According the Thomson Reuter’s 2018 State of the Legal Market, demand for legal services has stagnated, creating a struggle for firms to earn new business and stay profitable. To maintain profitability, firms typically take one of two avenues. They either take a traditional route, increasing rates and slashing expenses, or they break away from the traditional and invest more heavily in business development strategies. The report found that the latter achieves stronger growth.
So, what are those business development strategies and which ones generate the most revenue?
That’s what David Ackert, President of Ackert Inc., wanted to find out in their 2018 Business Development Trends Across Law Firm Demographics study. In surveying over 100 law firms of various sizes, it was found that there were clear front-runners when it came to the best revenue-generating marketing and business development practices (see below).
To help translate these findings into actionable insights you can use, here are our key takeaways from Ackert’s findings and how you can weave them into your legal business development strategy.
1. Education Drives 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. Leverage Your Client Relationships
Another top revenue generating tactic was simply asking clients for new business. Law firms that felt confident enough to ask their clients for referrals saw success and experienced a high-yield from their efforts. Strong client relationships are not only important for client retention and loyalty, but they’re also important for growing your firm. What’s interesting, though, is that senior associates and junior partners at law firms did not see as much success in asking clients for new business. It was senior partners that saw the most success.
It’s important to note that because 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. Luckily, you can help your associates and junior partners develop stronger client relationships through sales enablement and relationship intelligence.
To revisit point 1 on educating your attorneys, providing training and technology bundled together can help 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 Is Key
Cross-selling is another item at the top of this list. Similar to asking clients for new business, cross-selling also involves leveraging your firm’s existing relationships. Cross-selling isn’t always widely used, however, with lawyers wanting to protect their client relationships. After all, they don’t want to jeopardize the trust they’ve built with a big ask that could easily get rejected.
Because lawyers want to keep trust in tact, it’s important that you help them identify the cross-selling opportunities that leverage only the strongest client relationships. Tools like CRM data automation can point 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.
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
If there’s a pattern in the most successful business development tactics, it’s that the top 10 involve getting out from behind your desk and having meaningful conversations or meetings with clients. On the opposite end of the spectrum, the bottom 10 tactics are all about nurturing several relationships at once. In other words, the most effective tactics are ones that are personal and targeted, not generalized for mass audiences.
Knowing this, it’s important that your attorneys make time to visit their clients face-to-face, take key clients out to dinner, or even attend industry events. This allows your team to regularly have conversations with both existing clients and new prospects. While the bottom 10 tactics are important for brand awareness and engagement, they don’t necessarily bring in the kind of revenue that actual face-to-face conversations can.
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% of gross revenue. According to Gartner’s 2017-2018 CMO Spend Survey, other industries clock in at an average budget of 11.3% of their gross revenue. That’s a 391% 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% 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.
In summary, these are the five legal marketing trends your firm can employ to grow revenue. Through tactics like business development coaching, client education, client visits, referrals, relationship intelligence, and cross-selling, your firm could experience your best year yet.
For more ideas that can result in high returns for your firm, view these law firm marketing tactics that fuel growth.