Law Practice Management Asked and Answered Blog

Category: law firm client development

Dec 13, 2011

Why Lawyers Have Problems With Client Development and Marketing

Question:

Our firm has in place a strategic plan as well as a firm client development plan and individual lawyer client development plans as well. While we have great ideas and good intentions – we seem to be falling short of the mark and not accomplishing much. What are you thoughts regarding our dismal success with our client development efforts?

Response:

Obstacles to Marketing

Based upon our observations drawn from working with client law firms over the past eighteen years we have concluded that marketing is poorly understood and ineffectively implemented in many small law firms. In addition, the following obstacles are at play:

Time

There is no time for marketing or any firm developmental activities. Production is king and non-billable activities such as marketing are discouraged.

Uneasiness With Marketing

Attorneys are uncomfortable with marketing. This is primarily due to lack of understanding, training, and experience with the process.

Lack of Marketing Understanding

Many attorneys confuse marketing with advertising. Marketing is not advertising. Marketing activities can exist without any promotional components such as television advertisements, radio spots, tombstone magazine advertisements, or direct mail. Marketing is the broader process concerned with the development and delivery of legal services and is part of the firm's long range planning process. It provides answers to the questions what are we selling and to whom are we selling. It involves maintaining relationships with existing clients as well as creating new relationships with prospective clients. In fact, a major objective of many successful marketing plans is obtain additional business from existing clients.

Focus and Accountability Problems

Frequently law firms experiment with marketing and engage in isolated promotional activities not integrated with the firm's business plan with the expectation of immediate results after the one-shot activity. The firm engages in fits-and-start activities that are completely unfocused, unrelated to an overall plan, unmeasured, inconsistent and often inappropriate.

Cultural Issues

The typical culture of many law firms discourages investment in long-term developmental activities. The focus is on billable hours and production. Everything else is of secondary concern. The consensus governance model typical in law firms hinders change and timely decision-making at the firm level. In addition, effective marketing in law firms requires marketing at the firm, practice group, and individual attorney levels. This requires effective training, mentoring, follow-up, and accountability at each of these levels.

Reward and Compensation Systems

Most reward and compensation systems focus on short-term production and discourage participation in longer term (non-billable) firm investment activities or projects.

Tackle some of the above issues and you will be on your way to improving your client development and marketing efforts.

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John W. Olmstead, MBA, Ph.D, CMC

Aug 23, 2011

Law Firm Client Development – Obtaining Additional Work From Existing Clients

Question:

I am the chair of our three person management committee. Our firm, now entering second generation, is a 17 attorney firm in Kansas City, Missouri. We represent businesses and other institutional clients. We have several of our founding partners in their 70s and as they phase back and slow down we are discovering that the younger generation of partners have not developed client development skills. What should we be doing to get more business? We are not sure we even know how?

Response:

Research conducted over the years by numerous research organizations has shown that on average it costs five times as much (dollars/time investment) to get new clients than it does to get more business from existing clients. It just makes good business sense to leverage existing relationships.

Institutional clients are reducing the number of law firms that they use. According to BTI Consulting Group, corporations in the Fortune 1000 list are using 20% fewer core law firms than they did a year earlier. As a result fewer firms will be getting work from these companies and they will likely be the firms that successfully cross-sell their practices.

Recommendation From a Fortune 500 Client

Recently I was doing a telephone interview with the general counsel of a Fortune 500 company for our law firm client and I asked him if there was an opportunity for the law firm to get additional work in a practice area in which the company had no experience with the law firm previously and if an opportunity existed what the firm needed to do to earn the business. Here is his response.

"Obviously we currently have other law firms handling that work. However, we have been evaluating those relationships and may be making some changes. There is room for other law firms to earn our business in the practice areas that you have discussed with me."

"I am aware that the law firm does other work other than what we have been using them for – but I am not sure exactly what those areas are."

"In order to begin to forge a relationship into these other service areas:"

I need to know specifically what they do.
I need to know who does it.
I need to know how well the person( s) do it.
I need to have a well established relationship with the person – trust, respect, like the individual, etc.
I suggest that we start by having the partner in the firm that I have a relationship with begin educating me on the firm's other practice areas and begin introducing me to the other players in the law firm.

We hire lawyers – not law firms.

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