Colleen Nihill, authors of the Dechert case study in this volume, have to say about letters of engagement (p. 79):

In the after glow and rush of a new client matter, scant attention is normally paid to defining specifically what the client has retained you to do. This oversight can haunt and even derail the entire project. Most of the problems in project management have their genesis in the failure to define.

Or consider Boake and Kathuria’s step by step guidance on defining new work, including this advice (p. 35):

Review the assumptions with your client to ensure that they are fully understood. If you discover that an assumption is incorrect at the beginning of a matter, it is easily addressed with a revised plan and estimate. The same cannot be said for assumptions that are found to be incorrect at the end of a matter.

Or read the expanded version of these four “rules to live by” (p. 14):

• “Project management is a tool box – choose only what you need to most effectively manage the project.
• "Plan now or pay late.
• "The simplest process is often the best.
• "There should be no surprises – regular and effective communication is the key to successful project management.”

That is not to say that I agree with 100% of the advice in the book. For example, when it comes to estimating time and costs, they include two formulas and an extended discussion of how to use “a numerical measure of confidence known as a ‘certainty factor’” (p. 29). Their sample asset purchase transaction plan (p. 32) shows how they have used certainty factors to improve time estimates for such subtasks as term sheets and due diligence. In my experience, few lawyers would be interested in, or benefit from, this type of statistical refinement. I think these particular spreadsheets and forms violate their own advice that “the simplest process is often the best.”

But my objections are just minor points.

Lawyers will love the specificity of the book’s case studies. And the step by step examples will go a long way to helping them answer the most important question in legal project management: what should I do?

There’s just one more thing you need to know about this 118-page book/CD package: it costs about $470 (£295). The Ark Group, in association with Managing Partner magazine has published a series of reports at this price point, including Alternative Fee Arrangements: Value Fees and the Changing Legal Market by Pat Lamb, which I reviewed last year. 

If you don't have the budget to buy these two books for yourself, have your firm order them for the library.  Then make sure to read them as soon as they arrive.

How to define legal project management

When I give speeches, I usually include a slide that defines legal project management.  But until recently, I had not been satisfied with my own slide.  Legal project management is an emerging area, and no one can be sure what it will look like in a few years.  Which makes it hard to define the term in the meantime.

In April 2009, when Paul Easton started the first blog in this area, his first substantive post was titled “Defining legal project management.”  It included an interesting discussion of how the term differs from case management and this definition: “the application of widely accepted project management standards, such as those promulgated by the Project Management Institute, to legal matters.”

In the Three Geeks post which I discussed last week, Steven Levy offered a similarly straightforward definition: “Legal Project Management is the application of the principles of project management to legal cases or matters.” 

Those definitions are certainly accurate and may in the end prove to be the best approach.  But given the ambivalence of many lawyers to this new field, at least for now I prefer a definition that goes beyond the basics and includes intent.  For example, consider the results-oriented definition that Barbara Boake and Rick Kathuria offer in their new book Project Management for Lawyers: “Legal project management provides a structured approach to planning, pricing and managing legal work that will bring a law firm’s service delivery model in line with the changing expectations of its clients.”  (I will review Project Management for Lawyers in a few weeks.  Meanwhile, here’s a preview: Buy this book.  Right after you buy mine.)

This is similar to the definition we use at LegalBizDev: Legal project management adapts proven management techniques to the legal profession to increase client value while protecting law firm profitability. 

We see it as an umbrella term, which embraces a very wide range of management techniques. 

For example, personal time management is barely mentioned in the traditional Project Management Institute curriculum, or in most project management texts.  But for some lawyers, it is a vitally important skill which can increase value and profitability.  So the topic is discussed in my book and we focus on it in some of our training programs.

Like the authors of Project Management for Lawyers, we believe that “Project management is a tool box – choose only what you need to most effectively manage [each] project” (p. 14).  In our view, even the holy grail of five project management processes – initiate, plan, execute, monitor and control, close – may be ignored in some training programs.  The key to success, we believe, is to find the low hanging fruit, the management tactics that are most likely to help each individual to increase value and/or profitability.

Admittedly, since our definition is based on intent, it could have a limited shelf-life.  If the legal environment changes, and less emphasis is placed on value and profitability, our definition may need to change.  But for now, we believe it is important to state not just what legal project management is, but also what it does: increase client value while protecting law firm profitability.