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.)

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.)