Law Firms – “Go for Growth”
Right now most law firms will either be budget setting or have concluded the process. Pre-recession, the task was easy: Take a figure of around 10%, add additional turnover to the fee earners and partners (not always equally) and there you have it.
Of course, it is a very different story now.
It is likely that the majority of firms will be crossing their fingers and hoping that they can maintain last year’s turnover. Looking for any sort of growth will be incredibly hard.
But is this approach appropriate?
With inflation pulsing through the system and partner demands to be met, firms must look for growth and not just a meagre 1% or 2% but something more substantial.
For those firms that have a cadre of commercial or institutional clients they will be in a position to predictably plan, assuming, that is, they don’t lose their appointment. Outside of this book of work, it is, of course, much harder to predict where turnover is to be found but not impossible.
The forecast may well include ongoing cases, recent client wins that will bring fees to fruition and the expected passing birds but all of these carry with them an air of unpredictability.
Doing the work is incredibly important and there is no point putting targets in place that put an intolerable burden on some partners and fee earners; but, assuming that the work can be managed, there are a number of areas that firms need to focus on (with laser light precision) if they are going to grow each and every department in pursuit of more ambitious targets.
- All private clients should be viewed as lifetime clients. We all know how much we dislike changing banks and insurers and law firms should be no different in the way they view their clients. This might mean that firms become more discerning but lawyers need to move away from the mindset of assuming that once a file is closed that they no longer have any contact (or interest!) in that particular client. If you think through the number of service lines that one client could purchase over their lifetime then you get the picture.
- With commercial clients, you need to get closer to them and change your mindset from adopting the billable hour to a value based proposition. Authenticity, caring and making sure you are there for the client should be paramount. The client contact wants to feel that they are the most special client you act for, even if they don’t spend a lot with your firm.
- Whether it is the private or commercial client, you need to talk to them more regularly at no charge. Ask your firm to give you a code for client care and have a league table to see who records the most time in any given month. Reward excellence. Law firms have to break down the barrier that exists between them and their clients. At the moment too much of what is done is in response to client demands, rather than a result of something initiated by the lawyer. Some firms will already be wise to this and will have appointed a client care partner but not all firms are large enough to accommodate such a person. The mindset has to be inculcated from top to bottom. In speaking to clients regularly you will find that opportunities emerge that can be exploited across the firm. Everyone can benefit in time, not just the department that is currently retained.
- Assemble your teams every month – as a minimum – with the aim of identifying opportunities to cross-sell their services. The most powerful weapon is the lawyer to lawyer introduction to the client. Put some numbers around this i.e. each lawyer has to introduce 5 of their clients each month to five other lawyers in the firm and there needs to be a follow up process. Cross-selling will not work if it is process driven. It needs to be results focused.
- Make sure that lawyers stop talking about clients as if they were their best friends. Each and every client is a client of the firm. If you have allowed someone to get too close then you are abdicating your responsibility.
- Don’t expect everyone to enjoy business development. Be prepared to invest in some and allow others to do the work. Don’t get frustrated or lean on those who prefer to do the work, so long as they are profitable and don’t stand in the way of others.
- Target clients need to be considered much more carefully. You need to start setting some tight deadlines on when you expect to see new turnover emerge. Make sure that if you do set a short time-line (“We will obtain our first set of instructions in 6 months”) that you put in place dates and KPIs that are going to assist in the process. Most lawyers tend to fear the whole process of selling and hope that after having invited the client to the umpteenth seminar and speaking engagement that out of the ether will emerge a new set of instructions. They won’t. Lawyers need to be prepared to pick up a phone (never their favoured medium for contact) and arrange an appointment with a client. This aspect of the budget setting is key. You will already have a good inkling which firms near to you act for certain clients and even though you may have talked endlessly about the prospects and dismissed the likelihood of winning the client as next to zero that is no reason to give up. Persistence pays off in the end.
- If you have been used to spending 1%-2.5% on marketing then don’t be surprised with the results. You know that all expenses need to be kept trimmed to the minimum but marketing is one of those expenses that you cannot ignore. Spend more and you can expect greater growth.
- Start focusing on your service standards. As I have said before, marketing is to an extent a tax on business, particularly where you are using it to make up for poor service. If the service is WOW then clients will come to you on the recommendation of others. They won’t need to be sold on the service.
- Finally, you need to find a few edges. Not just the cheap option (that is such a soft and unsustainable option) but something that distinguishes you from the mediocre competition.
Growth is key but it won’t happen by itself.
You have to gather all your resources to make it happen. But more than the slightly mechanistic process adumbrated above, you need to spell out the big question for your staff and partners. They need to understand why growth is so important. Don’t just rely on the glib sayings related to wages and investment. No, you need to spell out where the firm is going, how it is going to get there and why everyone is so important to its destiny.
“Go for growth” should be your mantra. There is no shame in aiming high but make sure you carry everyone with you.
~ JS ~