If we say firms need to do something different, what does “different” mean? For as long as I’ve been in this industry, law firms have been struggling to improve their financial performance. For those of us who were in-house, we know that aggressive cost-cutting measures were generally the first steps that were taken to improve bottom-line performance metrics.
For those firms that weren’t serious about cost-cutting before 2008, they likely became converts shortly thereafter. It’s no secret that demand for legal services is flat, competition is stiff, and the ability to differentiate is still seemingly elusive. However, relatively recently, my colleagues and I began hearing a consistent message from law firm leadership. They told us that they need to “do something different” as they seek ways to survive and thrive in the ultra-competitive legal industry.
Expense management certainly continues today, but cost-cutting is only half of the equation. Growing top-line revenue to help the firm improve profitability and spur sustainable growth is the primary focus of many firms today. The sentiment about doing something different is growing louder with every passing “flat quarter,” and addressing this issue is quickly finding its way to the top of the priority list.
As firms turn their focus to revenue generation, some of the more progressive firms look to their clients to help them create their strategic priorities. In some cases, they even ask their clients to be involved in the planning process.
The Paths to Revenue Growth
Unfortunately, most firms follow the “path of least resistance” as they craft and execute their plans for revenue growth. The “traditional” approach has been to deploy some combination of the following: 1) lawyer business development coaching/training; 2) a client team/industry team program; and/or 3) a client feedback/client experience initiative. Few firms engage in all three of these activities, and a number of them only implement one or two, but the vast majority of the firms share with us that they do not achieve the results that they would like.
Perhaps an underlying reason that the results aren’t where they want them to be is that, although firm leadership is saying that they need to do something different, the reality is that the fundamentals remain steeped in tradition and firms continue the “path of least resistance” where clients are, at best, marginally involved in the process of change. We hear “trusted adviser” and “business partner” terminology being used more often these days, but it’s important to remember that these concepts are a two-way street.
What Clients Want
Clients want their business partners to make money. Clients want your firm to be successful. But, they also expect their business partners to, first-and-foremost, understand how to help them be successful; be profitable, avoid risk, optimize resources, etc. In order to do that, it’s imperative that you first understand what the client’s strategic objectives are, tactics deployed to achieve those objectives, what issues are likely to arise and how to prospectively identify and avoid them, etc.
Clients want you to have business discussions with them. Getting a handle on the aforementioned issues without having meaningful discussions with the client is nearly impossible, yet we continue to see it in common practice. In some cases, lawyers are uncomfortable approaching the client; in other cases, lawyers simply don’t see the importance of doing so. In nearly every case that I’m aware of, the clients are asking for this level of engagement.
For example, it is a rare exception that, as part of a Strategic Account Management/Client Team engagement, a general counsel refuses to accept an invitation by the team to join them in strategic discussions. From our client feedback interviews, it is consistent from company to company that clients want their advisers to have a deeper understanding of their business.
As mentioned earlier in this article, firm leadership is becoming focused on the “need to do something different.” “Different” is typically viewed as the action of creating industry teams, developing a Strategic Account Management program, developing a strategic plan, and so on and so forth.
While these are all, indeed, good investment areas, but “different” could, or perhaps should, quite simply mean the way that firms interact/interface with their clients.
As CMOs seek to determine whether they need to invest more in business development coaching, industry/client team, client feedback programs, etc., you may want to consider starting with your clients first.
Our Role As Marketers
When we advise our lawyers on where to invest their business development time, we typically recommend the 80/20 rule; 80% of your business should come from existing clients and the balance of the time should be focused on new client development. It’s important to have a business discussion with your clients at every opportunity. Ask them what their strategic objectives are and then listen to the answer. Ask clients to share their organization chart with you (I’m bewildered by the fact that this is still perceived by many lawyers to be an odd request). Ask clients what they think your strategic objectives should be. Then, use this information to shape your own strategic direction and the investments needed to execute. The priorities that result may not stray too far from the norm, but, based on what we’re seeing and hearing, the way that you arrive there will definitely be different than your competitors.
Is your firm guilty of following the “path of least resistance?” Are you focused on executing tactic-after-tactic without having first talked to your key clients, writing down measurable goals, and prioritizing them? If you are, you’re not alone. The path of least resistance is an easy choice. Involving your clients in your strategic direction as a business partner is a better one.
***** Bruce Alltop is a Principal at LawVision Group. Prior to joining LawVision in 2012, he spent 25 years in house as a sales and marketing professional. His experience includes nearly 10 years as an AmLaw 100 Chief Marketing Officer in Boston. Reach him at email@example.com.
The views expressed in the article are those of the authors and not necessarily the views of their clients or other attorneys in their firm.