Business development entails two principle kinds of activities:
- One-time activities to establish the overarching business development.
- Recurring activities that constitute the ongoing business development process.
Taken together, the framework and the process constitute the business development system. Before you embark on the business development process, you must put the framework in place. A sound business development framework provides a strategic context in which individual development activities take place, assigns roles and responsibilities, and establishes procedures for managing the process.
Start With Strategy, Especially in the New Normal
You can’t effectively plan your pursuit of profitable business with individual clients or prospects—that is, your tactics—unless you understand that pursuit in the context of the overall strategic objectives of the firm. A clearly articulated strategy can:
- Guide the work of the firm’s lawyers and staff;
- Allocate the use of scarce resources such as money, time, and skills;
- Send a clear message to the individuals who make hiring decisions so that they know exactly who you are and what you have to offer.
Unfortunately, strategy in many law firms has a troubled history. It often takes one of two forms. The first is a tendency to overanalyze. Lawyers are by nature analytical, and the endless possible strategic permutations of legal services, resources, industries, and geographies can lead to “analysis paralysis.” The second is a tendency to formulate overambitious, inappropriate, or vague plans. Strategy can be heady stuff. It’s exciting and often intellectually challenging to envision new markets, think of ways to rebrand to occupy a particular niche, or develop ambitious, if vague, visions, such as “to be the law firm of choice in (fill in the blank).” In both cases, the result is the same: the strategy gathers dust on a shelf until it becomes clear that little has come of it; then a new round of strategizing begins, often enabled by consultants who don’t have to worry about implementation.
If the result of both these unfortunate tendencies is the same, the cure for both is also the same: Focus strategy on the most profitable business.
In most law firms, 20 percent of the clients produce 80 percent of the revenue. Yet typically they receive a minuscule portion of the firm’s business development and marketing attention. Although increased competition, eroding client loyalty, “partnering,” and a slew of other factors in the new normal have caused some lawyers and law firms to reevaluate key client retention efforts, most law firms do not focus their business development and marketing activities on client retention.
Willie Sutton, the infamous bank robber, may not be a proper role model, but he knew where the money was. Lawyers and law firms, on the other hand, seem compelled to focus their limited business development and marketing time and resources on where the money isn’t—dispatching hit teams all over the place to give prospective clients new business pitches, most of which will not pan out. To be sure, natural attrition and other factors mandate that a firm keep looking for opportunities with new clients. But it’s far more important to retain current clients. This is difficult for most firms to comprehend; that is, until a major client defects—or fades away. Only then do they realize how much income the client represented and the incredible amount of time and resources they must devote to getting their revenues back to where they were before the defection.
Given the realities of attrition and competition, the strategies of most firms will encompass some combination of retaining existing clients, expanding business with those clients, and finding new business. Further, firms will necessarily continue to position themselves—and sometimes reposition themselves—in the market for specific services or in specific industries. But no matter the details of those strategies, the underlying principle should be profitability. Do you want to concentrate on retaining clients? Then make sure they are profitable clients. Want to expand your business with existing clients? Make sure it’s profitable business. Do you want to capture new business in an industry you’re not currently serving? Let profitability be your guide.
By providing a clear criterion of desirable business, a focus on profitability cures analysis paralysis and cuts through the fog of heady strategizing to create a clear bias for action. Moreover, it directs action toward what is, after all, the ultimate goal of any law firm: making money.
Your Guide to Success
This post was adapted from the Law Practice Division’s publication, The Lawyer’s Field Guide to Effective Business Development, Second Edition. In this book, author William J. Flannery, Jr. shares practical ways you can build long-term, profitable client relationships.