The Latest Re: Business and Client Development in Australian Law Firms©



Julie Savarino of Business Development Inc. @juliesavarino with Andrew Barnes of Sladen Legal/Harwood Andrews and current President of ALMPA @AndrewBarnes_AU in Melbourne Australia

Almost fifty managing partners, practice group leaders and law firm marketers from Australian law firms attended the workshop I presented yesterday, “Mastering the Client Development (aka Sales) Process for Lawyers and Law Firms™,” at the ALPMA Annual Summit in Melbourne, Australia. Most attendees were from mid-tier and smaller law firms, and a handful were from major global law firms. Prior to and during the workshop, I polled the attendees on key issues, and some of the findings are summarized below.

§       In terms of effective client development/selling - Australian law firms are ahead of their United States counterparts in a few key ways:

o   They populate their firms’ CRM databases completely with all Outlook contacts. There is no opt-in option; it is a requirement upon arrival at the firm;

o   They pre-clear conflicts - both explicit legal conflicts and potential business conflicts - more thoroughly before engaging in outreach/communications with clients and/or potential clients for new work; and

o   They do not receive nor send/forward case alerts to let parties know they have been sued and to ask them for the business (which clients undoubtedly appreciate, since in most cases they already know they have been sued and have a short list of outside counsel already in mind, and not sending/forwarding these “you have been sued” alerts also saves the Australian law firms from the common and unknowing embarrassment of having numerous firm lawyers send/forward the same case alert to the same client repeatedly and redundantly - which is an almost daily occurrence in the United States).

§       While about half of attendees indicated their law firms have coordinated, firm-wide Strategic Development Plans in place, most of these plans still focus mainly on activities, mistaking activities (doing seminars, writing articles/blogs, attending conferences) for productivity (i.e., actual measurable new business), and do not have much coordination and/or ties to their remuneration/compensation and/or planning processes.

§       Only about half of the Australian law firms in attendance conduct an Annual Firm-Wide Strategic Assessment, and only half require and use Annual Business/Business Development Plans for all firm lawyers.

§       None of the Australian law firms in attendance have a formal, firm-wide Sales/Client Development Process or Pipeline in place within their firms. The majority of client development/sales activity is still conducted individually by Partners, although about a third use, organize and track basic sales pipelines at the practice/industry group level. The problem, however, is that these activities are still mistaken for productivity (actual new business) because the majority of attendees indicated that their lawyers are not converting enough networking opportunities/contacts into actual new clients/cases/matters.

§       Only the major global law firms in attendance have an organized, formal, firm-wide, ongoing Sales/Client Development Training and Coaching curricula in place for all lawyers by years of practice, level of interest and/or practice group. Instead, most Australian law firms - like their counterparts in the United States - offer only one-off sales training/coaching sessions periodically - most of which are not tied to actual new revenue results.

§       Very few Australian law firms have a formal, ongoing Client Review program and/or process in place, even though numerous studies show that client satisfaction and service ratings and changes over time are the main drivers of profitability and also leading indicators of potential demise.

§       Although Australia now allows ABSs (Alternative Business Structures), including non-lawyer ownership of law firms, very few law firms have adopted them as business development strategies. The main hurdle is the cost of insuring these structures. The major accounting firms and new alternative law firms are the main firms taking advantage of these new structures and are taking/absorbing significant client and market share from traditional law firms.

§       Misaligned and/or unrealistic expectations remain a major hurdle to effective and efficient business/client development for Australian law firms. For example, the majority of law firm leaders still expect all partners in their firms to develop new business from external sources, and as a result, most internal law firm marketing/bus dev support staff spend the majority of their time responding to a myriad of activity-/task-based requests from any/every lawyer, with little time for tracking or proactive strategic support.

 

For more information, please contact the author, Julie Savarino, at Julie@BusDevInc.com.

New Business Development for Lawyers and Law Firms – What’s Changed in 20 Years?©

Almost exactly twenty years ago, I was invited to speak in Australia, and while there The Australian Financial Review wrote about my speech. Since I am going to Australia this week to present a speech at the ALPMA Annual Summit, I dug up the old article and wrote this comparison of what’s changed in the last twenty years. Below are select excerpts from The Australian Financial Review  published on August 18, 1004 – almost exactly 20 years ago – in black text below. My “twenty years later” comments appear in blue text below.

“[Partners] are thinking very hard about their future as lawyers because the demands of the market are changing rapidly and the shape of the big law firm of today is likely to be quite different in 10 years’ time. Certainly very different from the time when the Corner Men were mere Partners. If Julie Savarino, an articulate law firm consultant from the United States, one of the speakers at a seminar held by the Australian Law Firm Marketing Association at Freehills in Sydney, is any guide, there are other big changes in the wind. She gave a fascinating insight into the U.S. trends, which as a matter of trickle-down inevitability are ultimately adopted here [in Australia].”

1.                  “[Julie Savarino] pointed to the tremendous growth in negligence actions against U.S. law firms, which has meant that most of them have incorporated to limit the partners’ personal liability. Professional indemnity premiums are still going up, but at least the ski lodge is safe.”

NOW 20 YEARS LATER: Since the adoption of limited liability entities in the United States in the early 1990s, virtually every U.S.-based law firm is now incorporated and/or operating as a partnership under some type of limited liability protection. An excellent move because in the United States, claims and lawsuits against lawyers/law firms alleging malpractice, negligence, conflicts, breach of confidentiality, fraud and related claims have risen exponentially. In the early 2000s, Australia also adopted limited liability entities for law firms, known as IPLs (incorporated legal practices), providing a vicarious liability shield for firm lawyers, a form many law firms chose to incorporate under.

2.                  “The other important insight that Ms. Savarino gave was the client pressure on law firms to perform more cost effectively.”

NOW 20 YEARS LATER: Client pressure on law firms and lawyers has only intensified in the past 20 years. Alternatives to traditional law firms have absorbed/taken significant market share away from established law firms. Pressure to be more efficient has never been greater. Forward-thinking firms are proactively using technology, process management, outsourcing, partnering and other strategies to remain competitive.

3.                  “Tendering [a.k.a. RFPs in North America] is rampant in the U.S. Going fast are the old standing client-law firm relationships. Corporate clients are insisting on “requests for proposals” to dole out the assignments. The process forces the firms to focus on cost and strategy before the client even begins paying. A Wall Street Journal article recently quoted Ms. Savarino as saying that there’s “a lot of denial still going on” by law firms who would prefer to avoid the bidding process.”

NOW 20 YEARS LATER: Comparing the results from our Use of Proposals survey conducted in 1993 (highlights were published in The Wall Street Journal – if you would like a copy, please contact me), the use of RFPs to select and cull outside legal counsel has increased approximately 700%! Yet too many law firms remain in a mainly reactive posture relative to RFPs and pitches. For example, few law firms really know or annually track just how much time and money are spent on RFP responses and pitches, and few firms have an efficient RFP process. In addition, way too few law firms have a proactive, formal client review process truly institutionalized within their firms. In the current market, rarely (less than approximately 20% of the time) are lawyers or law firms formally “fired” by in-house counsel or other clients – the clients simply stop sending new matters/cases to the incumbent firm and start sending their work to the new provider. In the current market every opportunity; every new case/matter – even with an existing client – is competitive. The vast majority of clients know at least two to three other outside lawyers equally qualified, competent, eager and available. Clients do not always go to the trouble of issuing a formal RFP, but lawyers need to embrace the fact that they are competing almost every time.

4.                  “Ms. Savarino also talked about the growth of the “virtual office” (working away from the desk – at the client’s or at home) and the increasing interest among professionals in lifestyle issues.”

 NOW 20 YEARS LATER: Law firms that currently do not allow flex-time and/or off-site work options as a standard practice are simply no longer competitive and will not be able to attract and maintain young, emerging talent or those who require non-traditional work hours.

AUTHOR’S NOTE: The excerpts quoted in black text above are from The Australian Financial Review article entitled “Time to re-assess the means of capitalising our law firms” written by Richard Ackland, published August 18, 1994 and copyrighted by The Australian Financial Review. For more information or to request a copy of The Australian Financial Review and/or the Wall Street Journal articles mentioned above, please contact  Julie Savarino,  Julie@BusDevInc.com, +1 734 668 7008.