To join or not to join - Law Firms and Business Development Teams.

A survey was carried out on 10 legal firms and we solicited responses. From here it was determined that almost 40% of legal firms in the country had some form of business development assistance or marketers.The survey also indicates the current marketing and business development dynamics in law firms. The observation here was that while legal marketers are optimistic, they all faced the same challenge which is growth.

Legal firms are well aware that in order to achieve the growth, they need a robust business development team. Business development teams aggressively focus on achieving a higher level of growth. They are trained for this performance. Business development teams and legal firms collectively capitalize on economic indicators and effectively maximize on their cross selling and client retention strategies.

A business development team will devise new strategies in to existing files to create value. Winning new clients is far harder and often significantly less financially rewarding than retaining and broadening the firm’s services through its existing client base.

From the survey we found that only 42% of law firms have shares in the global market. These larger firms are well placed to continue to win a larger share of this market. Pricing (62%) and competition (43%) pose as the biggest challenges to a legal firm’s growth. The other biggest challenges cited are trying to pursue too many opportunities (35%), obtaining lawyer participation (33%) and lack of follow up. Only 20% of firms send their in house business development consisting of lawyers for business development training.

The survey also indicated the strength, depth and breadth of relationships with clients had played a vital role in positioning firms as trusted advisors and in taking discussions beyond pricing alone. The ability to convincingly explain the wider benefits and value add of the firm to clients will go a long way in helping organizations to achieve the much desired client commitment.

The survey also showed that having a robust business development team can help firms overcome the second challenge identified which is competition. However without the active support and engagement of the firms’ lawyers business development officers are not able to reach the optimum results. Here we found that the fee earners are needed to reinforce the messages that their business development officers have developed on behalf of their organizations.

88 % of law firms have strongly agreed that the strategy and activities required to win new business have shifted in the last few years. Anecdotal evidence also corroborates these findings. Probing further revealed that firms are keen to improve their ability to achieve clearly defined strategic business development and marketing goals. Business development teams in legal firms also report against appropriate issues and then analyze the results to gain insight into what they should do more or less of and then take the necessary corrective measures. This means the reports are consolidated to derive value. It will not only be reporting for reporting’s sake.

The survey also indicated that today law firms see the clear lines of demarcation between marketing and business development with the marketing team effectively setting the stage while the business development team furthers specific client acquisition and retention strategies and goals. All law firms need their business development team and marketing team to work together and maintain strong lines of communication complimenting one another.

The legal marketing team has today left behind their mechanical approach and moved on to a more relationship driven approach. They are emphasizing more on expanding the breadth of services offered by their firms into existing client organizations. Business development teams are today increasingly common in law firms. Their job scope includes supporting the firm’s lawyers to help them achieve their personal and departmental business development goals. Therefore, it is a joint venture effort between, business development team, marketing team and lawyers to win and retain clients.

The survey also showed that that law firms are outsourcing external business intelligence analysts to support new approaches to business development. Law firms are beginning to slowly invest in advanced analytics essentially looking to identify and to remove any issues that could impede their ability to win new clients and retain existing ones. They feel that this is also important for their firm to improve their offering and to make the organization appealing to newer customers and prospects.

Measuring the return on investment in business growth activities by law firms continues to be a challenge. 64% of law firms report that they are unsure, disagree or strongly disagree that their firm has quantifiable data to measure the ROI on marketing and business development initiatives actually works.

We ended this survey with a single open ended question to business development teams in law firms. The answers ranged from achieving strategic goals to transformation on how to retain and win new business. Every law firm inherently understands that their firm’s profitability comes from delivering client value but they have forgotten this in the midst of management practices (such as an obsession with leverage and utilization) that are no longer relevant to the changing market.

Business development teams gather data right from how responsive a firm is to the quality of their work and service, regular communication, lawyers that show real interest without looking at fees, firms that add value to what they do. All this data is consolidated to derive feedback and subsequently a strategy is devised for injection. This is the business development teams prerequisite to achieving a high performance. A good business development team is a market oriented. It is a team that understands markets that leads to client value which is very hard for other firms to copy.

Business development teams know why a client choose a law firm based on expertise and industry knowledge. These aspects of client value relate to the ability of the firm to leverage intellectual capital, and since knowledge is the product of a law firm, this process is one that differentiates one firm from another.

This approach to strategy which is client driven and market driven, seniority or superiority with a stellar reputation creates true differentiation. At the end of the day, no firm can survive over the long haul unless they deliver consistently high levels of client value. Clients are becoming more demanding as well as knowledgeable. The trends in the legal market such as LPO, cross boarder equity, globalization, and technology means that law firms can no longer take their markets for granted and it will be the firms which can adopt a ‘joint venture” attitude are the ones which will stand head and shoulders above the rest.