The Barustors Report
Using Teams To Build & Manage
YOUR CLIENT RELATIONSHIPS
Legal Marketing Association (LMA) Bay Area Program
April 25, 2001
COPYRIGHT 2001 THE COSMIDES GROUP. ALL RIGHTS RESERVED.
What can law firms learn about client development from the Global 1000? They can learn to act and market like professional services organizations, according to two of America's leading authorities on law firm marketing.
Ann Lee Gibson, PhD, and Bill Flannery, J.D., gave an information-rich talk to the Bay Area chapter of LMA entitled, Using Teams to Build and Manage Client Relationships. According to their research, the average law firm only provides 8% of the legal services for which its clients budget. Their thesis: by adopting a team-based approach to managing their client relationships, law firms can:
marry the client to the firm, rather than to individual attorneys
reduce client defections when rainmakers leave
retain talent by rewarding excellence at all levels of the firm
integrate all departments of the law firm into a cohesive unit
develop and retain a larger share of each client's business
Gibson introduced their presentation by challenging attendees to find opportunities for growth. "It's times of economic downturn like these that permit law firms to reflect, to plan, to change, and to build. It's times like these that motivate some firms to explore the issues of, 'What's holding us back?' 'How can we grow stronger?'"
LEARNING FROM THE GLOBAL 1000
Top companies treat their clients as accounts. Moreover, they prioritize these accounts according to their current and potential revenues, devoting the greatest resources to their most important clients. Gibson and Flannery suggest that law firms take those clients who comprise 80% of the firm's revenues (as few as 3% of their client base), and treat each as a separate account. Of the remaining clients, the strongest should be grouped by industry (not practice groups!). The balance of clients can fall into the third category, assigned to teams whose task it is to build them into industry accounts.
The teams that service the firm's key clients should contain a cross-section of legal practice areas and staff functions, the latter consisting of representatives from H.R., I.T., accounting and of course, marketing. These microcosms represent the full services of the firm in one package, ambassadors of goodwill in every legal and service area available to the client. This approach can open new sales opportunities for the firm, and reduce the client's incentive to follow a defecting attorney.
Moreover, law firms should emulate other professional services firms by designing compensation programs according to the firm's revenue goals. For example, if the firm wants to increase new client revenues in its telecommunications sector by $2M, it should offer an attractive bonus to its telecommunications team if that goal is reached. Conversely, if the firm wants to reduce its commitment to, say, the insurance industry, it should adjust that compensation program accordingly.
How does the firm attract and retain top talent -- legal and non-legal? They do this by creating several career paths for their people. This includes opportunities for members of declining industry segments to move onto the hotter teams.
Finally, as law firms go global, it becomes increasingly important for management to devise uniformity in billing methods, performance standards, technology and culture. A firm's London and Tokyo clients, for example, should enjoy the same caliber of service enjoyed by the firm's New York clients.
GOAL SETTING: THE PATH TO SUCCESS
"If you can't manage it and measure it, don't do it." So reminded Bill Flannery, as he drove home the message that law firms must become goal-oriented. Flannery challenges firms to set clear revenue targets, define the necessary tasks, and then commit to those goals by having all the attorneys sign their names to them.
Gibson and Flannery reminded the group to "Love the ones you're with,"‹that it is easier and more cost-effective to build existing accounts than it is to add new ones. For example, before pursuing additional IP clients, a law firm should sell its existing IP clients on its other practice areas. The more fully the client is served by the firm, the fewer entry points are left open to competitors.
Finally, compensation systems must be easy to understand. If they are not, they will not drive behavior.
Flannery demonstrated the effectiveness of these methods with the following anecdote: One of his client firms set an incremental revenue goal of $800,000 over 12 months. Within 9 months, their incremental revenues exceeded $2.0M.
OPPORTUNITIES & PRACTICAL IDEAS
As a wrap-up, Ann and Bill included the following points:
Focus on key clients first
ROI is measured in dollars, not activities
Appoint a client relationship manager on each team as a point of contact
Teams must create client-specific or industry-specific plans
Think 2 years out
Find out what your competitors are doing, and do something different
Communicate a sense of urgency
Collaborate with clients and suppliers to develop services, products, markets and solutions
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| Bay Area legal marketing consultant, John Cosmides, is principal of The Cosmides Group and director of Barustors, a State Bar-certified referral service for business and corporate clients. John can be reached at john@barustors.com or at 415-957-1330. |  |