Demand for legal services has stagnated, leaving firms struggling to earn new business and stay profitable and facing two typical options.
There’s the traditional route, increasing rates and slashing expenses Or there’s the path shown to deliver stronger growth: investing more heavily in business development strategies.
But which business development strategy should you choose? Which generates the most revenue?
That’s what David Ackert, President of Ackert Inc., set out to discover when they surveyed more than 100 law firms of various sizes for their study, 2018 Business Development Trends Across Law Firm Demographics.
What they found was, when it comes to the revenue-generating marketing and business development practices, there are some clear front-runners (see below).
Now, to translate these findings into actionable insights you can use. To make it easier on you, we’ve done the heavy lifting and compiled our key takeaways from the study. Read on to find out how you can weave them into your legal business development strategy.
1. Coaching, Education Drive Revenue
Sales and business development coaching was the no. 1 most successful tactic for law firms of any size. This included one-on-one coaching, group trainings, online seminars, presentations, and outsourced business development consulting. The buck doesn’t stop there, either.
The no. 2 most successful tactic was client education, which includes client trainings, panels, and seminars. Educating both the law firm’s attorneys and clients helped other firms generate new business.
It’s no secret that lawyers aren’t taught how to be salespeople in law school. But as the primary revenue generators for your law firm, that’s what your lawyers need to be: salespeople. The firms that recognized this gap and provided sales training or business development coaching ultimately saw their lawyers generate more revenue and grow their client base faster.
And as far as clients are concerned, they hire legal firms for their legal advice, thought leadership, and expertise. The more firms can share expertise and educate their client’s, the more valuable they become in their client’s eyes, improving retention and loyalty. If you want to see similar success at your firm, try increasing the frequency of your firm’s business development coaching and client training programs.
2. Make the Most of Your Client Relationships
Another top revenue-generating tactic that seems painfully obvious in retrospect: ask clients for new business. Strong client relationships are not only important for client retention and loyalty, but they’re also important for growing your firm.
Firms that felt confident enough to ask their clients for referrals saw success and experienced a high-yield from their efforts, particularly when senior partners made the ask.
As your associates and junior partners might not have as many years supporting their client relationships, asking for new business might put a strain on the relationship. So, be sure to help your associates and junior partners develop stronger client relationships through sales enablement and relationship intelligence.
And, revisiting the importance of education, bundling your training and technology together can help also encourage younger associates to ask those tough questions that drive more organic growth. If all else fails, an incentive program might provide enough reward to get them out of their comfort zone.
3. Collaboration Breeds Success
Cross-selling, another item at the top of our revenue-generating graph, also involves leveraging your firm’s existing relationships. But firms often neglect this tactic, as lawyers want to protect their client relationships, and may fear jeopardizing trust with a big ask that could easily get rejected.
That’s why it’s up to you to help them identify the cross-selling opportunities that leverage only the strongest client relationships. Tools like CRM data automation can lead the way, pointing out those hard-to-find cross-selling opportunities automatically.
CRM data automation also gives lawyers insight into how client relationships are progressing, allowing them to make an informed decision on whether or not a cross-sell would put their relationship at risk.
Most law firm contacts and account data lives in the attorneys’ email client. Key contact data lives in emails, calendars, and the address book, but rarely makes its way into the firm’s CRM, limiting the relationship mapping potential for business development and marketing.
For example, Introhive’s CRM data automation engine sits between your email client and CRM to automatically identify contacts that live in email, but not in CRM. With the click of a button, Introhive will map over those contacts to your CRM—no manual entry required. (To see Introhive in action, request a demo).
Simply having a CRM isn’t going to get returns as shown in the survey results. Instead, you need to make CRM work for you so you can provide a greater level of customized service and come across more revenue generating opportunities.
4. Get Out From Behind Your Desk
All top ten items on this graph have one important thing in common, aside from increasing your revenue. They require you to get leave your desk for meaningful client conversations.
And the remaining 10 tactics are all about nurturing several relationships at once. In other words, human relationships are still the foundation of business success. And the most effective sales tactics are personal and targeted.
That’s why it’s imperative that your attorneys carve out time for face-to-face client time with meetings, dinners, and even industry events. These are the spaces where fruitful conversations with existing clients and new prospects will happen.
5. It’s Time to Shake Up Legal Business Development
The first question of the survey sought to determine the percentage of gross revenue that firms allocated towards a marketing budget. The average answer was staggeringly low at 2.3 percent of gross revenue. According to Gartner’s 2017-2018 CMO Spend Survey, other industries clock in at an average budget of 11.3 percent of their gross revenue. That’s a 391 percent increase in spend.
If legal practices want to grow their firms, it’s clear that the industry as a whole is underinvesting and underperforming in terms of their marketing and business development strategies.
As the study pointed out, legal services is no longer a growth industry, so maintaining a competitive edge will require more intentional investments into business development and marketing initiatives.
Historically, law firms could invest 2.3 percent of their gross revenue in marketing and still see substantial growth. However, law firms can no longer follow this trend.
To grow your firm, now is the time to begin researching and evaluating new technology and processes that can help increase your reach to new clients and prospects.
For most law firms, the relationships they need to grow the firm already exist within their human capital. Investing in an automated and intelligent way to harvest those relationships will be crucial for growth in the coming years.
Invest. Plan. Execute.
If your law firm wants to grow revenue, these are the five marketing and business development trends you can’t afford to ignore.
Tactics like business development coaching, client education, client visits, referrals, relationship intelligence, and cross-selling, could give your firm its best year yet. (Want more? Check out this list of law firm marketing tactics).
How Introhive Accelerates Business Development
See for yourself how Introhive automates mundane tasks and manual CRM data entry, while also serving up key client insights—exactly when and where busy professionals need them most.