2013 – No Time to Run and Hide
Last February, the groundhog Punxsutawney Phil came out of his hole, looked around, and snuggled back into his den until springtime. He saw the continuing down economy, recession, housing bust, unemployment, and election uncertainty, and hunkered down into his comfort level. When he finally came back to life, it was to pick the “low hanging fruit.” Alas, that fruit had been eaten by others while he basked in the glory of business-as-usual.
Don’t be the law firm version of Punxsutawney Phil. Growth in a free market is there to be gained, even in a down economy. But for firms to pursue legal business development, two questions need to be answered: First, how can your firm exploit the current marketplace? And second, what long-term strategic and pragmatic business development lessons can you learn, firm size notwithstanding, from the knowledge that has driven legal services purchasing during the past four to five years?
“Tag – You’re It.”
Business development is rarely simple or easy. But marketplace fluctuations raise problems for clients as well as for law firms. Those who prepared contingency plans, or learned from the past four years, are now prospering. They are the “it” as in hide and seek’s “tag, you’re it.” (Except in our version, of course, you want to be “it.”) They are out from behind the trees and actively pursuing new business, and 2013 will be no exception for them.
“Ready or Not, Here I Come.”
Your firm is ready to get a head start for 2013. By answering the previous two questions, and understanding where you really are and where you want to go, you have established an entry point. But before focusing on a range of actions that contribute to business growth, let’s take a quick look at statistics that may pose unexpected obstacles to your growth efforts.
According to BTI Consulting, in-house counsel terminating an average of two long-term firms each year. Our firm’s recent U.S./Canada Client Retention survey indicated that one of the top reasons for this is lack of communication. And 35 percent of our respondents indicated they lost up to 14 long-term clients in the past three years.
Another obstacle to business development efforts comes from a recent Harvard Business Review article, which states that four contacts are the minimum needed before closing a sale. More typically, it’s eight to 10 contacts. Your experienced business developers know this. Getting the folks out from behind those trees and in front of prospects will become more of an ongoing effort. To further confirm this obstacle, Chet Holmes in his “Business Breakthroughs” indicated that only 3 percent of your current prospects are ready to buy.
“Marco.” “Polo.” “Marco.” “Polo.”
Newer partners, senior associates and even younger associates have been given their marching orders – seek out new opportunities, pursue leads, get in front of prospects and close those deals. As Marco says, start popping up whenever and wherever there are prospects.
A few of the basic business development tools that are simplest to implement are discussed below. They are designed for firm leadership, which must take a strong role in making it happen and ensuring follow up.
- Marketing is Like Algebra - Keep this overarching theme in mind. Find a formula that works for each attorney, help them refine it when needed, and keep using it. One size does not fit all. Marketing should be tailored according to personality, needs of the firm and needs of the client. One tactic that works for one won’t necessarily work for another. Use tools that are simple, easy to implement, and produce measurable results.
- Ask - When was the last time you asked clients for new business? On the surface, that question may seem a bit silly. After all, asking for business once a company has signed on with your firm may feel a bit redundant. But consider this: Asking for more work on a semi-regular basis is a solid client retention tactic that could lead to bottom-line dividends.
Think business generation and value. If the new project involves work in a fledgling practice area your firm would like to promote, use warm relations with your client to persuade them to take a chance on your firm. Sweeten the deal and negotiate a lower fee for a set time period – perhaps three to six months – so the client can gain confidence in your firm’s ability to handle the project.
- Align – As indicated previously, a primary reason in-house counsel and executives terminate long-term relationships is lack of communication. Continually talk with your clients about their responsibilities to their own clients or customers. By addressing their vital business interests so directly, you align your interests with theirs.
- Build – To cultivate a mutually beneficial relationship, build that relationship. Honor the bromide: go where they go; read what they read; know who they know. In our business development seminars and workshops, we emphasize the importance of selling based on the client or prospect’s needs rather than the size of your firm, the number of offices you have, or the awards your firm has received.
- Deep down, clients want their supporters to grow and thrive, as the rewards of your success will eventually rebound to their benefit as well.
- Grow – Grow business development talent. At a recent business development forum, I was surprised by how many firms are still on hold. Investments in marketing and business development training have dropped significantly in the last two years, thereby reducing a real bottom-line oriented program.
It’s myopic, of course, since even minor investment now will yield significant new business three to five years down the line. Yet the hide-and-seek players are still on the sidelines exacerbating the challenges they will face in the growing competition ahead.
A surprising indication of the importance of business development training and support came from last year’s ALM Intelligence survey of laterals. Forty-eight percent of laterals moved to a new firm before becoming a partner. And one of the primary reasons stated was to gain business development training and support. So if you train them and keep them, you will also be keeping clients.
Post Mortem – Does your firm measure the success, failure and type of pitches made? Use the information gained after meetings/dinners/RFPs, pitches, etc., to conduct a substantive review of what works, what fails, what falls flat, what should have been said, what should not have been said. And inculcate this vital information into the attorney sales training programs you invest in.
- Join Up – The importance of actively participating in community, business and nonprofit organizations cannot be understated. Remember, “go where they go”? Encourage attorneys to contribute to the organization selected while getting to know the businesses of the members. Train them to look for opportunities to discuss client opportunities, their marketplace competition, government regulations, new products and services, etc. Utilize this participation to raise the firm’s profile in the broader marketplace. This is a great starting place for newer attorneys in confidence-building while identifying prospects for a future book of business.
- Learn – Build a competitive and economic research base upon which trends can be identified, targets can be set and pursuit activities conducted. University studies, think tanks, industry papers, economic reports are readily available. As you get the troops out of the foxholes and into the fray, prepare them with the information needed to demonstrate their knowledge and strategic presence for clients.
No Place to Hide
Your attitude toward and adoption of these sales principles can make the difference between entering 2013 discouraged about business development efforts and stressed about the future, or energized about potential new deals and optimistic about your firm’s growth. While every law firm can and should excel at business development and legal sales, only a few will actually exert and invest in the creativity, thought leadership and training to dynamically move their firms forward next year.
Some firms will continue to struggle as the economy reboots, while others will “own the closing zone.”
Which one will you be?
Allan Colman is CEO of the Closers Group, a business development consulting firm. Reach him at firstname.lastname@example.org.
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