Home » Large Law » The 6 New Laws of Business Development for Firms [LMA Recap]

The 6 New Laws of Business Development for Firms [LMA Recap]

The 6 Laws of New Business Development for Firms

One data point in the presentation stemmed from a CounselLink ELM Trends report. The graphic shows high-fee M&A matters (>$1 million) where 52% of all outside counsel spending on these matters went to firms with 501-750 lawyers in the last 12 months. Notice the delta about 2011-2012 where corporate legal became more inclined to send high-value matters to firms other than the top 50.

For law firms, “the world of profitable opportunities is shrinking rapidly,” said Darryl Cross.

His perspective was part of a standing-room only presentation made at the 2015 LMA conference.  Mr. Cross walked through a series of slides with several data points including some drawn from the CounselLink Enterprise Legal Management Trends Report.

“Profitability is going backward,” he noted, suggesting that while there are a lot of large law firms, there are not a lot of profitable large law firms.  The competition is coming from all sides where for corporate counsel there are other firms that meet the “good enough and large enough” litmus test.

To that end, the rules of law firm business development may well have changed.  Mr. Cross offered six new rules in the first part of his session:

1. RFPs are asking for discounts.

From AFAs to free or steeply discounted discovery, the requirements asked for in requests for proposals (RFPs) have consistently gained prominence.

2. Stick with what a law firm does best.

Mr. Cross notes that every so often law firms will create “grand plans” that appear more “aspirational” than anything else.  For example targeting a new practice area where a firm has little experience.  “When in doubt, stick to what you know,” he advises.

3. Law firm competition is plentiful.

The “main competition is big enough, large enough and close enough,” he warned hinting at the GC’s inclination to test services with other firms other than the largest. “Demand for legal services and demand for law firms are not the same thing.”

———————————————
Also see these related posts:
LMA Session: Law Firm CRM as a Referral Engine
Business Development: Transforming Action into Real Results
A Law Firm CMO is the Voice of the Market
———————————————

4.  Realization is the law firm health metric.

Mr. Cross breaks the concept down simply:  if a firm bills $100 and the client pays $90, the realization rate is 90%.  There’s incredible pressure on realization rates and it currently serves as sound metric for the health of a law firm’s business development program.

5.  Technology enabled law firm.

Technology will enable a firm, allowing it to do more with less, or if it’s not adopted, will leave a law firm behind.  The reality is, technology allows smaller firms to be bigger and have wider, even global reach.

6. Lawyers manage individual relationships.

“It’s high time for individual lawyers to manage individual relationships.”  To illustrate he told a story where the business development staff was hand-signing client holiday cards for an attorney. The purpose of course, was to provide a personal touch.  The irony of his anecdote lingered in the conference room.

* * *

What rules would you add, edit or otherwise modify?

If you enjoyed this post, you might also like:
9 Creative CRM Tips for Getting Lawyers to Share Data

Facebook Twitter Pinterest Plusone Linkedin Digg Delicious Reddit Stumbleupon Tumblr Posterous Email Snailmail

About Frank Strong

Frank Strong
Frank Strong is the communications director for the LexisNexis software division located on NC State’s Centennial Campus in Raleigh. In this capacity, he leads communications efforts in support of software products for law practice and law department management and also litigation tools – across large law, small law and corporate counsel segments. With more than 15 years of experience in the high-tech sector, Strong previously served as director of public relations for Vocus, which developed marketing, PR and media monitoring software. He has held multiple roles both in-house with corporations, ranging from startups to global organizations, and has also endured the rigors of billable hours, having completed gigs at PR firms including the top 10 global firm Hill & Knowlton. A veteran of two year-long deployments, Strong has concurrently served in uniform in reserve components of the military for more than 20 years, initially as an enlisted Marine and later as an infantry officer in the Army National Guard. Strong holds a BA in Film and TV production from Worcester State University, an M.A. in Public Communication from American University, and an M.B.A. from Marymount University. He is a PADI-certified Master Scuba Diver and holds a USPA "B" skydiving license.
1 comments
LailaKeirstead
LailaKeirstead

I would like to think that tip two and three go together in a way. With there being so many law firms and lawyers, you are going to want to stick with what your law firm does the best. That will keep the competition on a more equal ground. There is so much competition anyway because there are so many lawyers that practice multiple aspects of law. I think you should just stick to what you do the best and you will be fine. http://cklaw.net/services/ 

Trackbacks

  1. […] For law firms, “the world of profitable opportunities is shrinking rapidly,” said Darryl Cross. …  […]