6 Killer Rules to Developing Business

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The best business developers play by different rules than everyone else. Some rules come naturally and others are learned. Aspiring rainmakers can learn from the best. BTI isolated rules which serve as guideposts for those who bring in the most business. These are the 6 rules for killer business development.

 


1.       Know your client

2.      If you don’t have a solution, stop

3.      Leave the sales pitch at home

4.      Link to business

5.      Every question matters

6.      Relationships are king

The best part of these 6 rules is almost anyone who wants to adopt them can. You can start with one—the one feeling most natural to you. Then add another, and another, until you get to the six. These rules will not only add to your business development prowess but also will add to your billable hours as well—how do you think the top rainmakers bill so much time?

JPD

The Mad Clientist: Shoveling Snow Unlocks Market Feedback for Start Up

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Around the age of 8, I started to shovel snow to earn extra money in Lynbrook, NY, a suburb of New York City. I had 2 main competitors: my friend from across the street and another at the end of the block. We each charged $2 to $3 per house, and we all used the same strategy.

The natural marketing strategy was to leave the house and knock on doors to offer our services. We would visit the closest houses first and then fan out, skipping houses where there were kids our age. We made a good living for our age and kept ourselves in baseball cards and other essentials of the time.

As one particular storm was ending, I decided to change my strategy. I went out early and could see I was the first one out. I skipped my own house and walked 3 blocks away before I started knocking on doors. I started with Marjorie’s house, named for the high-school girl who lived there. Marjorie’s mom answered the door and promptly hired me.

I went to work and tried to do an especially good job. I am not sure of the reason, but I was pumped. I shoveled the entire length and width of the 20-foot long sidewalk. I shoveled outside the decorative rails going up the steps as well as the inside where people walked.

I finished the job, promptly ringing the doorbell. I received a nice thank you and compliment. Marjorie’s mom also handed me a crisp 5-dollar bill and told me to keep the change. I was in heaven. This was serious money.

I went away trying to spot more homes who would pay premiums, wondering why they would. I changed my whole approach with the next snow storm.

I made sure I would get to Marjorie’s house first, even before shoveling my own walk. I worked the outer fringes of the neighborhood first instead of treating my home as the starting point. I kept a list of the people who tipped and paid premiums. One customer asked me if I would take on shoveling their snow for the entire winter – my first long-term contract. I offered this same arrangement to other premium payers who all agreed.

I shoveled snow until the age of 14, when I was living in Poughkeepsie, NY –  where there was a lot more snow than in Lynbrook. This extra snow, and 6 years of experience, brought another realization: I was better off paying a neighborhood kid to shovel my own driveway while I was out getting paid for 2 to 3 shoveling jobs, instead of performing a non-revenue assignment.

I quit the snow shoveling business and found other ways to make money. I look back and think about how much guidance I got from my clients and the market itself, much as I do today. I am a bit of proud of the idea of hiring someone to shovel my own driveway to leverage my time. And every time a storm hits in the western suburbs of Boston where I live, I am reminded how much can be learned by listening to your clients.

MBR

Legal Marketing Association Annual Conference - New Orleans

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The Legal Marketing Association’s annual meeting is always a great conference and a valuable learning experience. BTI Principal, Jennifer Dezso, will be attending and presenting a not to be missed session for firms targeting new business from existing clients. Wednesday, April 11, 3:30 – 4:30

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The Best Source of New Work — Training Your Attorneys to Use Everyday Client Interactions and Informal Client Feedback to Develop More Business

Did you realize 80 percent of your firm’s future profits will likely come from existing clients? Your attorneys are on the frontlines of driving this business development opportunity. But, BTI’s latest research shows 86 percent of attorneys think their approach to business development is not aggressive enough to win new work from clients.

The primary obstacle is not knowing how to talk to clients outside the context of current work in order to build ongoing business and cultivate bigger relationships. This interactive, train-the-trainer session will teach you how to get your partners comfortable talking shop with clients as a gateway to winning new work. You’ll leave with an agenda and discussion guide to share with your attorneys.

Topics include:

  • Five ways attorneys can develop business without having to “sell”
  • How attorneys can adopt a comfortable communication style to transition from formal matter communications to informal conversations with clients
  • Six questions attorneys should be asking about their client’s business and how to use the answers to identify new opportunities
  • How to lead a post-matter meeting and fill your business pipeline at the same time

How BTI Client Service All-Stars Outperform Everyone Else

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It’s not just one thing. It’s everything—the total package.

The BTI Client Service All-Stars deliver better client service than everyone else. Their secret? They care about all things and everything client facing. For the first time, clients note total client experience as one of the top traits separating a BTI Client Service All-Star from the rest. The All-Stars are delivering a superior end-to-end experience, and this will set the new standard moving forward.

Clients single out the following practices, protocols, behaviors, and interactions separating their BTI Client Service All-Star from all others: 

  • Using both formal and informal communications to keep a continuing stream of dialog around legal and non-legal issues.
  • Advising clients on budgets and deadlines—before clients ask.
  • Talking about how to improve their performance.
  • Cutting to the chase.
  • Posing and answering billing questions—before clients ask.
  • Knowing and behaving as though there is a continuing stream of needs and business.
  • Writing RFPs for clients who are forced to put work out to bid.
  • Helping with things outside of clients’ legal work (managing bosses, career counsel, helping with personal and family matters).
  • Making themselves accessible—even when they are not.
  • Communicating new insights in a manner which makes clients feel special, like they are the first to be learning.
  • Sharing new ideas, thoughts, and insights and asking clients for their opinions.
  • Invoicing on a timely basis.
  • Educating themselves about clients’ business on a frequent, regular, and systematic basis, and discussing this insight with clients. They also build this insight into their legal counsel.
  • Using assistants and associates to ensure clients know their whereabouts and the status of deliverables.
  • Designing and sharing back-up communication plans to manage communication when they are hard to reach.

Don’t worry about delivering on all these actions. Start with a few. Even a couple is fine. But start if you haven’t—and add more once you work these into your normal routine. The more you add the easier these behaviors become. And, they not only get easier—they create more billable hours and boost productivity. You become more efficient, create demand for you and your firm, and deliver world-class client service—the trifecta of developing new and continuing business.

MBR

(Based on BTI research conducted on a rolling basis between February 2017 and January 2018. BTI conducted more than 350 independent, individual interviews with top legal decision makers at large organizations with $1 billion or more in revenue.)

Clients Single Out 326 Attorneys for Superior Client Service

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326 attorneys master the art of superior client service.

In the eyes of clients, these attorneys are unsurpassed in the client service arena. These are the BTI Client Service All-Stars 2018. This report honors the individuals able to stand out in the sea of legal services providers to represent the cream of the crop.

Corporate counsel single out each attorney—by name and in an unprompted manner—as delivering the absolute best client service. No attorney or firm can self-nominate, self-refer, nor pay to be included in this report. Clients have the final—and only—say.

This year’s Client Service All-Star lineup is especially strong. We note 6 associates standing out for superior client service—an enormous accomplishment, and advantage, for each of the 6 as they move forward in their careers.

One attorney has been named a BTI Client Service All-Star for a stunning 15 years:

H. Rodgin Cohen, Senior Chairman
Sullivan & Cromwell

Consecutive Years:

5 Years
Tracy E. Kern, Partner
Jones Walker
E. Joshua Rosenkranz, Partner
Orrick

4 Years
John T. Baecher, Partner
Norton Rose Fulbright
Stephen I. Glover, Partner
Gibson Dunn
Kirk T. May, Founding Shareholder
German May

3 Years
Edward D. Herlihy, Partner
Wachtell, Lipton, Rosen & Katz
Gregg M. Lemley, Shareholder
Ogletree Deakins
Randi C. Lesnick, Partner
Jones Day
Jennifer R. Mewaldt, Partner
Faegre Baker Daniels

 

2 Years
Ron Chapman, Jr., Shareholder
Ogletree Deakins
A. Craig Cleland, Shareholder
Ogletree Deakins
Gregory Carl Cook, Partner
Balch & Bingham
William Donovan, Jr., Partner
Cooley
Paula J. Morency, Partner
Schiff Hardin
Jonathan M. Moses, Partner
Wachtell, Lipton, Rosen & Katz
Richard R. Patch, Partner
Coblentz Patch Duffy & Bass
Rick Richmond, Managing Partner, Los Angeles
Jenner & Block

 

Super All-Stars—Attorneys Named by Multiple Clients This Year:

Anthony Alden, Partner
Quinn Emanuel Urquhart & Sullivan
Alan W. Beloff, Senior Counsel
Morgan Lewis
David K. Callahan, Partner
Latham & Watkins

Jonathan L. Corsico, Partner
Gibson Dunn
Sean C. Feller, Partner
Gibson Dunn
Frank Layson, Partner
DLA Piper

Cultivating Firmwide Success
Only 13 law firms are home to 5 or more BTI Client Service All-Stars. These firms account for 92 BTI Client Service All-Stars—suggesting a culture of client service permeates each organization. These 13 firms are:

Jones Day 16 – a new record
Gibson Dunn – 11
DLA Piper – 9
Arnold & Porter – 7
Latham & Watkins – 7
Ogletree Deakins – 6
Wachtell, Lipton, Rosen & Katz – 6

Cooley – 5
Morgan Lewis – 5
Polsinelli – 5
Seyfarth Shaw - 5
Sullivan & Cromwell – 5
Williams & Connolly – 5

8 of these 13 law firms are also singled out by clients in the BTI Client Service A-Team 2018, appearing on this year’s BTI Client Service 30.

We congratulate each and every BTI Client Service All-Star. They continue to exceed clients’ ever-rising expectations, as measured by the most demanding clients. Click here to see every attorney we celebrate for client service excellence as measured by clients—the sole and final judge.

MBR

The 17 BTI Business Development Badasses

Business development is turning law firms into hawks and doves. The hawks seek out the clients they want. They invest more time and thought into winning and have a strict go/no go policy for RFPs. The hawks show up more prepared than anyone one else and way more than clients expected. More than competitors expected, too.

13% of law firm leadership partners characterize their firm’s business development as aggressive. This means 87% don’t; they are BD doves. Some doves will turn into hawks. And some will rise above the hawks and become the Business Development Badasses who rule the world of acquiring new business.

We asked more than 150 law firm leadership partners, including the self-proclaimed hawks, who is at the pinnacle of being strategically aggressive—these are the firms to beat to win at business development.

These 17 firms are today’s BTI Business Development Badasses:

 

•       Davis Polk
•       Dechert
•       Fish & Richardson
•       Fried Frank
•       Honigman
•       Jackson Lewis
•       Jones Day
•       King & Spalding
•       Kirkland & Ellis

•       Latham & Watkins
•       Lowenstein Sandler
•       Mayer Brown
•       Morgan Lewis
•       Paul, Weiss
•       Quinn Emanuel
•       Skadden
•       White & Case

These firms go deep—bringing strategy, knowledge, and resources to bear. They think in terms of proposing teams with the right skills and chemistry. The BTI Business Development Badasses communicate with clients early and often, blatantly ignoring the rules about not contacting clients before the pitch. They follow up with thoughtful, targeted information based on these communications.

The best of this group start an informal dialogue—as if they have already won the client. An approach worth adopting no matter how aggressive you are.

It has never been more difficult to keep existing clients and acquire new clients. And it will only get harder from here. This will make the difference between the hawks, the doves, and the Business Development Badasses so important.

MBR

(This research is based on more than 150 independent, individual interviews with leading law firm leadership between June 2017 and January 2018.)

Marketing Budgets per Attorney Jump Nearly 11%

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Budgets may not be going up as a percentage of revenue, but per capita spending is. CMOs have been both clever and skilled in managing their budgets. Overall, increases in revenue are slightly outpacing increases in attorney headcount. Most CMOs have been able to keep their budgets untouched. This means the Marketing and Business Development (MBD) Budget per Attorney increases—in effect, resulting in an increase on a per capita basis. This is the most reliable indicator of MBD spend. 

The average law firm spent $18.9 thousand per attorney on MBD in 2017, up from $17 thousand in 2016. But, spending is no longer the main story. As legal marketing budgets as a percent of revenue converge around the 2.6% mark across firms—how the money gets spent has more impact.

CMOs continue to adjust budgets to drive revenue. Legal marketing tactics and strategies can now drive success—giving CMOs and marketing departments more visibility, more impact, and more voice. This is what many CMOs have been waiting for.

MBR

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(Based on BTI research conducted between June 2017 and December 2017. BTI conducted more than 160 independent, individual interviews with leading legal marketing executives at a range of law firms from Am Law 30 to Am Law 200.)

7 Unintended Branding Events to Stymie Any Brand Strategy

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Law firms have at least 2 branding initiatives at any single point in time. One is carefully planned, orchestrated, researched, and measured to determine its success. The other is far less formal. It occurs as interactions between the individuals at your firm and people outside the firm—namely clients and potential clients. This informal branding leaves a larger and much more lasting imprint than your formal initiatives.

The good and the bad news is the interactions between your firm and the rest of the world are almost limitless. But of this plethora of interactions, our research shows 7 stand out with much more impact than all the others:

Scope Changes

Inevitable scope changes either destroy or boost your brand. They are never neutral. The firms actively discussing scope changes with clients on a real-time basis look good and make their client look good. Your client can announce changes to their internal stakeholders well in advance of completion and look like they are in control and know where things are headed. Clients brand these proactive firms as being on top of their plan, strategy, and able to adapt on the fly.

Clients remark the firms not reporting the impact of scope changes on a timely basis are just not client focused and/or not thinking about their matters strategically. Neither is likely to get you more business.

How You Treat Your Client in the Courtroom or Negotiations in Front of the Other Side

Top legal decision makers tell us they learn so much about firms by watching them in the courtroom, negotiating deals, dealing with regulators, or in action somewhere. They watch the legal strategy unfold, but are equally mindful of how these attorneys treat their clients. Some describe opposing attorneys as heavy handed and dogmatic while others envy how the other side behaves. Equal numbers of corporate counsel make the decision either to hire the other side the next time out or to never use them based on what they see during a live performance.

Your Pitch

Clients believe they are seeing you at your best. Whatever you present, say, and do brands you forever, or at least for a very long time. This is the ultimate direct experience. Clients presume the insight you bring during the pitch will be the level they can expect during your work together. The look and feel of your presentation, the level of interactivity, the level of teamwork, the specificity you bring, and the ease with which you move through the pitch set the expectation—and to a large extent—tell clients what your firm is worth.

Your Final Invoice

The one document every single client reads. Whether or not you’ve discussed it in advance, clients always have a figure in mind of what your services will cost. They expect your invoice to be reflective of their expectations and expect it to be concise. The minute your final invoice includes any billings your client doesn’t already know about, the negative branding begins. Your final invoice represents the culmination of your strategy, planning, and ability to execute the plan.

When your invoice doesn’t match the client’s expectations, clients immediately know this is about surprise charges, untold changes in scope, impacts of unplanned events, or changes in fact and circumstance. If your client learns any of these things through the invoice and not in a conversation with you at the time of the change, they will label your firm as unreliable. To clients, their budget is just as important as the outcome.

The budget is one of the items which clients report to others outside the department. When clients have to explain budget overruns to their boss—or worse, the Board—they look bad in front of the people who matter most. The firms making them look bad are branded forever.

And if your client never brings up the budget, remember: Every client has a budget, even when they have no budget at all.

Your Voicemail Message

Clients believe your voicemail message speaks volumes about your approach to client service and individual clients. Clients want to know when you will be back and when you will be answering calls. They also want a reference to someone they can reach for immediate needs.

Top legal decision makers take note of the attorneys who are silent about when they will return; the messages just saying “leave a message,” and those saying they will “reply at their earliest convenience.” Clients brand these attorneys as those not to call with important and time-sensitive matters.

Your Email Signature

Clients want to be able to reach you when they want. All things being equal, which they often are, convenient access to your email and phone are surprisingly essential. This is especially true for questions about new issues and when your client wants to brainstorm or is looking for an opinion. These are the conversations which lead to new work. Be sure to include your email, direct office number, and cell phone in every email (and reply email) to clients.

Asking for Meaningful Client Feedback

Law firms seeking client feedback are still in the minority. This applies to the hardcore feedback which clients believe is so important to improving performance—and to making their own life easier. The law firms conducting world-class client feedback interviews where clients learn something about themselves and you learn how to improve, differentiate themselves from other firms.

You can turn unintended branding into a positive brand differentiator for your firm by exercising the same diligence as you do to intentional branding initiatives. Embracing the tools like scripts for voicemails, templates for email signatures, hardcore training for client-focused pitches, and measuring how quickly you tell clients about scope changes will all harness the power of unintentional branding. You will not enjoy a stronger and more unified brand—you will stop unintentional branding from standing in the way of winning the next piece of new work.

MBR

Anatomy of a Client Development Plan

20% of clients will drive 80% of your firm's financials. BTI Principal Jennifer Dezso shares how focusing on developing a comprehensive file on your star clients helps better manage your future business development efforts.

You can view the video by clicking the image below, or on YouTube directly here: https://youtu.be/NfXmphZgyNA

With this series we’ll be taking an in-depth look at a wide range of client relationship best practices. We’ll be releasing Client Relationship Lab webisodes on our blog every month—subscribe today (in the box at the upper right of your screen) and be sure you don't miss a single one.

Clients Shatter 2 Records Helping Latham Shatter $3 Billion in Revenue

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Clients are on pace in 2018 to record levels for spending the largest amount ever on outside counsel. At the same time, they rely on fewer law firms than ever.

Latham, which has just posted the highest revenue of any law firm, has been following and using these shifting client and market trends to its advantage for more than 10 years—it’s one reason Latham’s growth is in overdrive. 

Latham’s unprecedented growth is turbocharged by the firm understanding why clients are consolidating their work and then positioning the firm to pick up major chunks of new business with existing clients by delivering what clients are seeking.

Latham’s winning approach? Adopt the ‘provide-the-best-value’ approach, not the low-cost provider approach—and clearly this tactic is working.

This strategy becomes clear once you understand why clients are consolidating work.  

Improving Risk Management

The current round of consolidation is all about risk management and adding value. Clients have been cutting their law firms in an especially aggressive manner—dropping more than 19% of their firms over the last 3 years. On average, clients now have a record low 34 law firms on their panel, down from 42 firms in 2015. Clients’ goals with consolidation are to:

  • Streamline outside counsel management
  • Stop working with firms not adding measurable value
  • Have law firms build institutional knowledge about the company
  • Develop uniform understanding of their preferences among their law firms
  • Create uniform understanding around the risks they face

It’s Not About the Fees

Cutting your fees won’t keep you on the roster anymore. What clients are looking for most in their panel firms is: 

  • Knowledge about their specific risks and exposures
  • Vehicles to share and discuss this knowledge
  • Candor—how can they do things better and smarter
  • Tools—budget/progress dashboards and other tools where key information is now on-demand
  • Education on issues they need to know—going well beyond e-alerts

These criteria have big implications for how to develop big client relationships: 

  • Clients teams who don’t offer client-specific education programs will miss a major opportunity to upgrade the relationship. 
  • Play an active role in helping clients streamline their legal operations. 
  • Use client feedback to learn what tools clients have, what they want, and then give them more. 
  • Always be in an informal discussion with your client. Informal discussion provides the context for the formal requests— giving you knowledge no one else has, and you will learn about new needs before anyone else, too.
  • Offer to perform the work you know is coming down the pike—don’t wait for it.
  • Stick it out. Client growth is anything but linear. It will take more time to develop than you expect—and will then grow faster than you expect.

Clients have never been more serious about using their law firms in a more clever way. The market is still ripe for firms to execute this low-risk/high-return strategy, but success demands commitment, training, tools, and embracing the art and science of pulling all the pieces together to make it sing. Latham serves as highly visible proof of this concept. What more evidence do you need? 

BTI has helped some of the most successful firms in the world develop client growth plans. We would be happy to answer questions or discuss your approach.      

MBR/JPD

(Based on BTI research conducted on a rolling basis between February 2017 and December 2017. BTI conducted more than 350 independent, individual interviews with CLOs and General Counsel at Fortune 1000 companies and large organizations)

Forget AI, Fred Flintstone Has a Big BD Lesson for Law Firms

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Fred Flintstone lived in a time when the concept of modern counting for tallying and tracking was coming into widespread use. As Big Data and AI try to muscle their way into law firms—you can still rely on a few Stone Age tools to reliably develop business and keep more clients.

Counting clients and their billings annually is a simple, important, and woefully underutilized business development tool, especially this time of year. Go count how many top clients you have this year—and compare this list to last year—name by name, billings to billings. Perform this analysis on your top 50 to 200 clients. If you’re brave, perform this analysis for each of the last 3 to 5 years—where some of our clients found a gold mine of new work.

Any top client who shrank to become a regular client deserves immediate attention, as does any client where billings shrank at all. It doesn’t matter how much they shrank—nothing good ever comes from shrinking fees.

Immediately investigate and learn exactly why these clients dropped down the list. Don’t be fooled by the premise of “one and done” or “the case ended.” There is always a reason. Clients have ongoing needs and ongoing spending—and they keep using law firms on a regular basis. This just-lost source of business is fertile ground for client and business development. Client feedback is invaluable with these clients.

This client retention and measurement calculation is your roadmap for landing new business right now. Go and develop clients where your relationships are still warm. Your clients just may be wondering why no one from your firm ever followed up after the last engagement.

BTI research shows only 48% of law firms calculated any kind of client retention rate in 2017, up from 40% 3 years ago. The typical law firm calculating its top client retention rate kept 85% of their clients on a year-over-year basis, up from 80% 4 years ago. The increased retention alone can be worth $30 million dollars in new revenue at an Am Law 200 firm—and the same proportionate gain applies to smaller firms.

For my money, I would stop or postpone another project and calculate my firm’s client retention rate for the top 50 clients, at least. I would look at 3 factors:

  • Changes in billings, year over year
  • Rank in the top 50, year over year
  • 3-year compound growth rate in billings

The numbers will tell the rest of the story. And define your path.

All you need to do is reinvigorate 1 major client and even the most skeptical partners will be inclined to shout: “Yabba dabba doo!”

MBR

(This research is based on interviews with more than 180 law firm marketing leaders conducted over the last 12 months.)

Shoddy Law Firm Work Doubles

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Shoddy work is driving clients crazy. And, it is driving twice as many clients crazy—in fact, 22% in 2017, up from 11% the previous year. 

Most of this sub-par work is unintentional. Certain law firms don’t even know they are missing the mark. What’s worse—clients simply let these firms fade away never to be hired again. Few law firms ask for client feedback, so they never learn what they’re doing wrong (or right). The decline of quality work is reflected in clients’ growing impatience and in their redefinition of quality. Here’s how it happens: 

Missing the Mark

Certain law firms didn’t do what clients asked. These firms often believe they did, but their clients think otherwise. Clients say these firms racked up a lot of hours, and more importantly, precious time passed before clients figured it out. 

The law firms believed in their heart they knew what the client wanted. But these firms did not confirm their strategy, work plan, and overall approach. They did not confirm the scope. They may have provided a budget—but figured they could blow through it if needed. And off they went, with the best of intentions, delivering shoddy work because the client couldn’t use it.  

Other firms believed their client’s goal was unrealistic. Acting in what they believed to be their client’s interest, they changed course. These self-correcting firms added people and tasks to do the right thing. They worked into the night making sure no deadline was missed. And a few developed irrefutable research to back their positions. The only missing element was the most important one: sharing any of this with their client—who was ultimately stunned by the invoice and the strategy—and not getting what they want. Maybe their client’s goal was unrealistic, but the responsibility lies with law firms to tell their clients why—on a timely basis. 

These miscommunications are the biggest reason even the best technical legal work turns shoddy in the eyes of clients. 

I Know Something You Don’t

Silence during ongoing work has graduated from annoying to shoddy. Silence undermines confidence and can make clients look bad. Corporate counsel expect to be advised and updated on a regular, systematic basis, and when needed for unique events. Anything less is low quality and signals clients are not front and center. Or worse—no one person is looking out for the client. 

Final Invoices

Top legal officers believe the budget is a proxy for strategy and risk management. Clients know budgets change—but they don’t change at the end of a matter—changes can be seen and managed. Clients have concluded an over-budget final invoice represents their firm’s lack of planning and the use of an ad hoc approach to their work. No management means no quality. 

Clients still talk of faulty research, incorrect citations, and mistakes in fact showing up in their documents. These are relatively rare in comparison and not something clients worry about and look for; and somehow, they don’t drive clients crazy. Maybe because they don’t leave the legal department and are easily fixed.

Clients have neither the budget nor time to deal with issues they believe should never have come about in the first place. The main safeguard against shoddy work: over-communicate with your clients. Always tell and retell clients what you are doing and why. And tell them once more, to play it safe. As one top legal officer put it, “Communicate until it hurts.”

MBR

(Based on BTI research conducted on a rolling basis between February 2017 and December 2017. BTI conducted more than 350 independent, individual interviews with CLOs and General Counsel at Fortune 1000 companies and large organizations)

11 Trends Reshaping Law Firm Marketing and BD

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Law firm CMOs are pushing change forward. Go-to-market strategies are starting to diverge. Law firm focus on client development is becoming more widespread. Twice as many CMOs think social media is overrated—as opposed to underrated—while the majority of CMOs are starting to use more targeted marketing tactics in attracting clients and new work. And, this is the tip of the iceberg.

Clear and Unmitigated Changes in Law Firm Marketing

BTI just finished analyzing the results of our 10th survey of law firm marketing leaders. We found clear and unmitigated changes in strategy, approach, views on the market, and strategic thinking which help define law firm marketing and business development moving forward. 11 findings immediately stand out:

  1. Dedicated salespeople return to the law firm marketing scene at 11% of law firms, up from a handful of firms 5 years ago.

    Only a small number of law firms have the balance of culture, temperament, respect and trust for BD and compensation systems, as well as support systems, to make this successful. A dedicated salesperson can be a powerful tool, but it rarely works unless the bulk of these elements are already in place when your dedicated salesperson arrives. We expect only a small number of firms will be successful—but, the successful firms will have great results.
     
  2. The biggest 30 law firms continue to increase the budget behind client development activities. Client development is now 37% of the marketing budget, up from 34% in 2016.

    The law firms under the most pressure to grow are budgeting to protect their client base. Their budgets are in the right place. This has 2 big implications:

    —  It makes it more difficult for every other law firm who wants business from these clients, and

    —  Success demands the right tactics and strategies to back these budgets—money alone does not win clients

  3. 59% of law firms see broad market outreach as the most overrated marketing strategy. CMOs see themselves getting diminishing returns from casting wide nets to catch new clients. Now they are trying to convince their firms the best strategy is to narrowcast to land the best clients.
     
  4. 9% of law firms are betting big on social media and making it the centerpiece of their go-to-market strategy.

    The law firm social media world has many players but only these 9% say they are in it to win big business. These firms have highly developed themes for their social media activity along with a well thought out ecosystem to support it.
     
  5. 20% of law firms see social media as overrated. They expect little from social media. These firms also have minimal, episodic, and sporadic presence in this world.
     
  6. CMOs no longer see themselves as resource constrained, as only 9% say it is an obstacle to growth. This is down from 23% in 2016.

    While every CMO wants more resources, they no longer see the lack of resources as being an obstacle to growth. 90% of law firms have crossed a strategic threshold where growth is determined by the ability to keep current clients and get new ones faster than everyone else.
     
  7. 19% of CMOs see no obstacle to their firm’s growth in 2017, up from a mere 3% in 2016.  Strategic confidence grows dramatically. These CMOs believe in their strategies and ability to execute. Most of these CMOs had a hand in developing their firm’s strategy. Again, like the trend in 6, this signals the crossing of the strategic threshold where strategy rules.
     
  8. The number of law firms reorganizing themselves increased by a factor of 6 to 17% from 2.3% in 2016. With the resources they need in place, CMOs are changing their organizations to better support the firms and partners to drive growth. We see move to organize around industries, partners, clients, regions and firmwide—including combinations of the above.
     
  9. Virtually every law firm is spending less on seminars and events than they were 3 years ago. This serves as another piece of evidence law firms are moving to more targeted marketing.
     
  10. Only 16% of CMOs see Artificial Intelligence (AI) driving increased business. Another 25% expect AI will make MBD more productive. 21% don’t know what the impact of AI will be.

    We expect AI will eventually help CMOs develop highly personalized proposals and pitches with much less effort. AI will bring industry and product/service information—attorneys will have to supply the non-legal interactions to be able to use AI to develop the right tone and voice. And, a partner will still have to sell it.
     
  11. The typical CMO needs 2 years to learn how to work with the partners when joining a new firm. Swapping out CMOs is expensive. More than half of all law firm CMOs are not fully satisfied or engaged. We recommend law firms take a deep look at how they can engage their CMOs more—if not to make your CMO happier, then to save the precious 2 years it takes to bring a new one into the fold.  

All these changes add up to opportunity for law firms and CMOs. As law firms develop more focused approaches to the market, marketing and business development are the tools of choice.

There has not been a better time to make a law firm marketing leader’s voice heard. Those who are heard may just become more engaged and want to stay put—and become a permanent part of the 45% of CMOs who are loving what they do. And, will be poised to gain new business and clients at competitor expense.  

MBR

(This research is based on interviews with more than 180 law firm marketing leaders conducted over the last 12 months.)

The Ideal Client Mix

Looking at your client relationships along the dimensions of Client Attractiveness and Money allows you to easily see which clients create better opportunities and have a stronger financial impact.

Jennifer Dezso, BTI Principal, walks you through the steps you can take to assess and create your ideal mix of clients.

You can view the video by clicking the image below, or on YouTube directly here: https://youtu.be/cA9tknQ5WD4

With this series we’ll be taking an in-depth look at a wide range of client relationship best practices. We’ll be releasing Client Relationship Lab webisodes on our blog every month—subscribe today (in the box at the upper right of your screen) and be sure you don't miss a single one.

What Law Firm CMOs Love and Hate about Their Jobs

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Law firm CMOs are basically split—45% are happy and fully engaged. This leaves more than half who are not.

At 35%—the biggest segment of CMOs rate their jobs an 8 of 10. It’s good, they like it—but does not cross the line into thrilled, awesome, or fully engaged.

Another 20% put their job satisfaction at 7 of 10 or lower. This is the level where frustration breaks through. These CMOs may enjoy some aspects of their job—but the balance between happiness and frustration is out of whack. These CMOs are on the prowl for a new job.

CMOs from both halves of the spectrum shared what makes them so happy—or not.

Why CMOs Love Their Job

  1. Making a strategic impact
  2. Watching partners gain BD skills
  3. Improving client service
  4. Freedom to make decisions
  5. Engaging attorneys
  6. Feeling valued
  7. Intellectual challenge
  8. Strategic challenge
  9. Serving as voice of the client

Why CMOs Hate Their Job

  1. No respect for marketing and business development
  2. No voice
  3. Firm’s internal focus
  4. Perfunctory work
  5. Can’t engage attorneys
  6. Stress
  7. Workload

 

     
     

    How to Move Up the Happiness Scale

    Find your friends. Virtually every law firm has partners who value marketing and business development somewhere. Find these partners. Focus your energy on helping these individuals. You will feel valued almost immediately once you help someone. Once you help one attorney it becomes contagious. Others will seek you out.

    Think small victories. You are in a war which you can win by fighting battles. Think about all the choices in front of you—where can you create a win? No matter how small, victories help your firm and you. And, one victory begets another. Any victory can change your own world view.

    Don’t take it personally. The barriers and situations you face were there before you arrived. Separate out marketing and business development from yourself—most firms react to the function—not you.

    Speak your voice—and be prepared to speak it many times. You know your marketing and business development ideas cold—like no one else ever could. And they don’t. Each discussion you have is an opportunity to illustrate how you, and your skills, can help attorneys develop and win more business. If the message doesn’t resonate—find the partners where it does.

    Speak your voice again. Share your best ideas. Not all your ideas—but your best ideas. Find someone on your staff or a friendly partner to brainstorm with to get counsel on which ideas will have the most impact. And be prepared for the long selling cycle accompanying any new idea.

    Stop banging your head against a wall. Some CMOs just don’t click at some firms. If you can’t get anyone’s attention and get things to work—move on. You and the firm will be better off.

    Don’t Let Me Be Misunderstood

    CMOs are one of the least understood members of the law firm management team. Success demands you market yourself within your firm.

    Happy CMOs spend substantial time thinking about how they can make their voice heard and make the benefits they offer in their voice. It’s intuitive to many. They find, focus on, and fight for victories where they can make an impact. They engage with attorneys whenever possible and start with the partners who see value in MBD. They know their happiness, and success, lies in their ability to make things happen—and like all else in marketing—your clients (the firm) has to see the compelling value.

    MBR

    (This research is based on interviews with more than 180 law firm marketing leaders conducted over the last 12 months.)

    Only 4 Years Until AI Hits Big Time

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    Review your plans, make your decisions, and mark your calendars.

    Clients have a schedule for when the future will arrive. Top legal decision makers see AI making an impact in 3.96 years. The outlook for how law firms develop and implement AI may be up in the air – but client thinking is pretty clear.

    Strategic Decision Support Expected Even Sooner

    Only 20% of corporate counsel expect to be using AI to help with decision making. They have high hopes – expecting AI to actually impact strategy and decision making in only 2.8 years.

    These executives are looking for the data and insight to drive better outcomes, generate more effective strategies, and define the shortest path to reaching their goals. Virtually every one of them expects their law firms to bring this insight – believing their firms will possess both the data and knowledge. The very largest of companies are thinking of investing in systems directly but still plan to look to their law firms for strategic input.

    Efficiency: Big Gains Anticipated within 4 Years

    BTI research shows another 57% of clients expect AI’s impact on efficiency to arrive in just over 4 years – exhibiting considerably more patience than their peers looking for decision support. Initially, they anticipate gains on efficiency ranging from 25% to 33%. This translates directly into fewer billable hours and shorter time frames to deliver the equivalent work.

    Client Expectations Are Everything  

    Client expectations are as important, if not more so, than the actual result. Your AI success depends not only on your AI prowess but also on managing client expectations. We recommend:

    • Asking clients about their goals, expectations, expected benefits, and time frames.
    • Bringing clients into your plans. Share your approach, goals, and timetable – and ask for comments.
    • Sharing your client-facing technology roadmap – technology companies routinely talk to their clients about their roadmaps. Clients want to know where you are going before they invest in your approach – psychologically or financially.
    • Creating a technology advisory group made up of your largest and thought-leading clients. Bringing this group together will yield much more than insights into your AI strategy.
    • Keeping the dialogue going. Clients have high expectations, and your ability to lead the dialogue proves you can lead the path to AI.  

    One of the major unspoken AI-related risks is the ability to meet and exceed client expectations. Firms who aren’t talking to their clients about what they expect, what to expect, when – and what they will get – may find their AI efforts not impactful at all.

    Engage now. AI’s time is closer than you think – at least according to clients. 

    MBR

    And the Winner of Best Strategy Is...

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    Law firms love to measure the growth. Not so much for market share.

    Market share gains or losses tell you how much business and the extent of clients you gained or lost versus other firms. You can add a whole new dimension to your strategic performance by looking at profits at the same time. Profits tell you how much capital you have available to invest—in talent, technology, clients, and other key areas. The firms who gain more clients and generate more profits than anyone else on a regular and sustained basis have a clear advantage.

    Even though the legal market is growing again, success still demands law firms steal clients in order to create the kind of growth which attracts talent, creates opportunity, and draws clients to your firm.

    Only a small number law firms—12%—register big gains with big profits on a continuing basis. Another 14% are investing to earn these big gains and profits. 40% are losing share with lower-than-average profits. The rest are somewhere in between.

    Stealing Clients and Making More Money than Anyone Else

    12% of law firms are not just growing—they are taking clients and market share. These Pacesetters are generating superior profits—4 to 6 times better than everyone else. Everyone can learn a thing or 2 from these firms—no matter who you are.

    The Pacesetters are using client-centric strategies. They are focusing on growing their existing clients and investing in only a few selected markets, practices, and clients—all with discipline and strategic patience. They are top client service performers—but that’s not enough—Pacesetters are committed to getting even better at client service. Pacesetters know exactly who their clients are and what they want. Better strategy, adding more clients than everyone else, and making more money while doing it—this is the business trifecta.

    To learn who these firms are and more about their strategies, join us for today’s webinar: The BTI Market Outlook and Client Service Review 2018, at Noon Eastern (Click here to register).

    Losing More Clients and Making Less Money

    40% of law firms are giving up clients and share. These firms are shrinking or eking out minimal growth. Either way—they are giving up business and clients to competitors. These firms are the Followers. Follower strategies are the opposite of the Pacesetters. These strategies focus on the firm before markets, they market to broad groups of practices equally, and cast a wide net for clients—all of which make it harder to connect with clients or grow your market share.

    Investing for the Biggest Gains

    14% of law firms, the Investors, are making big investments to drive growth and market share gains. These firms are investing in client-facing programs, industry teams, client feedback and provocative content, and are reaching out to clients. They have one goal—become a Pacesetter. They are spending profits now for bigger clients, new clients, and bigger profits to come.

    Harvesting the Gold

    The Gold Miners enjoy outstanding profits but are slowly losing clients and share. These firms, some of whom have mega prestige brands, are losing clients—especially to the Pacesetters—who are much more aggressive in seeking out and cultivating prime clients. Gold Miners have some of the best clients, but they largely position themselves as destination firms clients will seek out. But other firms are starting conversations with these clients when the need arises—slowly taking business. The Gold Miners will sense this loss of clients at some point—driving a pivot to a client‑centric strategy or merger.

    As we will discuss in our webinar at Noon EST today—the Pacesetters have increased their gains while firms losing share are losing more at a faster pace over the last 10 years. The Gold Miners are making more money but losing more clients. The gap between the Pacesetters and everyone else is growing daily.

    The legal market has entered the 4th distinct phase of growth since the financial crisis. At this point, the most successful strategies place clients at the epicenter of their world, and build out from there. The more the market changes the more one thing remains the same—clients and the client experience drive short- and long-term success.

    MBR

    How Clients Hire: Top Clients Impose Law Firm Hiring Moratorium

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    A group of forward-looking top legal decision makers have stopped hiring new law firms.

    “I am tired of spending my time listening to the same old story. They all say the same things. There is no point. It isn’t like I don’t know what I am going to get. I’ll work with the firms I have,” explains an SVP of a large financial services company. If your firm hasn’t done any work for these clients in the recent past, you don’t exist.

    While representing no more than 15% of clients—they control more than 30% of US legal spending.* Their plan: Drive the law firms with whom they want to work into better performance. These clients plan to:

    • Initiate discussions about legal strategy for key matters
    • Ask for options before getting too deep into a matter
    • Convince law firms to adopt tools to get things done with budget predictability
    • Keep their law firms advised of their plans to help them be prepared for what’s coming
    • Give feedback—regularly. Clients plan to point out inconsistencies in service and delivery and tell you exactly where and how to improve—mostly in process and communication

    Your client is unlikely to announce this new change. And, they will only engage with a few of their firms. Clients don’t have the time or energy to drive change at all their law firms. Only a few firms will emerge stronger and larger as the decision makers gravitate to the top performers and those who embrace their changes.

    You can pick up on the clues quickly through well designed client feedback. The non-feedback firms will have to pay close attention to every client request and communication to be able to try to figure out what clients want.

    The only safe bet to be one of the chosen few is to behave as though your large client is going to develop a better and bigger relationship with you—and YOU initiate the feedback process. We recommend starting with fresh and broad feedback from everyone with whom you work at your large clients. This means many interviews at a single large client (our record at BTI is 39 individuals at a single client, so far).

    Analyze the feedback and share the results with attorneys serving your client. Then—be daring—share the major findings with your clients along with suggestions for how you plan to improve. Ask your clients for their suggestions. Then—change.

    If you need help developing the questions, tools to analyze the insight, or recommendations, please feel free to reach me at mrynowecer@bticonsulting.com.

    At the same time, treat any requests to attend client meetings about operations, upcoming plans, and almost any other topic as a juicy invitation to be briefed on how to get more business.

    MBR

    PS. Don't miss out on our upcoming Market Outlook and Client Service Review webinar on January 18 at Noon Eastern. You can learn more or register here.

    *Based on BTI research conducted on a rolling basis between February 2017 and December 2017. BTI conducted more than 350 independent, individual interviews with CLOs and General Counsel at Fortune 1000 companies and large organizations.

    Aggressively Growing Your Highest Quality Clients

    In this month's Client Relationship Lab, BTI Principal Jennifer Dezso shows you how to make sure you're aggressively growing and protecting your business with your highest quality clients. This client development plan is a tool to help you zero in on the clients who make the most sense for you to pursue, as well as a strategy for building your book of business with these clients.

    You can view the video by clicking the image below, or on YouTube directly here: https://youtu.be/uLLqweEHHPc

    With this series we’ll be taking an in-depth look at a wide range of client relationship best practices. We’ll be releasing Client Relationship Lab webisodes on our blog every month—subscribe today (in the box at the upper right of your screen) and be sure you don't miss a single one.

    Superstitions and Customs to Guide or Haunt Your New Year

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    A certain rock star litigator will wear 1 of only 2 ties when delivering closing arguments. He may add a new tie to this elite collection, but, only if he has success in less serious matters enough times for it to earn its keep as a good-luck tie.

    A top rainmaker confesses she always wears her good-luck pin when visiting clients. And she always leaves with work or a lead.

    A lead M&A partner always wears purple somewhere in his clothing when he goes to visit clients to brainstorm and talk about possible new deals—he says it brings luck and is associated with creativity.

    You get the idea—many successful people have their own superstitions and beliefs. People find big and small contributors to their success in many places—some more mainstream than others. Here are a few contributors for 2018:

    A Year for Good Relationships

    Astrologers and numerology suggest 2018 creates the right environment to make relationships function well. This includes cooperation, pulling together as a team, and the increased use of intuition. Contrast this with 2017, which was a year of self-sufficiency.

    The Timing Is Perfect

    The timing for a year of better relationships is perfect. Clients are about to send $3 Billion to outside counsel in 2018 while also reporting inconsistency in their law firms’ delivery—creating an opening for new law firms to strike and showcase their consistency. While every law firm can benefit from diving into client feedback, client teams, and firmwide client service programs to drive change—you’re better off starting while the universe is behind you.  

    Superstitions and beliefs are only weird if they don’t work.

    Wishing you the best of relationships in 2018.

    MBR

    PS. Don't miss out on our upcoming Market Outlook and Client Service Review webinar on January 18 at Noon Eastern. You can learn more or register here.