Law firms are losing two out of every three new business opportunity they are presented with. This represents a loss of $637 million in potential profits, according to BTI’s 2015 Market Outlook and Client Service Review. Toni Minick, director of product management for the LexisNexis® InterAction® team, reviewed some of these findings during a recent webinar titled: Revenue Generating Relationships.
The same study reports that corporate clients in the global market are poised to spend $1 billion dollars on legal services in the coming year. The study also revealed corporate counsel are more likely to use a law firm if they know more than two or three partners at the firm, regardless of their skill-set.
Relationships Matter More than Ever
Time and again, corporate counsel has said relationships matter. In spite of this, only a small fraction of corporate clients would recommend their primary law firm to a colleague:
“Only 33 percent of corporate clients would recommend their primary law firm to a prospect and that number is only going down. This shows there’s some customer service work that needs to be done.”
According to data from the BTI study, which Ms. Minick said is consistent with data pulled from the LexisNexis Counsellink ELM Trends Report; corporate clients are shrinking their panel of law firms to the tune of 36 law firms. This is down from 47 in 2014. In other words, said Ms. Minick, somebody is winning business and somebody is losing business:
“You want to be one of those 36 winning firms.”
Also, according to the BTI study, the AmLaw 10 is getting bigger, while smaller firms in the AmLaw 100 are challenged to keep up. These larger firms are likely winning revenue away from the competition, said Ms. Minick, because they are approaching new business in a more strategic and methodical way:
“The AmLaw 10 owns 26 percent of the AmLaw 100 revenue and that number continues to grow year after year. What we’re finding out after speaking with our customers is some attorneys are approaching new business in a scatter box way or going after the big shiny object, whereas the top 10 firms are doing something differently. They are measuring their success and if something isn’t working they are changing it.”
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What gets Measured, gets Improved
According to Ms. Minick what some of these larger firms are doing differently is approaching smaller pockets of business and putting data and analytics around those more tangible pieces.
“The good news is larger firms aren’t doing this holistically throughout their firms, they are starting smaller,” she said.
In other words, they are taking data they already have available to them and seeing what patterns emerge with respect to the business. She made the important distinction explaining that it is not about using big data. While big data can inform the process, she said what they’re finding is smaller pieces of data can be very useful in helping to shed light on particular business patterns.
This intelligence can be used to inform a firm’s new business strategy. She recommends law firms first find their place on the maturity model, which is essentially a spectrum that indicates how mature a law firm is with their use of technology and data. While there’s no right or wrong place to be on the maturity model, the closer a law firm is to using analytics to predict business patterns, uncover relationships and gain foresight into the business, the more successful the firm will likely be.
She likened the process to what some e-commerce companies are beginning to do with their customers, which is send them products they need based on their buying patterns, even before they’ve placed their orders.
Start Small to Move Forward
When approaching data, Ms. Minick recommends first starting off with an end goal in sight and using small, consumable pieces of data to see where patterns emerge around that goal. If something isn’t working, she recommends experimenting with the data until something useful comes to light. After all, when there’s a billion of dollars at stake.
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