In the first of three articles, Jon Hepburn from The Fedora Consultancy offers practical business development ideas that will help you put your clients and potential clients at the centre of the decisions you make about your firm's future.

Starting with a look at specific issues affecting law firms and an overview of the 10 steps, Jon then looks at planning techniques, the client database and identifying cross-selling opportunities,

Let's start by defining what we actually mean by a 'business development campaign'.

Whether it is occasionally or on an ongoing basis, business development requires plans and techniques to generate the additional work that will be required by the firm to either maintain or expand its workload. It is one of the greatest challenges facing law firms - or any business for that matter. Successful business development is about managing a process and getting the best out of those involved. To maximise a campaign's chances of success, however, consider a few fundamental questions first;

  • Are you looking to attract new clients or getting more from existing ones?
  • Who will be taking responsibility for this in your firm?

Obvious questions, maybe - but often overlooked. And one reason they are often not addressed is because of a prevailing attitude within many law firms towards business development. Before we look at our 10 steps, let's consider the obstacles to success that this can present.

SPECIFIC ISSUES FOR LAW FIRMS

There are some particular issues for law firms and you may recognise some of them. Some may feel that fee earning is more vital and that 'Lawyers shouldn't have to do this'. But fee earning must be supported by business development to maintain its growth.

Within the firm there may be a lack of awareness of the sales process, or difficulty in differentiating the firm's services from others. Some may consider people to be 'their own clients' rather than the firm's clients. Inadequate training in business development techniques is also quite common, or some may simply feel that their resources are too limited to put business development on the agenda.

Understanding the process of identifying prospects, building a relationship with potential clients and clients becoming advocates for your firm is key to success. Your marketing programs should reflect this and the messages you communicate should be suitably differentiated as the relationship progresses.

THE 'RELATIONSHIP LADDER' AND THE RIGHT TOOLS FOR THE JOB

A client relationship goes through a number of stages requiring different messages as the relationship progresses, and here are examples of the specific marketing messages on this 'relationship ladder'.

Group

Activity category

Specific marketing activities

Prospects

Raising profile

Networking, advertising, PR, sponsorship of events

Contacts

Specific marketing

Direct mail, newsletters,

Potential clients

Demo expertise

Seminars, submit tenders, hospitality

Clients

Sell your services

Targeted proposals, focused hospitality

Advocates

Active dialogue,

Bespoke/tailored activities, joint seminars, events

As we don't have time to go through all of them, let's take a more detailed look at some examples from across the relationship spectrum and prioritise them into our first ten steps to a business development campaign.

The 10 Steps

So, a quick overview of some of the issues that we'll be covering, the order is not definitive but it does provide the necessary building blocks.

STEP 1 Planning and identifying your priorities

STEP 2 An accurate client database

STEP 3 Identify opportunities to cross-sell

STEP 4 Research/telemarketing

STEP 5 Address branding issues

STEP 6 Update your promotional materials

STEP 7 Make contact (e.g. Direct Mail, Advertising)

STEP 8 Networking

STEP 9 Fine-tune your service offering

STEP 10 Evaluation

STEP 1 Planning and identifying your priorities.

It is extremely important at this point to recognise the word 'plan', identifying what business the firm is looking for, and developing a suitable (and measurable) plan to achieve it.

  • Think about what you need to know
  • Who you are targeting, where they are
  • What do they need and what can you offer?
  • How important are those needs?
  • Who else is meeting those needs
  • How can you get to know the decision makers?
  • What are they like? Their personality and values?

Different parts of your firms may require a different approach, so the development plan needs to reflect this. Attracting corporate clients involves creating relationships with important decision-makers and intermediaries, such as accountants and surveyors.

Elsewhere, family law may involve a completely different set of intermediaries, events and timescales before the target audience can be influenced to do business with the firm. A useful starting point is your existing client list: contacting your existing clients is a simple task but one that is often not undertaken. This is our next key step for developing the business.

STEP 2 An accurate client database

As an existing provider of legal services, you already have a considerable advantage over any new competition. That is, a bank of customers who already know you and are doing business with you. But, the value of this is limited if you don't know who buys what from your firm, why they do so, when and how.

  • Your client database is a potential gold mine. Effective management of it can help you get the most out of the business you already have and give you access to potential new clients for other services. It can also give you valuable information on how to develop your product and service delivery. It is also widely accepted that it is cheaper to sell more to your existing clients than to go out and find new ones, so it makes sense to make sure that your database is accurate and up to date.
  • The costs of developing the database should be seen as an investment likely to produce clear and obvious benefits to the law firm in terms of both enhancement of goodwill and the generation of new work. This is particularly importantly when it comes to attracting external investment. With multi-disciplinary practices and alternative business structures starting next year, firms considering these will undoubtedly find that their value to others as an investment opportunity will depend on their ability to attract future business. A firm's database thus becomes a significant asset.
  • Many of you will already have the required technology in your case and practice management systems to keep in touch with past, current, and potential clients. However, some effort may be needed to re-organise your existing data into a useful system from which regular and, most importantly, relevant information can be sent.
  • With a detailed knowledge of your clients, the ability to pro-actively manage your relationship with them increases, as does the ability to offer more relevant services and focus on the profitable work the firm is seeking.

STEP 3 Identify opportunities to cross-sell

Moving on to a bit of theory, let's look at profiling your current clients into some straightforward categories. This will help to organise your database and help you focus on going after more of the type of business you really want.

  • Profiling, or to give it its technical name, 'segmentation', is a method of creating distinct groups of clients with similar needs. This means that a subset of your client base can be selected as a specific target market and reached with distinct marketing activities.
  • There are many different ways of doing this, but sorting them by work category and activity level is often the most useful when it comes to legal services. They provide a good starting point, especially if you don't have much information about your existing clients.
  • If you are profiling by category, you may divide them into, say, private, commercial and publicly funded. If you are profiling by activity level, this involves quantifying the volume of clients you actually have. Doing this will enable you to observe any different purchasing patterns and estimate their potential value, both in the short and long-term.
  • Obviously, devise your own categories, but if you are looking at each legal service you offer, make sure you count clients for each service they use. The important thing is that you do categorise them and don't treat them as all being the same. Do remember, though, that it is better to form a dialogue with 80% of your clients rather than spend weeks trying to identify them all.

CROSS-SELLING

The value that your existing customers represent to your firm cannot be emphasised enough. They offer a great opportunity for 'cross-selling': that is, introducing them to additional (relevant) products and services.

  • Building a good personal rapport with your clients makes good business sense and, in effect, 'warms up' this valuable resource. Many firms overlook this opportunity and don't make their clients aware of other services that they can offer. But being a captive audience, it means that they represent a cost-effective route to potential new business.
  • Indeed, cross-selling can add up to 10% to your firm's turnover. The key to successful cross-selling and up-selling is to focus your efforts on meeting the client's needs, rather than simply pushing more products and services at them.

Internal Considerations

Adopting the correct approach here can bring genuine added value to the client-professional relationship. Management of the process is important and there are a number of internal issues that you should consider.

  • Cross-selling in law firms has traditionally been given much lower priority than it is in more sales-orientated organisations. So, when introducing the concept, an attitude shift may be required within the firm as it adopts a more business-like culture. You should make sure you provide training and identify staff that excel at this.
  • A question to consider; to what extent do you require your people or departments to provide leads to other areas of the firm and is this related to your fee-earners' performance agenda? It can help if cross-selling is included in performance plans. You could also consider targets for each fee-earner or department.
  • Effective implementation by department heads is key. This shift in culture can help bring a steady flow of business whilst simultaneously addressing genuine client needs. And, of course, client reviews provide an excellent opportunity for staff to cross-sell. It is more effective if any additional services are to be offered, for it to be done by the person who already has the relationship with the client.

Article by Jon Hepburn from The Fedora Consultancy, a specialist marketing consultancy offering tailored services and support to law firms.

To read Part II of this article please click on the Next Page link below

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.