Attorneys Pose Biggest Obstacle to Law Firm Growth

“We have met the enemy and he is us.”
POGO, April 20, 1970
Walt Kelly, Creator and Author

Market forces pale in comparison to attorneys as the biggest obstacle to growth at law firms. Law firm marketing leaders believe no-growth markets and ever more demanding clients have less impact than attorney resistance.

25.2% of CMOs and law firm marketing leaders name their lawyers as holding their firm back during more than 150 far-reaching interviews BTI conducted with them. This is up from 18.6% in 2014. We are in the 9th year of no growth. The pressure to develop business grows as the market becomes tougher. The attorneys who resist are fighting an increasingly uphill battle and it is the firm’s responsibility to provide the tools and training to overcome the resistance.

Much of the resistance comes from attorneys having limited to no business development experience. They are concerned about how to initiate the process, questions they might be asked, and not knowing how the process is likely to unfold if they do reach out to clients. In addition, the resisters don’t realize delivering superior client service is a potent form of business development.

The only proven tactic to remove the attorneys as obstacles to growth is to train them. We recommend training in 3 tiers:

Tier 1 – Advanced Business Development Skills for only the high-potential business developers. This training focuses on the art and science of developing large chunks of business and developing new clients.

Tier 2 – Core Business Development for the attorneys who show an inclination or interest in business development. This training introduces the tools and practicalities of developing business—including mock client meetings for conducting initial meetings and how to follow up.

Tier 3 – Client Service Training teaches all client-facing partners the skills and provides the tools to deliver superior client service—with the understanding superior client service is a potent form of business development. There are few partners who would not benefit from this training.

Your use of staggering the training by skill and inclination enables you to drive success with the attorneys most likely to be successful. It also changes the culture of the firm as the leadership illustrates how they invest in business development. Finally, the tiered approach to business development training creates incentive to become good enough to reach the most advanced training—creating a clear path to rainmaker and creating more rainmakers in the process.

The Silver Lining

We are the enemy and we are the solution. Every law firm has the power to change and overcome the obstacles in their way. And no one understands the problem better than the firms themselves. Now, every law firm can overcome these obstacles. 

MBR

The Most Recommended Law Firms

Last week we shared why only 33.3% of corporate counsel recommend their primary law firm to a peer—a task they do not take lightly. Recommendations are personal statements about the recommender as much as they are about a law firm’s client service, quality and commitment.

With clients always expecting more, law firms often have to work double time to earn the coveted recommendation given by one corporate counsel to another. Only 25 firms earn an unprompted recommendation 5 years in a row. You can see all 96 firms earning multi-year recommendations in our newest report: BTI Most Recommended Law Firms 2015. View the report below or download the complimentary report here.

 

 

The 9 Roads to Premium Rates

Brand isn’t about one thing. Your brand is about everything you do. Every action, interaction, the technology your firm uses, the client service your firm provides, or the value a client believes they get from using your firm—these all contribute to the imprint in a client’s mind; an impression which drives hiring decisions—and the rates clients think you are worth.

Strong brands influence client loyalty, hiring, and rates—especially, premium rates. BTI assessed which activities were most important to legal decision makers’ when:

  • Making hiring decisions—both consideration and ultimate hiring of law firms
  • Bestowing law firm recommendations to peers
  • Awarding premium-rate work

Subtle changes in law firm behavior greatly affect how legal decision makers perceive the firm’s overall brand. This year’s in-depth research uncovered 9 significant changes, all of which impact hiring and pricing for every law firm. These are:

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Clients Short Lists Get a Little Longer

Clients’ lists of go-to law firms just got a little longer. This means more law firms will have to fight harder to even be considered for hire for a new matter. As the number of top recommend firms shrinks corporate counsel are considering at least a few new firms to hire. One more sign of the marketing value of developing and investing in relationships as clients consider a longer list of competitors. 

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A Few More Law Firms Make Changes to Boost Client Service

More law firms are making changes to improve client service—37 more out of the 650 serving larger clients.  

This small but strategic sliver of law firms are changing their business approach and processes to improve client service. Corporate counsel’s smaller law firm rosters are forcing law firms to reconsider their client-facing activities. With client short lists getting longer, clients are demanding the absolute best service and experiences from their law firms. To their credit, some law firms are responding (the other option is letting the work go to someone else willing to respond).  

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Downtick in Client-Recommended Law Firms

Those in the vanguard of recommendations have declined, down 12.6%. Client expectations are soaring as corporate counsel push for more change and more business value from their law firms. However, the response from law firms has left corporate counsel reluctant to unequivocally recommend a firm to their peers. The silver lining: the firms earning these increasingly rare recommendations are among the best positioned to win new work.

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Fewer Law Firms Making Changes to Deliver More Value

Streamlining and making corporate counsel's lives easier translates into better value.

Unfortunately, clients report a 5% drop in the number of law firms adding value to the client experience. This may be the first sign of legal project management becoming more mainstream. Clients are thinking beyond project tools towards changes in work streams and work processes. The decline in the number of firms recognized for these changes can also be an early indicator of clients increasing their expectations for change at a rate faster than law firms can implement.

Fewer firms delivering this attribute means the law firms making these changes have found a source of potent advantage.

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Clients Rearrange Bet-the-Company Law Firm Rosters

48 law firms enjoy new nods from corporate counsel for their ability to handle bet-the-company work.

Corporate counsel have consolidated their law firm rosters to a select number of firms demonstrating the absolute best understanding of their business and needs. These firms earn the client’s trust and are in position to showcase their unmatched client understanding to handle high-stakes, bet-the-company work. 

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More Law Firms Seen as Long-Term Market Leaders by Clients

The end may not be upon us after all. 90 law firms are earning recognition as best bets to be long-term survivors—an astonishing uptick of 45% from 2014. 

In what can only be a sign of confidence and optimism, corporate counsel recognize substantially more law firms as successfully navigating market shifts to emerge as long-term leaders. This means law firms are doing a better job executing on their strategic plans—as clients are the people who experience implementation most. This rise in potential market leaders has a strong impact on hiring for large and potentially long-term assignments, i.e., big‑ticket litigation. No corporate counsel wants to even consider a law firm for long-term work if they sense their firm will not be a strong player in the future.

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Clients Note More Tech Savvy Law Firms in 2015

Clients see more tech savvy law firms emerge as corporate counsel identify 9% more law firms using technology as a source of innovation in 2015.

Corporate counsel register an increase in the number of firms using technology to the client’s advantage, as law firms are being more aggressive in their use of client-facing technology. 

Improved use of technology offers clients the sense of a streamlined experience and improved value, which make the client’s life easier. Clients will only give law firms credit for utilizing new technology when the technology improves the client experience.

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Fewer Law Firms Are Premium Rate Worthy: Premium Rate Firms Declined 16%

The premium rate club is declining, with 16% fewer law firms identified as worth the highest of the high rates a client pays. One major factor is the decline of high-rate bet-the-company work. Clients also are using a smaller law firm roster than prior years. This combination of factors results in more intense competition for the highest octane work. Legal decision makers are demanding the absolute best service and results from their law firms—and fewer firms have met the challenge.

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Clients See More Innovative Law Firms in 2015

More innovation and more innovators.

119 law firms are moving and shaking the legal industry. This translates into roughly 10% more firms (than 2014) earning corporate counsel recognition for engaging in new and different behaviors which other law firms don’t. These new behaviors deliver value and, most importantly, show clients you bring new and different ideas to their legal and business problems. Innovation is one of those rare attributes which attracts new business. Clients will seek you out if they think they can get a new take on old ideas—or just what is perceived to be a better approach.

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Top Law Firm Brands as Ranked by Clients—The BTI Brand Elite 26

Brand drives hiring decisions and access to premium rates. With less than half the market able to identify a single differentiating characteristic of top law firms, it’s no wonder rate pressure and competition are rampant.

Your brand can vault you to the short list of legal providers or land you in the discard pile.

Just 9 factors are proven to break through the noise and elevate a firm’s brand and positioning with legal decision makers. While many law firms can deliver on 1 or 2 of these elements, the BTI Brand Elite 26 are the law firms excelling in nearly all of the 9 factors.

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Clients Rank Law Firms—Skadden Tops BTI Client Service 30

Skadden reigns supreme in client service. 

Each year, The BTI Consulting Group speaks with more than 300 leading corporate counsel and asks them which firms are leading the way when it comes to delivering superior client service—an area law firms aren’t always known for mastering. This year, unexpected leaders prove they’re here to stay and the Davids and Goliaths of the legal world continue their ongoing battle for client service excellence.

1. Skadden
According to corporate counsel, Skadden is the undisputed leader in delivering the absolute best client service this year. Skadden is committed to putting clients first. A deliberate shift 5 years ago to a client-facing strategy is paying off for the firm. Clients report a number of new initiatives and noticeable changes from the firm, including: more attention from senior-level partners and having in-depth discussions around business (not legal) strategy and impact.

2. Jones Day

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Law Firms Build Serious Marketing and Biz Dev Muscle

Lip service is over. Law firms are building marketing and business development muscle to drive market gains—and partners show their support by voting with their wallets.

Law firms steadily boosted their investment in marketing and business development since 2010. Budgets at the 100 largest firms experienced a compound annual growth rate (CAGR) of 6.4% (translating into nearly $3 million, per firm)—closely rivaled by gains of 5.8%, or $1.3 million, in marketing and business development at a typical firm in the second 100 (101-200) firms.

Where are savvy law firms putting their money? The enormous pressure to drive growth, boost client retention and outpace competitors drives dollars away from generalized initiatives like generic events, PR and traditional advertising. The largest growth in 2013 marketing spending was in targeted business development outreaches:

  • The largest 100 firms nearly doubled their spending on client and market research—indicating a focused approach to identifying, and meeting, client and market needs
  • The second 100 largest firms see the greatest boost in business development investments—growing this budget area by nearly 10%
  • Firms outside the 200 largest are directing more dollars to training initiatives—ensuring partners are prepared to turn every opportunity into business and better client service

Money is likely to continue to flow in this direction as partners link client retention, financial gains and new business to these targeted marketing and business development tactics. 

MBR / JPD

Learn how to build your marketing muscle & more on Jan 16 at BTI's Market Outlook & Client Service Review Webinar.