LegalBizDev

The latest post from Jim Hassett’s blog Legal Business Development.


Business development best practices: Don’t stop

Selling is a numbers game.

New life insurance agents are sometimes taught the “100/10/3 formula:” You must approach one hundred people to get 10 appointments and three customers. The exact numbers will be different for lawyers, but in any kind of selling you must approach a large number of prospects in order to get a small number of sales.

In his book 101 Marketing Strategies for Accounting, Law, Consulting, and Professional Services Firms, Troy Waugh (p. 227) talks about the need to “succeed by failing more:”

All advertising, public relations and direct mail programs have failure rates (non-response) that exceed 95%. But the one to five percent success can create excellent leads and pay for all your efforts.

Fortunately, the numbers are not quite this high for most professional service firms. At McKinsey & Company, one of the most successful consulting firms in the world, every director in the firm is responsible for marketing, using the “2/4/8 rule:” constantly work on two assignments, four proposals, and eight new prospects. McKinsey does not have an internal marketing department, because they recognize that all senior staff are responsible for marketing.

It can take significant time to build relationships with all these people, and the best way to build relationships is with face-to-face meetings. When Don Schrello analyzed data from McGraw-Hill, Cahners, and other sources regarding face-to-face selling for both goods and services, he found that over eighty percent of the time, sales professionals require at least five face-to-face meetings to close a sale.

In the SPIN® Selling Fieldbook (p. 42), Neil Rackham’s data on major account sales are even more daunting: “Fewer than 10% of calls actually result in a [decision of] an Order or No Sale.”

Add all these facts together, and it becomes clear that finding new clients takes an enormous amount of persistence, and the ability to shrug off rejection, week after week. As Mike Bosworth put it in Solution Selling (p. 83), “Sales always has been and always will be a numbers game—no matter how good you become, not everyone will buy from you.”

The fact that you will be dealing with large numbers means that you will need to be organized and systematic in managing your interactions with all these prospects.

According to Jim Cathcart in the book Relationship Selling (p. 100), “The way to recognize a true sales professional is to look at what he or she does after the sale.”

In every industry, it is far more expensive to win business from a new client than from an old one. Even if there’s no more money for you in this year’s budget, next year’s budget is just 12 months away or less.

Think about what you might do to stay top of mind with each client, from newsletters to personal updates.

Cathcart suggests keeping in touch with everything from clipped magazine articles to handwritten notes, and a regular account review to uncover both satisfaction and dissatisfaction. Publicize the positive, and fix the negative.

And when you lose a sale, keep in touch with those people too. If you find ways to help people, they will remember you, they will come back to you, they will tell their friends, and sooner or later some of them will buy.

The key to long-term selling is “don’t stop.” Look past today’s victories and losses, and focus on building relationships that will be the foundation of your long-term success.

And on the inevitable days when progress feels slow, give yourself a pep talk about the fact that sales is a numbers game. If you knock on enough doors saying the right thing, your share will open.

As Calvin Coolidge famously summed it up:

Nothing in the world can take the place of persistence.
Talent will not; nothing is more common than unsuccessful men with talent.
Genius will not; unrewarded genius is almost a proverb.
Education will not; the world is full of educated derelicts.
Persistence and determination are omnipotent.
The slogan “press on” has solved and always will solve the problems of the human race.

This post was adapted from my book the Legal Business Development Quick Reference Guide.

      


The heart of LPM: Communication, Part 2 of 2

A guest post by Ed Burke

 

5.  Communications is a process not an art.

Unlike what many people think, communications is more of a process than an art. (The real art in communications is in forming the right questions and in the “active listening” discussed in Part 1). Like most things not directly related to the legal matter, communications is likely to get lost in the chaos. That’s why our Legal Project Management Quick Reference Guide includes so many process aids.

It may seem mechanistic, but mechanization is the soul of project management; what makes it successful. It’s not unlike those checklists that hospitals have imposed, which physicians thought were dopey and demeaning until they saw how many deaths, diseases, and injuries they eliminated. If someone who’s qualified to open your skull and root around in your brain for a few hours can benefit from a checklist, perhaps you can too.

One aid is a “RACI matrix,” a simple chart that will increase efficiency and communications by clarifying the roles of team members in completing tasks and deliverables. It establishes the level of communications they should receive. RACI is an acronym for who’s Responsible, who’s Accountable, who should be Consulted, and who should simply be Informed. It’s a simple chart with the names of members of your team listed across the top, and the tasks listed vertically on the side. An R, A, C, or I is assigned wherever the task and a name intersect.

Another aid is a communication plan. It’s another simple chart, with the following listed across the top: the task; who’s responsible for communications concerning it; to whom the communications concerning that task be directed as well as how often or when; and how (in person, by email, etc.).

 

6.  The critical points of communications

To some lawyers, the perfect communications plan consists of taking the order and reporting back with a good result. But it’s not that simple. For one thing, just “taking the order” requires communications back and forth, perhaps a number of times, if you’re going to understand what the client wants and if you’re going to give him or her an accurate idea of how long it will take and of the cost.

The best communications plan unfurls throughout the life of the matter. But it’s particularly critical to communicate at three key points. The first, as indicated above, is when there’s bad news. The other two points ironically don’t occur during the matter, but before it starts and after it ends.

The seeds of many, if not most, problems that occur over the life of a matter are sown before it even begins, when the scope is being discussed. The client may have already been living with this problem for months and wants to offload it as quickly as possible and move on to the next problem. S/he may not be happy spending a lot of time answering the dozens of questions you’ll have – some of them, perhaps, uncomfortable for the client – after just parachuting in. 

For your part, you’re loath to risk a bad start, or even a loss of this windfall, by quoting a time frame or cost that, whether or not it’s realistic and informed, is likely to jar the client. So the tough questions are swept under the rug on the theory that, when you bring in a good result, all will be righted.  

If you’re in the business of building relationships rather than just taking orders and billing time, Square One is where a relationship of mutual trust is established or strengthened.  You’ve got to take the time up front to find out what the client wants by asking a raft of questions. Some are obvious and others might not naturally occur to you. 

For example, just in setting the scope of the matter, questions abound, such as:

  • What business issue does the client want to address in the legal matter?
  • Are any of several outcomes acceptable?
  • What are the crucial deadlines along the way?
  • Are there strict budget limits?
  • Who is the ultimate decision-maker?
  • What would a successful result look like to the client?

There are many other questions to ask along the way that will enable you to apply the best principles of project management. They involve:

  • Identifying and scheduling specific activities
  • Assigning tasks and managing the team
  • Planning and managing the budget
  • Assessing and preparing for likely risks to the budget and schedule
  • Managing quality
  • Negotiating changes in fees and expectations when the scope of the matter changes unpredictably

You have to go to the drawing board and divide the matter into its component parts so that you have an informed idea of whom you’ll need to do each component task, how many hours and at what rate, how long each task will take, and all those other uninteresting details that get in the way of having fun doing legal work. But such knowledge enables you to push back constructively when the client complains, with informed explanations for the cost, time, number of staff, etc. 

 

7.  The Post Mortem: turning the end into a new beginning

This practice has so many benefits that it’s hard to understand why it so often gets neglected. Undoubtedly, it has something to do with getting on to the next substantive legal issue and avoiding “administrative” matters that may bring up uncomfortable issues.

To put it simply, after virtually every matter – particularly with clients who could send you more work – ask the client to do a post-mortem with you so you can provide even better service in the future. These sessions are both learning and marketing opportunities. 

In a large matter, you should suggest a “lessons learned” review after each significant milestone. If they regard it as an imposition on their time, they’ll tell you, and the only thing you’ll have lost is a little bit of perceived arrogance.

There are countless useful questions you can ask – questions about the client’s perceptions of value, bigger-picture business questions, active listening questions, and the like. The ACC even gives you questions in the section of its website, “How to talk with outside counsel (or clients).” 

The process is simple enough, and can be accomplished with two questions. First, “What did you like about the way we handled this matter?” That’s an easy one for clients and, when they list a few favorable things, they feel less awkward about answering the more important question: “What could we do better?”

Don’t argue with the client. Resist the temptation to defend criticized practices or to explain why you did what you did, even if there’s a good reason why. It is not about understanding reality but understanding the client’s perception of reality. If an explanation is really necessary, it can wait for another time. Just listen and let them do most of the talking.

There are countless other good questions to choose from, depending on the specifics of the matter and the experience. Pick only about three key ones and see if they lead elsewhere as well. But let the clients go wherever they want to go. Whatever they say at this point is useful. 

If you think your client will not be able to respond to open-ended questions (which are the most useful), you’ll need to list some areas and ask them to rate you 0-10 in each one. That makes it much easier for many people.

Lawyers pride themselves on their specialized knowledge. But a plumber is a specialist, too, and always subject to questions about how much time something took and whether someone else could have done it quicker, better, cheaper. Effective communications is your first step from fungible specialist to trusted advisor.

And trusted advisors seldom have fee disputes – or need to write proposals.

 

A slightly adapted version of this series was originally published in the July 2015 issue of Of Counsel: The Legal and Management Report by Aspen publishers.  A pdf of that complete article can be downloaded from our web page.

 
      


The heart of LPM: Communication, Part 1 of 2

A guest post by Ed Burke

 

Legal project management (LPM) – which law firms are adopting in droves for greater efficiency and profits – is widely thought to be a green-eyeshades exercise focusing on budgets, deadlines, and the like. So it came as a surprise to some when a recent study found that the leaders of more than 50 of the largest law firms believe that the most important elements of LPM are client communications and, its close cousin, defining the scope of a matter.

As one managing partner summarized:

There are two [issues] that I would rank the most critical: the setting of objectives and scope, and managing client communications and expectations. Those, to me, are linked at the hip. . . .You can run into difficult parties and unforeseen problems, and that’s where an understanding between you and the client has to be solid enough that you can have those kinds of conversations. And work your way through it.

Clients agree, if the Association of Corporate Counsel (ACC) can be believed. The ACC has listed responsiveness/communications among the most important factors in client satisfaction.

The new study is Client Value and Law Firm Profitability by Jim Hassett, founder of LegalBizDev. It includes comments from leaders of many of the most successful firms in the world. Even they are frustrated by the difficulty of improving their firms’ client communications. These challenges require significant personal interplay directly with the client as well as behavior change from partners. They cannot be addressed by software, as some other LPM issues can.

But the comments of these leaders do suggest a number of ways to improve things. The following points are drawn from their comments and from our years of experience training lawyers in LPM. If you’ve heard some of these points before, that’s OK. Keep hearing them until you get inspired to do something.

 

1.  Clients really do want better communications.

The first thing to understand is that, despite their busy schedules, clients want you to communicate with them. Consider this comment from a senior partner at an AmLaw 200 firm:

Client communication is far and away the single most important factor in the relationship. Clients don’t want surprises. They want to know if you’re a proactive communicator. Do you know how they want you to communicate? Are you consistent and timely, and communicate to them information they need to know?

Clients want you to be able to figure out what they want communicated and what they don’t want to be bothered with. They want you to know how they want you to communicate. What do you do to find that out? Try asking. They’ll tell you.

Make sure clients know they can contact you at any time for any reason. Keep them regularly informed. Consider sending them brief weekly or monthly status reports. Ask them if your communication methods work for them.

 

2.  Make your communications direct.

Clients want to hear from you and not your marketing department through mass-mailed client advisories and the like. As one survey respondent put it:

When I was a GC, I would trash all the client alerts I got. I had 27 of them on the same case. But the ones I kept were the ones where an actual lawyer said to me: ‘I saw this article about X, and it made me think of you. If there’s anything you want to talk about, or if there’s anything I can do, here’s what I was thinking...’ It was really creative, value-added communication.

That’s right, you don’t even have to labor over an exhaustive client advisory. An article that touches on something critical to the client demonstrates you know and care about his or her issues. 

Most lawyers consider themselves better written communicators than oral. But the more direct, the better. A phone call trumps an email, and an in-person meeting trumps a phone call. In any event, avoid communicating exclusively by email.

As one chair put it: 

The greatest thing that provides value to the client, in my view, is constant communication and responsiveness. And I’m not talking about emails. It is so much better to be in constant telephone communication or breakfast meetings or lunch meetings, or just visiting. What we’re trying to do is not just deal with litigation. We’re trying to prevent litigation.

 

3.  Listening: the soul of communications

The most important element of communications is not self-expression but listening.  Showing how smart you are is an unfortunate carryover from law school and your associate days. It’s more important to ask diagnostic questions and to listen until you find out what the client really wants (sometimes, instead of what they say they want). Instead of talking, ask open-ended questions that tend to prompt them to do most of the talking (e.g., “Tell me more about . . .” or “What makes this urgent?”)

When I was a Chief Marketing Officer, I once suggested to a diffident partner that he ask the prospect in an upcoming meeting, “What keeps you up at night?” He shrunk away in horror at such a personal question. “Well, use it if you get stuck,” I said, which he did and later reported back in wonderment: “Well, I asked him what kept him up at night. And he told me!!”

 

4.  Bad news can’t wait.

One of life’s enduring mysteries is why we tend to avoid confronting difficult issues and conversations, even when we know that doing so will only make them worse. Lawyers are no exception. Are they hoping that the brilliance of their work will neutralize an unexpectedly large bill on the horizon? Or maybe they’re just hoping to die before they have to bring it up.

This senior executive’s response was typical of many:

It drives me crazy when a lawyer says that the client’s going to be really stricken by this month’s bill. I then ask the lawyer “When did you know the bill was going to be really high?” And they say they knew it a while ago.

Contrast that with this comment:

We had a fixed fee a couple of years ago on a $300,000 matter. The partner managed it very well and had continuous dialogues with the client. The $300,000 turned out to be closer to a million, and he got pretty much every penny of it.  There were things that happened that were out of control, but there was constant communications about what was going on, which is so important.

 

A slightly adapted version of this series was originally published in the July 2015 issue of Of Counsel: The Legal and Management Report by Aspen publishers.  A pdf of that complete article can be downloaded from our web page.

 
      


Tip of the month: Ask every client about their communication preferences

At the beginning of each matter, ask the client how often they want to be informed of your progress and the best way to provide this information.  One client may prefer formal monthly reports, another may want informal emails only when issues arise, and a third may be comfortable only with regular phone calls or even face to face meetings.  The client is always right, and keeping in touch the way they prefer will go a long way toward increasing client satisfaction.

 

The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. More information about this tip appears in the third edition of my Legal Project Management Quick Reference Guide.

      


Overcoming Resistance to Legal Project Management

A guest post by Gary Richards

 

“The difficulty lies not in the new ideas, but in escaping from the old ones.”  - John Maynard Keynes

 

It is natural for people to resist changing their normal way of doing things, and many lawyers resist the change of approach and mindset required by legal project management (LPM).

This post was written for internal LPM champions who see the value of LPM to their firm.  It lists six common objections to LPM.  Each is followed by questions and statements that could be used to guide a conversation to overcome resistance.

  1. Clients don’t always know what their objectives are.
    1. Do you have a list of typical questions you ask to help a client define their objectives?
      • Asking relevant questions shows the client that you are interested in what is important to them.
      • Your questions can also help the client think about issues they normally don’t consider.
    2. Do you and your client draft a written statement of objectives for discussion and mutual agreement?
      • Without clear, agreed upon objectives that the client is willing to pay for, you are more likely to have trouble agreeing at the end of the matter on what should have been done, and what will be paid for.
      • It’s easier to discuss client objectives if they are written
      • A draft can more easily be marked up during a discussion than taking notes without a draft for reference.
    3. Do you seek to determine whether other decision makers or stakeholders in the client’s organization share those objectives once defined?
      • A written statement of matter objectives is handy for your client contact to use in his/her internal discussions.
  2. Planning is often a waste of time. My cases evolve so quickly and have so many surprises that things never work out the way I expect. Besides, I don’t have time to plan and budget.
    1. Does the fee incurred ever exceed your quoted budget estimate?
      • Matter plans and budgets allow more accurate fee estimation.
    2. How do you tell if you are ahead or behind in work on the matter?
      • Matter plans help you to monitor progress
    3. What would suffer if you spent 30 minutes planning your next matter immediately upon accepting the representation?
      • Planning time is frequently billable, since the client benefits from increased efficiency, thoroughness, timeliness, etc.
    4. Do you ever run into:
      • Last minute crunches?
      • Missed deadlines?
      • Unavailable staff because they are already committed to another matter?
      • Task-level matter plans help avoid all three of these problems.
    5. Were there ever any problems with scope creep after you started work?
      • It is easier to show that the newly required work was not included in the initial plan/fee estimate if, in fact, an original plan/budget exists.
      • Otherwise, the client may feel it is legitimate to say something like “You are the expert… I thought you would have foreseen this!”
  3. My clients don’t require budgets.
    1. Do they just pay in full whatever you bill them? Or is there sometimes pushback on fees?
    2. Do you ever have conversations with clients that include fees?
      • Those discussions go better when you have a basis for your estimate, such as a matter plan and a clear scope statement.
    3. How do you determine what fee and/or timing to tell the client in the engagement letter?
      • At some point very early in the engagement, clarifying the fee expectation is important.
    4. Do your initial fee estimates ever prove to be too low?
      • (If “yes” because of scope increases…) It is easier to show that the newly required work was not included in the initial plan/fee estimate when, an original plan/budget exists.
      • (If “yes” is because of simply underestimating…) Matter plans allow more accurate fee estimation. Discussing the plan with clients can help shake out exactly what should be included in the work to accomplish their objectives.
  4. I have done this kind of work for years… I know how to provide my services.
    1. Of course I recognize that you would not be working in the firm if you had not been successful for years. But competitors are becoming more efficient and we want to stay ahead of them.
    2. Do you ever have any tasks you have delegated either come in late or get completed differently from what you expected?
      • Matter plans improve the clarity of delegated work, and the likelihood that it will be performed successfully.
    3. Do clients ever push back on fees/require write-offs to keep them happy? If so, how do you handle that?
      • Matter plans and communication plans help avoid fee surprises and related client dissatisfaction.
  5. My problem is that there is just more work to do than I can handle.
    1. Is it possible that you could delegate more of the tasks you are now doing that don’t require your level of skill knowledge and training?
      • (If “Yes”…) Having a solid matter plan/budget makes it easier to identify and hand off tasks that could be done by others.
      • (If “No…there’s no one to delegate to.) If you ask and are refused, then you have data to provide management about the need for more staffing. If you don’t ask, then vital information is being hidden from the firm, and client service may be suffering.
  6. If I become more efficient, won’t my hourly revenue drop?
    1. Is it possible that competitors could take the work away by offering the same quality for lower fees, due to greater efficiency?
    2. Is it ethical and/or a good business practice to have the client pay for your lack of efficiency?
      • When you are able to show that you are you efficient, it increases the likelihood of additional business and referrals from that client.
    3. Do you already have all the new business generation that you can handle?
      • If you reduce the time it takes for you to deliver quality services to a client, you can invest that “found time” in seeking new business, or other activities.
      



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