He gave a room full of law firm marketing and business development professionals just 30 seconds to write down the names of five clients that their law firm does not have right now, but would like to have at the end of the year.
It proved to be a challenge – few could complete the task in the allotted time. Some wrote down brand names rather than the names of specific (and reachable) people. The exercise was a lead in for the presenter, Daryl Cross, to make the point — it’s knowing and building relationships with people that can provide answers to important questions such as:
- What are the most profitable matters?
- What categories of work does the firm want to do?
- What people does a law firm know in companies from which they’d like a referral (who knows who)?
The video nearby is an abbreviated version of a similar presentation, Mr. Cross made at the 2015 LMA Conference in San Diego a few weeks ago. The outcome of the exercise – in a standing-room only session – was quite similar.
His point boils down to the current approach – one often favors mass marketing over a narrow, well researched and targeted approach pivotal to a still largely relationship driven business.
Law firm marketers “throw open the window and point [attorneys] to the world and say go get ‘em.” Here are 20,000 contacts, or “the list of 600 people that came to our seminar or all the people,” or “all the people that have read our newsletter.”
Too many choices, or too many opportunities, is paralyzing according to Mr. Cross.
Focus a Law Firm on just 15 People
A better approach is to ask “fee earners” to focus on just 15 people (including maintaining solid law firm CRM notes). Fifteen people, he said, multiplied by all the billable staff in a law firm, add in automation and what a “wonderful database that would be” to earn more profitable work in a challenging environment.
That environment is underscored by the fact attorneys billing more hours, while rates are dropping – earning less per hour – and even collecting less when factoring in law firm realization rates according to Mr. Cross (i.e. invoice for $100 discount or write off to $90 = 90% realization).
It has a “spoiling” effect too, which in other words means, once a firm engages client work for $200 per hour, it’s very challenging to do work for someone else at $225. The answer, says Mr. Cross, is focus.
Mr. Cross breaks that focus on 15 people down into three groups:
- 5 existing clients
- 5 prospects “that look a lot like those clients”
- 5 referral sources (of which there three sub-groups)
- Non-lawyer deal makers: accountants, brokers, financiers, etc.
- Fellow lawyers: those attorneys that might refer business because of conflicts (Mr. Cross cautions, are they true partners or sending only “bread crumbs”)
- Colleagues: an old law school friend, a community acquaintance
What should law firms do with these lists? Strive to be a relationship broker.
For example, if “you have entrepreneurial clients and banks as clients, put them together” he said. “If they can do business together and a firm can broker that relationship, they will use you all the time.”
The entire video runs just 20 minutes and is well worth watching in its entirety.
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