Legal Business Development

How to improve relationships with large clients, Part 2 of 2

Last week’s post described Harris E. Berenson’s ideas on how to develop a new relationship.  After you get in the door, the focus should shift to maximizing and maintaining the relationship with open communication, realistic expectations, and a willingness to learn from each other.

Communication includes understanding the client’s business and their clients.  How are you supposed to do that?  It’s easy, just ask the right questions and work on your listening skills.

Communication is also based on transparency and keeping your clients fully informed.  Clients hate surprises, whether the surprise is in a bill or in the outcome of a particular matter.  If you are open and honest, and let clients know what is coming, they will respect your approach, even in cases where they might have preferred a different result.

Communication also implies that sometimes “you just need to reach out and touch someone and ask ‘How’s business?’”  Berenson recommends sticking to short meetings, phone calls, and emails.  Other clients may prefer to do this over lunch or dinner.  Each person is different, and part of a successful relationship involves learning personal preferences, and even quirks, to make each relationship work more smoothly.  You must understand the level of detail each in-house client prefers, whether it should come by fax, email or phone, and who should get copies.

Every matter should end with a post-mortem, to assess what both sides have learned, and discuss what could be done better the next time to increase mutual satisfaction.

This sounds like hard work, and it is.  But there is a huge reward for getting through the process:  security.  Once a relationship is working, Berenson is highly motivated to keep sending more work.  Switching to another firm simply takes too much time and effort, “like training a puppy which piece of furniture he can and cannot get on.” 

Berenson also noted that lawyers should aim to be perceived as “counselors”, by applying best practices in client service such as:

• being accessible
• responding promptly
• learning the client’s business
• empowering your clients
• communicating clearly and directly
• getting to know clients
• putting clients first
• reducing law firm costs

Ah yes, cost.   Given that Berenson gave his talk at the annual Raindance Conference of the Legal Sales and Service Organization, he focused on sales and service.  But money did creep into the talk more than once, and he did note that business relationships are ultimately “all about the dollars and cents.”

In that Altman Weil survey I mentioned at the beginning of Part 1, chief legal officers at large companies were asked to “Rank the importance of efforts that outside counsel may make to improve the working relationship with your law department.”  Here are their top six factors, in order of importance:

1. Discounted fees
2. Improved responsiveness
3. Improved project staffing
4. Learning our business
5. Billing clarity and predictability
6. Alternative fees

Note that numbers 1, 5, and 6 involve money, and number 3 may too.  These same chief legal officers were also asked:  “For the next three to five years, what is your greatest long-term (over the horizon) concern?”  The number one answer was cost control (28%), and number two was the closely related answer limited resources (14%).

Similarly, when Inside Counsel magazine asked general counsel to identify the most important thing law firms could do to improve relationships, the number one answer (46%) was “reducing costs.” 

Times are tough, and getting tougher.  As Harris E. Berenson put it:  “There are many hungry lawyers out there, trying to take your business.”  On the plus side, their job of getting in is much much harder than your job of staying in.  As long as you remember to maximize and maintain the relationship. 

How to improve relationships with large clients, Part 1 of 2

Given the way the economy is going, this is a great time to improve client relationships.

When Altman Weil surveyed 126 chief legal officers at large companies a few months ago, 48% said that they had fired at least one of their law firms in the last year, or are considering firing them.  They also said that budgets are getting tighter:  26% plan to decrease their use of outside counsel in the coming year.

Many lawyers understand how important this is, but don’t know where to begin.  Harris E. Berenson, Senior Corporate Counsel at Liberty Mutual Insurance Company (and AVP/Chief Counsel of Liberty Mutual Property) recently provided some advice in a talk entitled “Developing, Maximizing and Maintaining the Inside/Outside Counsel Partnership” at the Legal Sales and Service Organization’s Raindance Conference.  (If you'd like to listen to a recording of the speech, click here.) According to Berenson, the most important word in the title of his presentation was partnership.  “At its core, a partnership is nothing more than a relationship.... The concept is simple, but the implementation can be very difficult.” 

He noted that “relationships are built on trust, support, consideration, respect, caring, and mutual responsibility.”  But he also left no doubt about who has the power in this particular relationship:  “Inside counsel can replace you much more easily than you can replace them.”

When he spoke about developing relationships, Berenson described the process of ultimately selecting outside firms (after the research and formal interviewing has been completed) as “simple, arbitrary, and subjective,” and compared it to speed dating.

I’ve written before about how lawyers like to talk too much at “pitch meetings” when they should be listening and “catching instead of pitching.”  Berenson supports this view, and notes that when he brings in law firms for interviews, “the worst thing they can do is to talk about past accomplishments... I already know about that. I want you to interview me.”  If lawyers were not experts on the substance of the law, or lacked adequate experience, they never would have been invited to the meeting in the first place.

The meeting should be a dialog, to help both sides understand what is required for a healthy relationship.  Law firms should be asking about the things they need from the potential client/corporation to assure success, such as access to key inside counsel and reasonable turnaround time.

In turn, Berenson will then ask about things like how the law firm plans to deal with conflicts, and how they will staff each matter.  If you want to compile a cheat sheet of correct answers for an interview like this, Berenson did provide one clue.  If he asks “How do you train your lawyers?” the correct answer is:  “We train them at our own expense.  You won’t see a lawyer’s name on a bill until they are ready to help.”  Liberty Mutual is probably not the only client who has thought: “I don’t want to be paying for $160,000 associates who are just starting out.”

For those who get past the first hurdle and succeed in developing a new relationship, next week’s post will talk about how to maximize and maintain the partnership.

Train the Trainer webinar in September

A few months ago, I announced that we were offering the first public Train the Trainer Workshop in the legal marketing profession, to help experienced professionals coach lawyers more efficiently.  But I just realized I've been so busy that I never told you how it turned out.  Very well, thanks. 

The June 5 session was attended by senior business development managers from five large firms with a total of over 6,000 lawyers, and some of them are now planning to send their staff to future sessions and to our coaching certification program. 

So now we've scheduled a Train the Trainer Webinar Workshop on Monday Sept 15 and Wednesday Sept 17, 1-4:15 PM, Eastern time.  To maximize discussion and interaction, this webinar will be limited to four participants. For details, Download TrainTrainerWorkshopAnnounce2008j.pdf.

What are the top marketing priorities in a down economy? Part 4

Last week, I reproduced an article by Mark Usellis, CMO at Davis Wright, about how to get more marketing results in a down economy, even when budgets are flat. His answer was built around zero-based budgeting, which Wikipedia describes as “a technique... which reverses the working process of traditional budgeting” by ignoring last year’s spending completely, and justifying every proposed expense for next year strictly on its merits.

When I called Mark to dig into the details of how he accomplishes this, he stressed that “you have to start with a philosophy” and “be clear on what you are trying to accomplish.” If you can “tell a coherent story about what you want to do,” the people around you will understand why some expenses will be approved, and others will not.

In Mark’s case, “I wanted to reallocate our spending portfolio to do less on general visibility and more on relationship development, less on client acquisition and more on loyalty, and less on ‘a rising tide floats all boats’ and more on focusing on the firm’s core strengths.”

When Mark explained this to me, he diplomatically noted that “every firm is different in its goals and philosophy” and stressed that these were just his goals. In my less humble opinion, if you disagree with Mark’s goals, you are probably wrong. For most law firms, the best way to maximize new business while minimizing marketing cost is indeed to focus on relationships, loyalty, core strengths, and providing value.

By squeezing the budgets for sponsorships, directories, and public relations, Mark was able to free up money for a few very targeted business development initiatives, including DWT Pacific, a collaboration with Australian firm PLN Lawyers Sydney to provide legal and business services in the South Pacific (including Hawaii, Guam, Okinawa, the Philippines, Malaysia, New Zealand, and Australia). This joint initiative builds on the traditional strengths of the two firms, and on the contacts and skills of several lawyers who had set up the program, along with new lateral David Cohen who joined DWT early this year “after serving 5 1/2 years as the Deputy Assistant Secretary of the Interior for Insular Affairs and two years as the U.S. Representative to the Pacific Community.”

In this context, the most important fact about the DWT Pacific initiative is that it did not require an increase in the marketing budget. All of the money that was needed to start up and maintain this program came from cutting other marketing expenses which were less targeted, and less clearly related to new business. Or, as Mark put it, “We set aside money for ‘move the needle initiatives’ rather than just feeding the boiler.”

So even in a down economy law firms can spend more on the things that matter, simply by cutting back on the things that don’t. The down economy is a dark cloud over all of us these days, but it could have a silver lining, if it forces law firms to spend their marketing budgets more wisely.

What are the top marketing priorities in a down economy? Part 3 by Mark Usellis

I wrote Part 1 and Part 2 of this series a few months ago. Today’s Part 3 is a guest post by Mark Usellis, Director of Marketing & Business Development at Davis Wright. This post reproduces a piece Mark published in the Legal Marketing Association magazine, Strategies (June 2008, p. 24). When I saw it, I thought: Everyone should read this, whether they belong to LMA or not. So I called Mark and got his permission. While we were on the phone, we also talked about his specific tactics, which I will describe in next week’s post.

Figuring out new ways to deliver value to clients is exactly what the marketing department should do. That’s true not only when the economy is soft, though it is certainly more of a priority when times are tough.

Besides clients, another important audience for your marketing department in tough times is your managing partner and CFO. Believe me, they will be delighted if, rather than proposing a higher budget for 2009 filled with all sorts of new initiatives, you propose a flat or even smaller budget but still deliver great value. In the process, you can weed out a number of low-value sacred cows that have burrowed into your budget over the years and refocus your department on things that enable your lawyers to add value for clients. You will probably improve your staff’s job satisfaction as well.

The tool for this is zero-based budgeting, which simply means that instead of using last year’s budget as a starting point, you start with a blank piece of paper. Everything has to earn its way into the budget on its own merits after a fresh analysis of costs and benefits.

If you enlist the CFO and managing partner up front and explain how this process will add value for the firm, you will likely be able to enlist them to help you fight the political battles that always accompany change.

Zero-based budgeting is a great way to wring out of the budget all kinds of random, scattershot, one-off activities that provide nothing more than a little general visibility to a poorly targeted audience and enable some lawyers to feel like they have “done their marketing,” despite not having actually talked to a client, prospect or referral source. In my first year at Davis Wright, we cut the general sponsorship budget by one-third, reduced our spending on directories and eliminated most of the advertising budget. That freed up funds to support three very substantial and targeted business development initiatives, to pay for a comprehensive positioning program and new Web site and to hire some senior staff in critical positions—all within a flat budget.

So as you approach the 2009 budget cycle, take nothing for granted. Start from zero and build a budget based on particular needs and opportunities, not on history. You will likely deliver a lot more value in 2009 while spending less. That is a result that works well in any economic environment.

Reproduced from Strategies - The Journal of Legal Marketing with permission from the Legal Marketing Association.

How to improve legal business development coaching

If you coach lawyers on business development, you probably think you could do better.  Everyone can.  But how?  Exactly what should you do to increase results?

In other professions, trainers and coaches answer that question through train the trainer workshops and certification programs.  Now legal marketers can too.

LegalBizDev has just introduced two new programs built around ten key proficiency factors that increase coaching results.  The most critical factor is time efficiency.

Above everything else, lawyers are busy. If a lawyer bills $600 per hour, one minute spent chatting costs $10.   So legal coaches must take time very seriously.  When people sign up for our Certification Program, Download CertificationOverview2008k.pdf, one of the first things we do is to send each person a digital timer to help make sure that 30 minute calls do not take 31 minutes (unless the client wants them to).

Whenever I speak to lawyers, I hold up my own digital timer at the beginning of the talk.  I always tell the audience that I can’t guarantee that they will like my presentation, but I can guarantee that I will end on time.  And when I do, I point to my timer.

Similarly, we believe that coaches should make a show about their devotion to time.  If they schedule a telecon for 10:00, they should call at 10:00, not 10:01 or 9:59.  And if the call is scheduled to end at 10:30, the first question they should ask is:  “Do you still have 30 minutes for today’s call, or should we go faster today?”  Lawyers love it.

I wish I could say they love all ten factors, but lawyers are not always thrilled when we urge them to prioritize relentlessly.  Sometimes a lawyer wants to start a blog or look up old colleagues with LinkedIn when they would be much better off spending that time taking top clients to lunch, to strengthen relationships and learn how to increase the clients’ perception of value. 

Don’t get me wrong.  I believe that both blogs and LinkedIn are valuable marketing tools.  I use them myself.  But I spend more than half of my work life developing new business, while many lawyers are lucky to spend an hour or two a week.  So the question for each lawyer is:  what tactics are most likely to produce the largest results in the time you have?  Sometimes, you have to ignore ideas that are only good so you’ll have enough time to focus on the best ideas for your practice, your personality, and your schedule.

What should a coach do if he makes his case against the blog, and the lawyer still wants to do it?  Give in.  Then monitor the results.  At the end of the day, coaches must defer to the lawyer’s judgment and avoid an argument. But we wouldn’t be doing our job if we failed to urge each lawyer to prioritize.

I started by mentioning ten key proficiency factors, but so far I’ve only talked about time efficiency and prioritization.  It would be natural to ask what the other eight are.  I hate to be coy here, but I’m not saying.

I don’t want to give the impression that the eight remaining factors will amaze you with secret magic formulas.  But they do represent the result of our proprietary analyses, and the hard earned wisdom from over 20 years of experience with a variety of professions.  So if you want to make your own judgment about the other eight factors, you’ll just have to sign up for our Train the Trainer workshop or the Certification Program. 

One way to win friends and influence people: Don’t argue

I’m sure you’ve heard of the book How to Win Friends and Influence People.  It was published in 1937 by Dale Carnegie, has sold over 15 million copies, been translated into 16 languages, and is still on Business Week’s latest list of best sellers (7/14/08, p. 99).

But have you ever read it?

Until a few years ago my answer was no, because I always thought the title sounded silly and manipulative.  Then I opened the book and became its biggest fan.  In fact, I have learned more about everyday human behavior from this book than from all the books I read to get my Ph.D. in psychology from Harvard.  It’s now near the top of my list of the top business development books for lawyers.  

One senior lawyer who read the book on my recommendation told me that this book “changed my life.”  All right, he was pulling my chain, but just a little.  I know because he recommended the book to several of his partners.  And one of them found it so valuable that he kept it in his bedside table for night time reading.

When legal marketers sign up for our Certified Coach Program, each gets a copy of Carnegie’s book.  (They also get two others:  Neil Rackham’s SPIN Selling Fieldbook, and my book AdverSelling.) 

Some of the most valuable advice for lawyers is found in Carnegie’s chapter on “A Sure Way of Making Enemies,” starting with the story of an attorney who argued the case of Lustgarten v. Fleet Corporation before the US Supreme Court.  When one of the justices said “The statue of limitations in admiralty law is six years, is it not?” the attorney replied, “Your Honor, there is no statute of limitations in admiralty.”

“A hush fell on the court and the temperature in the room seemed to drop to zero,” the lawyer later reported (p. 126). “I spoke better than I ever spoke before. But I didn’t persuade.  I made the enormous blunder of telling a very learned and famous man that he was wrong.”  The lawyer may have won the argument, but he lost the case. 

Of course, in many situations it is a lawyer’s job to argue.  But when the time comes to win friends, influence people, and develop new business, “You can’t win an argument... If you lose it, you lose it; and if you win it; you lose it.  Why?  You will have made [the other person] feel inferior…he will resent your triumph” (page 117).

Or, as Ben Franklin put it: “If you argue and rankle and contradict, you will achieve a victory sometimes; but it will be an empty victory because you will never get your opponent’s good will” (page 118).

When my colleague and friend Joyce shopped for new kitchen cabinets, she found the lowest price at a lumber store about a mile from her dream house.  But the designer in that store argued with her about having two separate sinks in her kitchen, and told her that the shaker-style cabinets she wanted had become a cliché.  Now Joyce may be even cheaper than I am, and she tried to convince herself to ignore the argumentative sales person and save money by buying at this store.  But she ultimately decided to pay a little more and buy the cabinets elsewhere, just to avoid working with that designer.  In fact, she even tells her friends to avoid the place.

If you’d like to read dozens of other examples of arguments that backfired, just Google “winning an argument” and scan the blog accounts of arguments with spouses, relatives, and friends.  You will find one piece of evidence after another for Carnegie’s central idea: The only way to get the best of an argument is to avoid it.  Especially if you want to develop new business.

The top ten ways for lawyers to increase client satisfaction

In the current economy, other lawyers will be coming after your clients.  Every lawyer would therefore be well advised to increase client satisfaction and protect the relationships that ultimately pay your salary, bonus, and rent.  You can’t make clients too happy.

Review these best practices from other law firms and select the tactics that best fit your practice.  

For current clients:

1. Schedule a free visit to a client’s office, to discuss the client’s business needs.
2. Schedule free monthly meetings or telecons “off the clock.” 
3. Conduct a formal or informal client satisfaction interview.
4. Ask the client what needs to be improved—responsiveness, timeliness, cost, and/or value—and brainstorm together about how to accomplish this.
5. Improve communication about the business implications of legal matters.
6. Increase transparency in budget estimates and billing.
7. Promote efficiencies to reduce cost, and tell clients about them.
8. Tell clients what they can do to help control or reduce legal costs.
9. Organize a client service team.
10. Improve your active listening skills.

For some litigators and others, referral sources are the most important source of new work, and should be treated as if they were clients.
For referral sources:
1. Update people promptly and regularly on the results of each and every client they’ve sent to you.
2. Ask yourself:  What has helped build this relationship in the past?  Do it again.
3. Ask yourself:  What have I done for them lately?  Do more.
4. Take them to lunch and ask:  how could I help you?
5. Schedule a visit to the referrer’s office to discuss trends in their business, and how you can help.
6. List your top referral sources and give them special treatment—such as giving out your home phone number—and make sure they know that they are in a special category.
7. Do some web research on your source’s business and work the facts into your discussions to show that you are doing your homework.
8. Send a handwritten thank you note.
9. Establish a regular schedule for updates.  Ask whether they would prefer phone or email.
10. Ask them to describe their ideal clients, then introduce them to some.

For more suggestions, see The LegalBizDev Success Kit™, a multimedia reference tool for lawyers who want to increase new business by building stronger relationships.

How to increase results by planning sales advances

Many lawyers increase results by adapting the concept of “advances” from Neil Rackham’s system of SPIN Selling, based on the most systematic research ever conducted on the sales process.

One basic idea from SPIN Selling is that if you measure the success of a sales meeting by whether or not you close a sale, you won’t see much success.  Only about 10% of the sales meetings that Rackham studied led to a decision, pro or con.  Instead, success should be measured by whether you are able to move the relationship forward, or achieve a behavioral advance.

Lawyers love this idea because it is backed by evidence, logical, useful, and easy to implement.  One implication is that you should prepare for every meeting and call by planning the advance you would like to achieve.  Another is that you can measure your short term business development success by the number of advances you are able to achieve.

An advance is a specific action taken by either party that moves the sale forward.  This could mean scheduling a meeting, getting introduced to a decision maker, or being asked to provide a summary of past experience.

One big mistake that novices often make is they try to push for too much, too soon. The best sales people are experts at judging what advance can realistically be achieved at any stage, and getting it. Which creates a natural progression to actually getting new business.

Successful rainmakers often plan the advance they hope to achieve at each meeting.  The trick is to predict the largest possible advance that is realistic, and to also have a second easier “backup advance,” in case it is not possible to achieve the first choice.

There is no generic solution to this problem; specific advances must be defined for every client and every situation.  Sales professionals spend a significant amount of time with their managers brainstorming these situations, and lawyers can be more productive if they too brainstorm with colleagues and coaches before key meetings.  Here are two examples for lawyers.

Example 1, in the table below, shows possible advances for an intellectual property lawyer who is doing about fifty percent of the patent work for a client, and would like to increase the percentage.

The advance (specific action that moves the sale forward)	Moves sale forward?	Easy to achieve?	Choice
Get a meeting with the new technical person who may be involved with patents.	A little	Easy
Bring new team associate to next meeting; stress this is strictly to intro­duce her—no charge for her time.	A little	Very easy	2nd  choice
Schedule satis­fac­tion review, to in­clude questions about how your legal services compare to other firms.	A lot	Hard	1st  choice
Provide progress review of patent work at the next meeting of the client’s board of directors.	A lot	Very hard

 Example 2 came from a brainstorming session with a lawyer whose firm had recently been added to an approved vendors list.  He expected to see his primary contact at a conference, and was trying to figure out what he should try to achieve.

The advance (specific action that moves the sale forward)	Moves sale forward?	Easy to achieve?	Choice
Request clarification on the step by step process for beginning a new engagement, after an assignment is made.	A little	Very easy	2nd  choice
Meet with the General Counsel (the decision maker).	A lot	Very hard
Meet with other in-house staff (who influence decisions).	Moderate amount	Hard	1st  choice
Get an assignment for the first engagement under the new contract.	A lot	Very hard
Discuss the specifics of several recent engagements that went to other firms, to get a sense of how decisions are made in this organization.	Moderate amount	Hard

This post was adapted from The LegalBizDev Success Kit™, a multimedia reference tool for lawyers who want to increase new business by building stronger relationships.

How to get started developing new business

There are three major ways that lawyers can work to develop new business:

1. With a coach
2. With a group of lawyers
3. Independently

A coach will provide business development expertise, someone to bounce ideas off, and a regular schedule of meetings to keep you on track.  In fact, if you work with a coach, you can stop reading this week’s post, because the coach will remind you of what you need to do each step of the way. 

You can also stop reading if you own The LegalBizDev Success Kit.  Instead download this Tip Sheet:  Download TipsLawyersB.pdf that will not only summarize the information below, but also refer you to specific pages in The Success Kit for more details.

But if you’re not ready for a coach, and haven’t yet purchased your Success Kit, read on.

Work with others

Most lawyers will follow up more consistently if they work with other people, so if you can’t afford or don’t want a coach, work with a group.  It could be your entire practice group, a formal committee including business development professionals, or just two or three lawyers who meet for breakfast once a month.  Working with a group provides social support, increases accountability, and leads to steady progress.  No one wants to go to a meeting and report that they failed to follow up on all their action items.  The simple fact that you know you have a meeting coming up will help spur you to action. 

Trying to develop new business independently is like buying an exercise bike.  Most exercise bikes end up being used to hang up clothes, and most plans to work independently on business development end up being ignored when the inevitable daily crises come up.

On the other hand, working alone may not be as good as the other options, but in practice it’s much better than nothing.  And there are some people who genuinely achieve more when they work independently, as long as they find a way to assure consistency and follow-up. 

Prioritize relentlessly

When lawyers ask me about the most important advice on marketing, my answer is simple:  Ignore good ideas.  Lawyers are much too busy to spend time on ideas that are only good.  To maximize the chances of success, you must focus on the very best ideas for your practice, your personality, and your schedule. 

This requires relentless prioritization, and constantly returning to the question:  “What should I do today to increase new business?”  You must place the highest priority on tasks that are most likely to yield the type of clients you want to work with, and the types of matters you prefer to focus on. 

How can you come up with the best list of activities for your unique situation?  Review things that have worked in the past for you, for your partners, and for other firms.  Do this quickly.  Because every minute you spend planning is a minute you are not following up with clients. 

Many lawyers would rather read about marketing than to pick up the phone and call a client.  If you are one of them, you must fight that tendency, and spend as little time as you can on studying.  Just jump right in and try something.   And when you do, keep a written record of what you tried, and what worked.  If you track short-term activity and results, you will be more likely to follow up consistently. This is especially critical if you are working alone.  For details on how to do this, see my post How to assure that you follow up consistently. 

Because developing new business is like going on a diet:  There is no sense starting unless you plan to stay with it.