Chasing a Silver Bullet

We're all told: Rainmakers have 'it'. They have this special thing that enables them to land new clients like flying silver carp jumping into a boat. It makes you think there's a silver bullet out there.

There isn't.

It's not one thing that will make your business development efforts successful, it's a myriad of different skills and activities you must do every day. And that combination is different for every rainmaker. The unique combination of these skills, the ones that you are most comfortable doing, and the ones you perform consistently over time, is what gives you your business development mojo.

That having been said, there are some fundamentals you must master. You'll read a lot about these fundamentals in this blog. But your real business development 'groove' comes from finding that unique set of comfortable activities that you will enjoy doing every day. And then, doing it.

It goes without saying, if you'd like to improve your groove, give me a call me at 502-693-4731. It costs nothing to talk.

How Do I Get Better Leads?

The answer is simple. You don't go out and get better leads. Better leads come to you because you offer a valuable solution to a prospect's problem. Allow me to explain but first, let's clarify the hierarchy of lead quality.

• The highest quality lead is an unsolicited referral. This is where the prospect calls you directly and wants you as their lawyer.
• The second highest quality lead is a proactive referral. This is where one of your existing clients gives you the name of a prospective client because he thinks you can fix their problem.
• The third highest quality lead is a reactive referral from a client. This is where you ask your clients for referrals to prospective clients who would benefit from your counsel.

So, the challenge is in how to attract unsolicited referrals. The secret is to be the perceived leader in a subject matter. But how do you achieve that distinction? The answer is that you must discipline yourself to narrow and focus on one aspect of your practice.

Here are three simple steps to demonstrate the power of narrow focus:

1. Narrow the subject of your specialized knowledge. The more narrowly defined your area of expertise, the easier it is to get known as an expert in it. Consider this example. There are a lot of ear, nose and throat specialists in the country. So narrow your expertise further. Focus on being a throat specialist. If there are a lot of throat specialists, focus on being a swallowing expert. If there are too many swallowing experts, consider focusing on being an infant swallowing expert. See how that works? As you focus and refine, the ways in which people know how to use your services becomes more and more clear. And, the types of marketing activities and who your prospective client will be also becomes more clear in the process.

2. Narrow the definition of the buyer of your services. Let's play the same game with step two. You could define your clients as being anyone who has ear, nose or throat problems. Or, you can define them as being anyone with swallowing challenges. But to really get specific, define your targets as only the parents of infants with swallowing issues. This narrowing of your audience gives you a clearer understanding of your best and most profitable clients. It also has the added benefit of leverage. If you are an expert in infant swallowing problems, surely you will be able to handle any adult swallowing challenges as well.

3. Focus on one specific and simple message. In marketing, simple gets noticed. Compelling gets remembered. Craft your message so that it is both simple (concise) and compelling. Compelling means that the audience knows clearly the value you bring and the problem you can solve. Don't talk about yourself, talk about the client and how they will benefit from your service. That's what will resonate and be remembered. To do this, think about what benefit you truly provide. If you are an infant swallowing expert, you provide the benefit of 'no more stress at feeding time'. See how easy that is? You just wrote your tagline and your practice mission statement in one simple step. And, I assure you, it will be much more memorable than 'helping infants swallow since 1979'.

It goes without saying. If I can be of assistance in increasing your unsolicited referrals, please don't hesitate to call me at 502-693-4731.

Why Cross Selling Fails

Cross-selling clients is one of the most talked about yet least understood activities in law firms today. While just about everyone agrees on the benefits (and that it must be done), few understand deeply the myriad of reasons why it so often fails. In fact, it’s odd that the phrase ‘Cross-selling’ has caught on so well in law firms. “Selling” is what used car salesmen do. But what is really happening when the cross selling process works effectively is ‘consultative cross marketing’, meaning the attorney is not selling another attorney’s services; he is working together with the client to develop the best solution to the client’s problems. And, sometimes those solutions will not be among the mix of practices in the attorney’s firm.

Back to the point, why does cross-selling so often fail to live up to its promise? Most formal cross selling programs start with flawed assumptions and suffer from a cultural misalignment between rewards and risks, an economic challenge found in the firm’s compensation and incentives program and business development training programs which are light on the unique challenges of cross marketing in professional service firms.

1.           The process typically starts with flawed assumptions.

a.           Clients are willing to lock in to a single provider for multiple solutions. However, clients often see a great benefit in maintaining flexibility and scalability.

b.           Clients will benefit financially from aggregating legal services. However, the reward is typically too small to warrant the disruption of existing relationships and the added hard and soft switching costs.

c.           Clients evaluate quality in the same way that attorneys evaluate quality. Attorneys tend to evaluate quality in technical terms including legal strategies, work product quality, educational background and case or matter experience. However, many of the recipients of a proposal are non-lawyer business executives who use a different set of criteria in their evaluation. These often include an economic analysis such as a return on investment calculation, the intuitive trust and personal appeal of the attorney, the value added services offered, the speed of proposed resolution of the issue, and other criteria.

d.           The relationship attorney and their partner equally trust one another. Trust is the most critical element of any relationship. While building trust with a new client is recognized part of the process in new client engagements, it is not so well recognized need in internal cross marketing initiatives. You must trust your partner before your client will trust him. Adequate time and attention needs to be paid to building trust among the partners.

 

2.           Neither risks nor rewards are compelling enough motivators.

a.           The reward of selling another attorney’s services is less than the risk of disrupting an otherwise good, productive relationship. (What if they screw up?)

b.           The risk of losing a client relationship is not worth the reward of cross selling. (What if they like her better than me?)

 

3.           Compensation and incentive systems are misdirected or underdeveloped.

a.           Compensation systems fail to create a large enough individual incentive to overcome risk aversion.

b.           Compensation systems and incentives often fail to directly link cross-selling performance to individual attorney compensation. Even where this path exists, it can be quite murky.

c.           Compensation and incentive programs often fail to incent group activity. Even though doing so can focus peer pressure on breaking down the barriers to cross-selling.

d.           Compensation and incentives that do reward cross-selling typically reward the short-sighted goal of landing new work versus the long term benefits to the firm of the lifetime value of a more entrenched client. Continuing to expand work in the existing practice area is just as important, if not more so, than adding additional practice areas to the client relationship.

e.           Quotas and billing requirements often force attorneys to focus first on growing their own book of business over expanding their partner’s book of business. The subtle choices the attorney makes as a result can grow into unrelenting barriers to cross selling success.

 

4.           Consultative cross-selling skills are underdeveloped in law firms.

a.           Cross-selling requires a different process and a slightly different set of skills than landing a new client- the focus of most attorney business development training programs. Most attorneys have not been properly trained in ‘consultative cross marketing’ techniques within the firm.

b.           Ineffective or incomplete pre-qualifying analysis. Too often, attorneys rely on their partner’s knowledge of the client to be briefed on the client’s business. This is often insufficient and should be only a part of the preparation prior to meeting with a client.

c.           Hording key information and intelligence about the client or misinterpreting its importance. It is not unusual for the relationship attorney to hold back on key client information under the guise of confidentiality, reluctance to share unpleasant experiences or even passive aggressiveness toward cross selling the client.

d.           Inability to clarify and communicate the value of another attorney’s experience and capabilities. Attorneys often have difficulty articulating their own value to a client. Articulating the value of a partner is even more difficult.

e.           Selling the practice instead of the solution. This is a common mistake in many professional service firms. Clients do not buy the practice, they purchasing the benefits of your practice which is the value of the solutions you offer. Attorneys who understand how to articulate the ways in which the business will benefit from the attorney’s experience, win a greater share of their proposals.

Cross-selling is an incredibly effective way to improve the profits of law firms and lock in long term client loyalty. However, it is equally difficult to implement in most partnership-structured organizations. The good news is that there are relatively simple ways to lay the foundation which can ensure improved cross-selling activity in the firm.

Are you interested in improving your cross selling program? It costs nothing to talk. Call me at 502.693.4731

Why Law Schools Should Train Business Developers

I found this blog post from my friend at the International Business Development blog and thought it was particularly good. I'd love to hear your comments.

Why Law Schools Should Train Business Developers.

The ROI of Price Stability

How much can your firm benefit from training on reducing price concessions? Law firms can easily gain an annual 1% improvement in revenues and, likely, much more by effectively handling price objections.

Using the following assumptions, replace the numbers provided with figures pulled from your firm’s billing data. The percentages are conservative and will often be higher. Regardless, once attorneys master the skills to resist pricing concessions, the percentages should double or even triple.

A rough ‘napkin’ calculation shows the benefit of managing discounts:

Firm annual revenues at full rack (standard) rate: $52,000,000

Percentage of firm revenues subject to discount agreements: 23.0

Actual revenues subject to discount agreement: $11,960,000

Average rate of discount percentage: 12.5%

Average lost revenues resulting from discounts: $2,750,800

First year recapture rate resulting from improved sales: +20%

Estimated recaptured revenues: $550,160

Discounts and price concessions are not a cost of doing business. They are a cost of not doing business well. A discount is often a reflection of the firm’s inability to convince clients of the value that the attorney or firm brings to the company. Firms who learn effective ways to justify the fees they charge by demonstrating the value they bring to their clients will enjoy higher profit margins than those who simply succumb to discount requests.