Thursday, March 7, 2019

The Corporate Transactional Lawyer's Non-selling Sales Technique

ave you ever wondered why a company fails to engage a lawyer (any lawyer) to fix a problem for which they clearly need a solution? Or, why a company doesn’t follow through on an easy opportunity you’ve presented to them? Have you wondered why you win some engagements quickly while others take forever to get signed? Have you ever suspected that there are politics at work going on inside the company that is keeping you from getting the engagement?

If you’ve been active in business development in the corporate legal industry, you’ve had these questions and experiences.

Selling is hard. Brutally hard. Caring, nice, smart, experienced, business savvy lawyers who proactively reach out to well qualified prospects with proven solutions still fail to close new engagements nine times out of ten. The questions above point to the frustration of selling. But they also provide a clue to an overlooked part of the legal business development process, the legal services buying process.

Legal services buyers have their own unique internal dynamics that must be addressed before they are ready to begin the legal services buying process. In some cases, and with certain practice areas, the process that a company goes through to be ready to buy a solution to an issue, problem or opportunity (IPO) occurs quickly. But in numerous other situations and legal subject areas, the process occurs slowly, in fits and starts, or forces company decision makers through a great deal of internal wrangling and politicking.

Businesses make decisions to hire outside counsel in ways that are unique to each individual business. A company's decisions can change course, stop suddenly, speed up or switch to new partners without warning. We assume that companies who are seeking help with their legal problems are ready to engage the lawyer when they find one that suits their needs and can solve their problems. But for a lot of selling situations, that’s simply not the case. Buyers sometimes use these sales discussions to gather information, think through their own internal challenges and gauge risk and opportunity.

As outside counsel, we don’t have a clear view of this internal company decision-making process. But if we did, it would explain why some engagements are signed quickly while others drag on unsigned; why some work comes from people we hardly know; why you only get small scraps of work and not the big deals; why a company doesn’t respond to genuine offers of assistance or why companies don’t seem to understand what the company actually needs in terms of legal assistance. Most importantly, a view inside the company would expose the myriad of political calculations, business decisions, and historical learnings that shapes a company’s readiness to engage outside counsel.

Not all legal work comes with the same set of motivations and objectives. Some legal work is non-discretionary. That is, the company has few options but to engage outside counsel to assist with the matter. Examples of these situations include ‘bet-the-company’ litigation, corporate filings, regulatory work or investigations. The impetus for this work comes from forces bearing on the company which gives the company little choice in how it will proceed. And in these cases, it must typically act quickly.

On the other hand, some work is discretionary. Sometimes even optional. That is, the project must be prioritized and assigned resources in the context of the business’ other pressing needs and opportunities. Outside counsel’s ability to understand these internal priorities and strategies are limited and often distorted.

​Because of this, legal business development training does not address the earliest phase of the sale funnel, the phase which occurs inside the company before it has decided to engage outside counsel. Conventional training ignores the company’s buying decision process. In doing so, several important opportunities are missed and questions left unanswered which, not only makes us less effective, but inhibits our ability to learn and improve selling methods.


The complexity of decisions drives the speed in which a company can make a decision. Companies facing complex choices must decide on the strategic importance to the company of the problem or opportunity and tease out the breadth and complexity of the implications any potential solution will have on the company, its operations, customers, partners and resources. As an example, an offer to revise clauses in a technical contract may appear necessary, even simple. But the consequences (or unintended consequences) of revising those clauses can have far reaching affects on the company. Both the lawyer and company stakeholders must carefully consider those implications before they can engage someone to revise those clauses.  

When lawyers call on their business contacts, they don’t typically consider the internal dynamics and criteria that must align to be ready to find and vet solutions and providers. Without this internal alignment, even the most rational and simple decisions can languish in company politics, analysis or budgeting delays. The saying ‘paralysis by analysis’ speaks to this very problem as it describes the competing interests inside the company trying to negotiate consensus and direction.

One assumption of conventional business development training is that lawyers have little influence on the buying-decision process. Instead, they focus on the buying process itself, assume all legal needs require solutions and have buy in, and apply a selling framework without regard to where the company is in their internal negotiations about a solution. That’s a mistake. But take heart. It is a mistake made across numerous industries which sell their dynamic solutions into highly matrixed corporations.

Decisions whether or not to address an issue, fix a problem or seize an opportunity must be balanced against the available resources, the risks and priorities of the company. From the company’s perspective, those that see little risk in a situation or who find the implications of an issue narrow in scope may not be motivated to act. Conversely, problems which have strategic or existential importance for the company and narrow, well understood implications are more likely to be dealt with quickly. Issues or matters which are both strategically important and which have complex and wide-ranging implications for the company will require careful study and consideration. Conventional sales programs don’t start with this understanding and instead apply the same sales formula regardless of how the company may view the problem, issue or opportunity relative to its goals and strategies.

It may seem obvious that companies require each legal need to achieve an ROI or make a ‘business case’ in order to move forward on the project. It is not so obvious that lawyers can help in this process. But they can. And in doing so, they can significantly increase their closing ratios and reduce the number of other lawyers they compete with for that work.

A new selling method offers these and other benefits for professional selling situations and is especially relevant for corporate or transactional lawyers. Decision-Strategy Selling™ is a complement to selling skills training programs and helps attorneys better understand, facilitate and navigate the prospect’s engagement decision and selection process thereby improving the attorney’s selling process. It gives lawyers a framework to better adjust their sales pursuit strategies to accommodate the unique buying experience of their practice area and of their target company prospect. And it teaches lawyers how to stay 'tuned in' to the company's engagement decision process showing them how to shift roles from decision coaching, consultative selling or contractor negotiation roles to move engagements to signature. In most cases, Decision-Strategy Selling™ does not replace the need for consultative selling skills training. It guides lawyers in ow to refine their pursuits in real time to maximize their selling effectiveness and close engagements faster. However, the method is frequently effective in winning engagements without the need to advance to a consultative selling role because, in coaching company representatives through their internal decision process, they become trusted advisers with unequaled knowledge of the unique cultural hallmarks and operational needs of the company. In this sense, it is a form of selling that doesn’t require ‘selling’.

Lawyers who learn Decision-Strategy Selling™ techniques earn trusted adviser more quickly because they learn how to facilitate decisions and avoid using consultative persuasion techniques until it is appropriate. They learn decision coaching techniques that reveal more about the company’s operations, internal relationships and strategic priorities than lawyers who only use consultative selling skills or research tools. And they gain the insights required to formulate pitches that closely align with company needs and priorities, often times eliminating the company’s need for competitive bids. Most importantly, lawyers learn to avoid creating ‘sales pressure’ that leads to adversarial rather than authentic relationships.

Law firms are not known for their business development savviness, let alone their ability to innovate sales methods. But Decision-Strategy Selling™ provides a methodology that is a natural extension of a lawyer’s innate capabilities such as questioning and discovery skills. And creates a new awareness of the phases of selling and the best techniques to navigate the sales process.
Conventional selling skills training suggests building authentic relationships as a condition for sales opportunities. But the byproduct of ‘selling’ is sales pressure which is destructive to authentic and trusted relationships. Decision-Strategy Selling™ eliminates the sales pressure that forms in consultative selling situations because it focuses the lawyer on coaching skills, skills that enhance relationships rather than challenging the relationship.

Decision-Strategy Selling™ provides a simple methodology for quickly evaluating the complexity of a legal services selling situation and enables lawyers to fine tune their business development strategies. It explains the buying decision process and teaches lawyers new skills and questioning techniques that will enable them to move through the three main phases of a legal selling situation more effectively. Lastly, lawyers who use the method will gain greater confidence in business development abilities through a heightened awareness of company buying decision process and their role in sales conversations and the pitch process.

Wednesday, March 6, 2019

Cultural Fit is Leading Us Further From a Solution to The Lateral Hiring Problem.

A recent report by ALM Legal Intelligence provides some eye-popping statistics on the performance of lateral hires among the AmLaw 200. According to their latest research, lateral recruiting is a risky growth strategy. Laterals among the AmLaw 200 have as much as a 47% failure rate, are only 50% likely to stay five years and failed laterals cost the industry an estimated $2 billion a year! The report goes on to estimate that the average cost of acquiring a lateral partner in 2018 was $2.3 million, including one year of compensation, recruiter fees and other internal costs. Multi-year guarantees are even more expensive.

The research, based on interviews with law firm leaders, suggests that firms don’t do a good job of figuring out cultural fit. One law firm leader commented that “the group didn’t think about how these people would fit in,” As such, the report suggests that cultural fit needs to be amplified in the due diligence and integration processes.

Personality and culture are fuzzy concepts. What’s more likely is that the industry is struggling to identify the metrics which truly drive lateral success. It’s hard to imagine a lateral who brings the majority of their book of business to a new firm not fitting in. ‘Culture’ sound more like a explanation than a cause. With stakes so high, we need to understand the causes of failure and the drivers of success. A focus on ‘cultural fit’ as opposed to practice and client dynamics is leading us further from a solution to the lateral hiring challenge. Culture follows rainmaking. Not the other way around.

In my work with laterals, and as the creator and original co-author of the ALM Legal Intelligence Lateral Hiring Report in 2015, I’ve come to the conclusion that success is best predicted by the practice and client characteristics of the incoming lateral’s book of business. The industry needs a common set of metrics to evaluate the potential for client mobility. No due diligence process in any other industry would be considered complete without this analysis.

A whole new view of the viability of any candidate can be gained by examining the lateral’s client relationships; each client company’s likely risks and motivations for making a move; the cross-servicing depth and entrenchment characteristics; the economics and incentives available to encourage a move; the client company’s reliance on the lateral or other practice areas, among other criteria. The indicators of client mobility, while not yet scientific, do lend a degree of objectivity to the analysis. The above considerations are just a couple of the analysis points that need to be considered for a complete due diligence analysis. This type of analysis requires not only deeper, probing questions by the recruiter but an understanding of business fundamentals, business decision making processes and, to an extent, an investigative curiosity.

Further complicating our due diligence is the fact that what we look for in laterals is also, often times, the qualities that make it hardest for clients to switch firms. For instance, we look for laterals with a large book of originations. A large book is often the result of laterals who have cross sold numerous services into their client companies. That’s a good thing, right? Yes. It’s terrific for the firm who enjoys those deep ties throughout the firm. But not so good for a firm looking to buy those ties. Each additional practice area divides the chance that client company will follow the lateral. A single use practice is much more mobile than a practice which has tentacles into several different practice areas. This common-sense reality is rarely included in the analysis or due diligence process. But it is the reason that groups of laterals are more successfully lifted out than a sole lateral is from a firm. Shouldn’t these factors be included in the Lateral Partner Questionnaire and in candidate interviews?

Who conducts the due diligence interview can also a problem. We might like to think that Partners are the best practice and company diagnosticians but that’s simply not the case. In my years of coaching the most senior partners in the largest law firms in the world, I’ve found that lawyers often have a very difficult time seeing the structural challenges inherent in their practices. They have an even harder time identifying the best strategy to overcome those challenges. The value I bring is as an objective, informed outside observer who can provide the perspective that can help them cut to the strategic focus they need. Why would we think they could adopt the diagnostics necessary for a thorough lateral due diligence process of a potential partner? They don’t. And it is not practical to think they can. The potentiality of a partnership creates its own biases and blindness.

Many firms view the challenge of lateral recruiting as a challenge of finding a supply of qualified candidates. That’s only part of the problem and really a problem that should be dealt with only after a sound vetting strategy is already in place. Fewer candidates that actually work out and meet revenue expectations is a better course of action because it has the added benefit of improving client satisfaction, an enhancing the firm’s recruiting reputation and improving the firm’s investment ROI.
The due diligence process I have long championed requires a deep dive into the lateral’s client mix, relationships and practice synergies. These are objective criteria that can be easily evaluated through the candidate interviewing process. I leave the cultural evaluation to the partners since that is something difficult to see from the outside but is also a self-fulfilling prophesy that bears little on the lateral’s critically important early success in moving clients.

Laterals are counted on to solve all kinds of problems for law firms from entering a new market to boosting revenues to infilling expertise. It behooves us to find a better solution framework. Maybe a loss of $2 billion on revenues of $17 billion is an acceptable cost of doing business. But lateral failures have hidden costs that may be even more costly to firm morale and client satisfaction. It’s time the industry take a more thoughtful approach to lateral hiring and force a more detailed conversation inside the firm about the data points that can predict lateral success.