3 Common Business Development Mistakes

Only about 5-10% of lawyers or key professionals in any single firm are "natural" rainmakers who are born with the predisposition, personal style, contacts and/or skills that help make them significant business sources. Depending upon the total revenue generated annually by that 5-10%, the key issue is in most firms: Is there enough business coming in the door currently and in the pipeline to keep the remaining 90-95% of practitioners 100% billable and collectable? For those lawyers and other practitioners who are not natural-born rainmakers, but have the interest and desire to become one, there is significant hope. Examples abound of self-made rainmakers. To be the best rainmaker you can be, it is wise to avoid the most common mistakes in thinking and approach:

Mistake #1 - Thinking: "I AM marketing! I do seminars, write articles and attend conferences" - Simply "being out there" is no longer enough. Speaking, writing articles, attending seminars and conferences in and of itself will help develop viability and recognition - but not necessarily lead to new business. To successfully compete in today's market, client development must be added to marketing efforts in order to consistently generate new business. Successful client development comes by focusing on whom you know and meet; whom you communicate with; what you communicate and how; and most importantly, your follow-up discipline. The law and all professions are - after all - inherently people businesses. Without a client relationship development focus, wanting to develop business by just "being out there" is mainly wishful thinking.

Mistake #2 - Thinking: "I will do this when I have time" - This mind-set is a slippery slope and fallacy: the more successful you are, the busier you are and the less time you have. So, you may think that time will open up and/or appear, but it rarely happens. The key is to carve out specific and routine time each week or month. Not just to engage in a stand-alone marketing or business development activity - like simply going to lunch. Instead, allocate time to think, strategize, prepare, plan and then execute your client development follow-up.

Mistake #3 - Engaging in shotgun efforts and approaches - The thinking may go something like, "Aha! I have a few hours this week - I will write an item for the firm's newsletter." This is fine if you are trying to build your list of credentials. But the majority of business is developed one-to-one or in very small group meetings - not by articles or media exposure. The best an article can do is generate inquires, but most firm newsletters no longer accomplish that because they are so firm-focused that few clients bother to read them. Clients are inundated with such pieces and unless they are focused on and written for a specific industry, type of company, problem or issue, the old "Smith & Smith Legal Update" has become too generic and cumbersome to generate significant inquiries and/or new business.

To become a better rainmaker, to help increase the number of rainmakers in your firm or the amount of revenue rainmakers generate in 2008 and beyond, consider:

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Mastering the "Sales" Process for Lawyers - Thursday, May 22, 2008, New York City at the offices of Patterson Belknap Webb & Tyler LLP, 1133 Avenue of the Americas. For more information or to read what recent attendees had to say about this program, please click here.

Outsourcing Select Marketing and Business Development Functions Gains Traction©

With the 2008 annual compensation, budgeting and planning processes in full swing, many firms are carefully reviewing and analyzing their highest cost centers in an effort to control them and get the best return on investment ("ROI"). For most law firms, staff, technology, marketing and business development costs are doubling every three to five years. According to recent benchmarks, marketing and business development ("marcom/busdev") budgets are growing up to three times faster than average revenue. Given that exponential growth rate in this highly competitive market, it is crucial to prove that the marcom/busdev budget is contributing a measurable ROI. For some firms, outsourcing either highly repetitive or specialized functions, or those functions for which the current staff does not have the time or capability, makes both strategic and financial sense. Outsourcing can enhance overall service levels and provide access to the most qualified talent without adding to headcount. Some keys to consider:

Which marketing/business development efforts/activities yield the highest return on investment (ROI) for your firm, practice groups and lawyers? If your firm does not track ROI for each marcom/busdev effort,* you can assume that the greatest ROI comes from lawyers' face-to-face meetings with clients, contacts and prospects. Therefore, perhaps the majority of the firm's marcom/busdev investments should be directed accordingly. It is no longer enough to simply provide each lawyer with an annual, individual marketing/ business development budget and "hope" it is wisely spent. With the intense competition between law firms, it is paramount to have all interested lawyers trained in the most critical sales/client development techniques to enhance whom they communicate with; what and how they communicate; and their follow-up methods and system. These skills can be taught using a combination of training and coaching conducted by highly qualified and experienced staff. Some internal marcom/busdev staff have the requisite experience and skills, but most find themselves either short on time, especially to create a systematic program and/or are not as qualified as outside assistance. As a result, many firms have chosen to outsource this strategic function either completely or partially. One firm found an external resource to serve in the Chief Business Development Officer role that has significant relationships with numerous in-house counsel.

Define the specific functions and deliverables of your firm's CURRENT marketing and business development function. Most law firm marcom/busdev departments deliver a menu of support services and products internally and externally, ranging from basic and foundational to sophisticated efforts. At least three law firms knew they did not have the proper marcom/busdev infrastructure and could not find the caliber of Chief Marketing Officer ("CMO") they wanted and needed in their region, so they retained an outsourced CMO who travels to the firm and offices from one week a month to three months at a time. Doing so has allowed them to build an effective marcom/busdev infrastructure in less time with greater assurances of completion. Similarly, many firms have found that outsourcing the media/public relations and/or marketing writing functions helps them achieve appropriate local, regional, industry-based, national and/or global media exposure.

What should the firm's department be delivering that it is not currently? Most law firm marcom/busdev departments are spread too thin, doing too much for too many without direct, measurable ROI. Now (4thQ) is a great time to send around an annual review questionnaire to all Partners/Shareholders asking how well their marcom/busdev support needs are being met, what their expectations are and what else can be done to support their efforts to bring in more business. For example, one firm conducted such a review at the practice group level at year-end 2006 and several groups requested large amounts of money for advertising campaigns. However, the firm's management realized that the groups requesting advertising dollars were doing little else to develop work, and instead management asked that individual business development plans be created and implemented in 2007 before dollars were allocated to advertising.

What is the firm's ratio of lawyers to marketing/business development staff? If it is any higher than approximately 35 to 1, most likely the firm's marcom/bus dev staff does not have enough time available to get all the requests, tasks and jobs done well and produce/track a measurable result. Most marcom/busdev staff are overwhelmed with too much work, too little direction from leadership and not enough professional time. Streamlining efforts and activities towards those that get a measurable ROI not only helps the firm's growth but avoids the turnover expenses caused by frequent staff departures. Most firms can benefit from a management-led, year-end review and subsequent new year announcement containing specific upgrades, changes and/or adaptations that firm owners can expect from the marcom/busdev staff and functions.

*If the firm does not track ROI for marcom/busdev efforts and activities, creating a measurement metric for each majority activity/effort would be a great use of time and money in 2008.

Please contact me if we can be of service to your firm in 2008 on a project basis or on an outsourced basis. Thank you. Julie Savarino, T (734) 668-7008; email Julie@BusDevInc.com.

Visit the Ultimate Business Development Tool Kit™ at www.BusDevInc.com.

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Greatest Marketing Challenges

At a recent meeting of an international association of professional services providers, I posed important questions using interactive audience response technology (graciously provided by Express Solutions). When over 100 attendees were asked: What is the single greatest marketing challenge your firm is currently facing?

The response was:
1) Developing more rainmakers and effectively following up on current opportunities (TIE)
2) Helping practitioners find/make time to develop business

Interestingly enough, when I asked this same question over 8 years ago to the over 250 attendees at the 'Marketing Partner Forum' (which up until 2000, I invented, designed and operated), the response was very similar. So the question is -- why are firms still unable to develop more rainmakers?

In my professional opinion, the answers can be found within any single firm by analyzing the three most critical pillars needed for an effective business/client development program: people, processes/procedures and technology. Unfortunately, because of the demands inherent in the billable hour business model, the majority of firms - at best - have only piece-meal or short terms solutions/efforts supporting these three pillars necessary to consistently develop more rainmakers and new business. For example, consider one aspect of the first pillar -- people. In the hiring process, it is one thing to hire great lawyers. It is another to hire great lawyers who can evolve into business advisors able to provide counsel and advice in a consultative manner. Without an overall business orientation and mind set, lawyers can remain myopic with a narrow legal focus and tend to have less productive people skills necessary to develop new work. How does your firm's recruiting, hiring, selection, development and retention processes support and encourage the development of rainmakers?

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Penny Wise, Pound Foolish? Are Firms Being Short-Sighted?

QUESTION #1: Is it realistic that firms with billed/collected hour targets over 1,800 can "require" or even expect any significant, meaningful business development efforts over time from most lawyers? According to statistics, only around 20% of qualified new business leads are ever even followed-up upon by lawyers/professionals. In almost every instance, following-up is crucial to closing the business or getting it in the door. Is there simply not enough time in the billable hour business model?

QUESTION #2: Can this follow-up job be "delegated"? Yes, it can. But, it is ethical, professional and tasteful to do so? Arguably not. First of all, very few prospective clients will hire a lawyer or other professional service provider without having met them and developing at least a minimum level of rapport, trust and/or confidence (unless they come highly referred by another trusted source). Second, having non-lawyers follow-up with prospective clients with the intent to develop business is an ethical violation of the ABA Rules of Professional Responsibility and the corresponding rules in every state. Third, is a person who will not be doing the work or involved in the work the best person to follow-up? To answer that question, put yourself in the client/prospect's shoes: would you like a person not actually involved to be 'selling' you? Finally, is the firm willing to compensate appropriately qualified personnel for this time-consuming and critical role? Most firms do not. Instead, they look to the least expensive person possible whom they hope will be qualified and able to do the task, then overwhelm them with many other responsibilities and hope for the best.

QUESTION #3: How relevant is realization? In the last five years, most firms have seen an exponential increase in the total number and actual percentages of discounts they give clients/prospects off their "rack" or standard hourly rates. Discounts can now amount to up to 20% of a firm's total hours produced and up to 30% off the standard rate amounts. So, "rack" rates are becoming increasingly irrelevant. The only number that really matters to boost the bottom line is what is actually collected -- or what the client is willing to pay. Is this increasing irrelevance of realization another symptom of the decline in the billable-hour business model?

QUESTION #4: What keeps you up at night?

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Hot Legal Issues

Within the multi-layered cyclicality of the global economy and resulting changes in industries and business, legal problems evolve and surface in waves. Recently, some hot areas I am observing include:

1) Subprime and prime lending institutions, loan portfolios and borrowers – These matters have a downstream effect on legal services, offering opportunities for transactional lawyers, real estate lawyers and sometimes resulting in complex commercial and financial related litigation.
2) Privacy and security in Internet technology and communications – These types of cases are increasing at both state and Federal levels, are affecting businesses and consumers and often require new or updated policies and/or procedures.
3) Insurance coverage – Certain states have seen a dramatic rise in such claims due to particular natural disasters. However, as a generality insurance coverage claims are on the rise due to increases in denials and rescissions across-the-broad.
4) Diverse lawyers – Particularly, qualified lawyers of color or varied ethnic origin have unprecedented opportunities to obtain outside counsel work from Fortune 500 companies with strong diversity hiring policies.
5) International ADR – Global business is generating not only opportunity of global proportions, but also lawsuits involving numerous, multi-country jurisdictions and the associated expense. Companies are turning increasingly to ADR solutions, a trend which is expected to continue into the future.

The above are just five examples of what’s hot. What’s hot in your practice area?

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Mastering the Sales Process for Lawyers©

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Elephant in the Room! Two Key Obstacles to Effective Law Firm Business Development

Commitment and Approach – Given steady revenue growth in recent years, too many firm leaders continue to consider the business development process as secondary and/or non-essential to the practice of law. Maybe they think that organized client development is not that important to building the practice and/or is not a priority given so many demands on available time. Too many firms continue attempting to “delegate” business development or try to “get it off the plate” by hiring someone to handle it, which can be referred to as the “throw a person at the problem” approach. Too often, the person hired is not given the necessary authority, responsibility and/or budget to produce any measurable results or to build any significant, meaningful program. Instead, many are relegated to some variation of being a “party planner” (which is a necessary and important function, but is only one component of the entire business development process). In addition, firms that hire marketers or business developers with no or little law firm experience must allow for a learning curve to get them up to speed on the practice of law, which often means mistakes and/or oversights. Too often, that person loses patience, is unable attain internal credibility, may not be supported by leadership and/or cannot build enough political capital – and thus leaves the firm. Then, the firm’s entire business development effort must be re-built from scratch (which can be referred to as the “re-invent the wheel” or the “stop-start” approach). Commitment and approach are also an issue at the grass roots level where too many lawyers/professionals invest only in a short-term or one tool effort to develop business. Maybe a litigator who is less than 100% billable will conduct a seminar, but then when the plate of work is once again full, drops the ball on all contacts made at the seminar and necessary follow-up. . The same thing happens to in-house marketers often because they are pulled in so many different directions within their available time.

Attitudes – Closely intertwined with an unproductive business development commitment and approach (at the firm, leadership and individual practitioner levels) are issues related to attitude. Recent studies by BTI Consulting found that lawyer arrogance has not dissipated along with the reduced stature of lawyers in business and society in general. Arrogant behavior is ego-boosting, making people feel superior to others. Unfortunately, too many lawyers think they are better than the competition, an attitude that perpetuates arrogance. In addition, as Scott Turow wrote in his article entitled “The Billable Hour Must Die”, published in the ABA Journal, August 2007, “America is ambivalent about lawyers. They see us as too often self-seeking, manipulative and greedy”. Lawyering is a profession, yet remains at its essence a service provider function where each and every lawyer is in service to the client both internally and externally. Unfortunately, too many lawyers seem to forget that simple fact. Amazingly enough, a small number of in-house marketers also act arrogantly, behaving in self-seeking and in less than courteous, professional ways (perhaps mirroring their lawyers’ behavior or firm culture?). Unfortunately, almost all arrogant attitudes and behaviors (except those emanating from the VERY best – which are very few) negate most efforts to build sustainable, productive relationships and a book of business over time. The foundation of developing business starts and stops with relationship building and a display of arrogance, self-centeredness and/or manipulative behavior makes it is very difficult to initiate or sustain positive, productive relationships with prospective clients and referral sources. It stands to reason that those responsible and accountable for developing business – rainmakers, firm leaders and in-house marketers alike - should set the standard high for professional, courteous and respectful behavior towards others at all times.

What is the commitment, approach and attitude like at your firm?

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