The ability to effectively develop new business is an essential component to a successful law practice, yet many lawyers say they don’t really understand it
Every law firm is unique, but many of them share the same struggles, such as how to bring on new clients or develop new business from existing clients. Every lawyer who wants to build a book of business must be able to do these things, yet very few lawyers would tell you they feel adept at it.
To illustrate how common this problem is, 30% of small law firms say that they face a significant challenge in acquiring new business, while another 43% say it presents at least a moderate challenge. Yet fewer than 3-out-of-5 small law firms say they have either implemented or even crafted a plan to address their business development challenges, leaving much of this pain and need unaddressed.
Many lawyers will say that they don’t really understand business development, nor do they have time to learn it. Yet, the ability to effectively develop new business is an absolutely essential component to a successful law practice. Referrals and repeat business are important revenue streams, but they will not be sufficient to help you find meaningful, sustained growth.
If your law firm, like a large number of other firms, takes an antiquated or ad hoc approach to winning new business, you will struggle to grow your practice. Finding space for growth requires an intentional plan.
So, let’s talk about making a plan for improving business development acumen.
Throughout this year, we’ve talked extensively about how to create and implement strategic plans for law firms. First, you must identify the goals you need to accomplish in each phase of your strategy. Then, you have to dedicate the time and resources necessary to meet those goals. This approach is just as applicable to improving your firm’s business development as it is to any other core competency.
Set Your 90-Day Goals
There are a few 90-day goals you have to tackle. First, you have to take stock of your current business development efforts. This includes all aspects of business development and marketing, including traditional advertising.
I’m frankly surprised by the number of attorneys who tell me that they have billboards or belong to listing services, but they don’t really consider that to be business development and have never considered the return on those investments. But if you’re spending hundreds or possibly thousands of dollars per month on a particular advertising or marketing effort, you’d better be expecting a return on that investment.
Sophisticated marketing and advertising professionals will tell you that a reasonable return on your investment would be a factor of 3- to 5-times your firm’s spend — that means for every $100 invested, you should yield between $300 to $500 in return. As you evaluate your current efforts, are you getting that kind of return? Don’t overlook expenditures because they are advertising; everything should fit into your strategy and has to make financial sense.
Another 90-day goal is to make sure you understand who your clients are and where they come from. If you’re like a lot of small law firms, a large share of your client base comes from the individual consumer market as opposed to business or corporate clients. These potential clients, by and large, shop online for everything from shoes to lawyers. So, the natural question becomes: How is your online presence?
You catch the fish in the ponds that you fish in. For example, one criminal defense lawyer where I live in the Twin Cities has paid for the ad space on the Yellow Pages for years. This works for him because his potential clients are in jail without access to Google. But unless you’re trying to reach potential clients that don’t have access to a computer, the same strategy might not work for you. In today’s market, a marketing strategy that depends on something like the Yellow Pages is the exception — the rule is that you need to go digital because your potential clients are.
Indeed, your consumer clients’ behavior demonstrates their affinity for the digital market. Your efforts to create a digital presence should meet your clients’ expectations.
Identify Other Addressable Opportunities
The next phase of your plan needs to look beyond the next 90 days and focus on what opportunities you can seize over the next year, as well as the reasonable steps you can make to move you measurably ahead.
It is in this phase where you start proactively shifting your business development efforts into areas that will better reach your potential clients. You’ve already identified who and where they are and what you are doing today to try and reach them. Now start making the directional shift to address the gaps you found.
You’ve got to find new ways to reach prospective clients. Don’t continue the same old efforts just because it’s what you’ve always done. Tactics from 10 years ago won’t work on today’s clients because they are not the clients of 10 years ago, or even 3 years ago. Get serious about beefing up your digital marketing efforts. It’s not enough to just be online. You need to find ways to effectively reach your potential clients. Some options include:
- creating and maintaining a robust web presence that’s more than just a basic webpage;
- writing articles, optimized for search engines, that show off your expertise;
- investing in some pay-per-click strategies to help attract eyeballs and round out your “organic” efforts; and
- implementing a lightweight, low-cost social media strategy using something as simple as a Facebook page for your firm — but make sure it’s professional.
Invest in creating digital channels for your practice that will hit the right potential clients at the right time so you can boost your “lead conversion rate,” the rate at which a client inquiry becomes a signed, paying client.
And remember, the hurdle here is to get to the requisite multiple of your marketing spend, that 3- to 5-times factor.
Long-Term Planning: Think Through the Megatrends
Megatrends are forces that will influence the market years down the road, such as changes in the law or regulatory environment, that can create opportunities for future advice and counsel. Understanding these megatrends can give you an idea of how to position yourself to meet future opportunities. There’s no better time than now to start building your understanding of what may influence your practice three-to-five years down the road.
And as I mentioned in a previous post, this can be an excellent place to leverage your staff. Understanding the long-term influences on your practice is absolutely vital, but it doesn’t necessarily need to be the top priority of a billing attorney whose time could be better focused on creating revenue to keep people and bills paid.
That is not to suggest megatrends can be pushed aside. Today’s megatrends will help define tomorrow’s addressable opportunities. Don’t ignore them because you think you don’t have time.
One Bite at a Time
The well-known quote from Creighton Abrams states, “When eating an elephant, take one bite at a time.” Improving business development acumen can seem like quite an elephant to swallow, but when you put it into the context of an intentional, phased plan, it becomes less daunting.
Your business development efforts should be thought of as a portfolio of actions focused on lowering your potential risk, while improving your outlook and potential profit. Each portion of that portfolio should complement the others.
There’s little downside to making a strategic plan to improve your business development efforts. And the upside, both for your practice and for you personally, can be immense.