How can firms grow strategically without sacrificing profits?
The competitive legal environment disrupting the scene is certainly impacting the way firms look at opposition and the way they compete but what about what they are competing for?
Approaches to client development and growth
Going after profitable work is pivotal for firm growth yet frequently stories are shared about pitching or proposing work that the firm willingly admits will not be beneficial monetarily or strategically (or worst, both). The issue is further highlighted in the 2018 Law Firm Growth Enablement Survey done in partnership with Intapp and Calibrate Legal. When marketing and business development were asked about their concerns at the firm, identifying the right opportunity and chasing poor opportunities were top of mind concerns for 49% of respondents (33% and 16% respectively, see chart below). Understanding that not all work is about profit, some work is brought in to grow or strengthen relationships, a tried and true tactic but this is far more the exception than the rule.
Source: 2018 Law Firm Growth Enablement Survey, Intapp; Calibrate Legal
Common challenges with client development practices
During a round table discussion on Martech at Intapp Connect NY, participants shared that it isn’t just about finances – while it is important to put effort into ensuring RFPs, pitches and proposals will be financially viable. Strategically smart engagement is also imperative for the firm such as the right cross section of client/industry that the firm is trying to grow. The difficulty, culture aside, for a large proportion of firms is with the capacity to even assess financial viability let along strategic. Rather, many firms remain in the reactive state of responding to all that comes their way in order to keep up with demand and secure relationships within the firm.
Lessons learned in effective client development
So what can we learn from those pioneering in this space? Many ideas were shared like establishing key account programs to focus efforts. These programs identify key accounts not only based on revenue but also based on certain clients that the firm may want to grow for strategic relationships. From there, firms dedicate resources to serving these key clients to ensure that the firm is getting the work and delighting the client through superb service from intake to delivery. This involves working hand-in-hand with the relationship lawyer to help build a relationship and pipeline presenting its own set of challenges.
Collaboration isn’t just necessary with lawyers, interdepartmental collaboration is necessary as well, especially when thinking about ensuring profitable and strategic work. One innovative firm shared that they have started to bring these functions together to create data efficiencies and marry a solid process around bringing on the right clients. The value gain in data efficiency shines on its own when you think about the gain of insight for both teams as well as time saved. Further, from a marketing and business development standpoint, this allows for the firms to assess if it is a strategic and/or profitable client. On the risk side, this is not just about strategy and profit but also ensuring that the firm isn’t taking on bad debt for example.
Measuring ROI around business development
Lastly, measuring the effort regardless of what it is has to happen. There needs to be an understanding of the effort from marketing and business development embedded in the understanding of if it’s the right engagement. The survey mentioned previously showed that 85% of firms are not tracking ROI around their efforts yet again another area that resonated with the martech round table at Connect. This was frequently quoted as largely due to resources and the reactive environment they work within. However, a lack of ROI tracking is a big miss when justifying investment, showing value and understanding where effort should be spent – and how it helps to impact revenue.
There is a nice opportunity here for marketing and business development to flex and re-engineer process. It could be the implementation of tracking hours spent on RFPs, proposals and pitches in a spreadsheet, or more grandiose like marrying functions to ensure the effort on everyone’s part is rewarded. Winning in this market is not just about getting any work out there, it is about winning the right work from the right clients. This is how firms effectively compete and prosper!
Employee Spotlight: Meet Jennifer Richard, Senior Director of Account Management Operations
October 14, 2020
Meet Our September Intapp Employee Hero, Yelena Veligurova
September 28, 2020
Key-Client Programs: Use Tech to Build Win-Win Relationships
September 17, 2020
How Law Firms Can Leverage Tech Investments During COVID-19
August 28, 2020
Forecasting Is Your Secret Weapon: How Law Firms Can Transform Projections into Competitive Advantage
August 20, 2020
Sign up to receive email updates from Intapp