If we asked you what your ideal client base would look like in two to three years’ time, what would you say? Would it resemble its current form, or would it be different? Slightly different? Or radically so?
Often when we pose this question to lawyers, the common answer is that they hope their client portfolio will be very different to the current one. In fact, some refer to a ‘dream client portfolio’ that brings a better and more enjoyable quality of client relationship. So how can this be achieved? Can dream client portfolios become a reality or will they remain just that — a dream?
We estimate that many lawyers are spending a vast amount of fee earning time on work that is either unprofitable, that they do not like doing or that comes from clients where the relation-ship is not a wholly positive one. While many firms argue that this is ‘bread and butter work’ and vital to their survival, we often question the long-term impact of this approach.
If firms spend so much time on the wrong type of work with the wrong type of client, over time this will have a negative effect on their bottom line. It could also seriously damage their reputation in the marketplace. In contrast, we have seen firms define who they view as ‘the right kind of clients’ and what ‘the right type of work’ would be. By then concentrating their efforts on these clients, over time the firms concerned experienced improvements in turnover, profitability, client and also staff turnover rates.
So how can we win the clients we really want? The first step is to define our so-called ‘dream’. We may want to increase fee income by X percent or by Y number of clients. However, without deciding who these clients are and how we are going to gain their business, we are unlikely to be successful. We also have to be very brave. We need to stop any tendencies we have to say “yes” to every opportunity that comes along. Now is the time to develop our ability to say “no” in the nicest possible way, and concentrate on the business we really, really want to win.
Having then decided on the type of work we want to do, the level of fees we need, the industry sector we want to proliferate and/or the profile of the clients we want, we need to measure our aims to our portfolio as it looks at the moment. How far off from the dream is it? The gap we identify will guide us in deciding which clients need to be kept (and protected from competitor advances), which do not fit the dream and need pruning and how many new clients are needed.
With clients that need to be protected, the more successful law firms establish a key client plan. This sets out the objectives and actions needed to maintain regular contact with all the key people within the client. It ensures we fully understand the client’s industry, their business, and above all what they want from our firm. It can also guide us on the activities needed to build the relationship. With the clients that do not fit our dream portfolio, we should not be afraid to prune them and devote our energies and resources to those that do.
Target lists are very effective at identifying and then helping to build new client relationships. A word of warning though: beware the ‘go forth and multiply’ command. Being told to bring in extra business (and quickly) creates panic and a scattergun approach to business development. Scattergunning assumes that if we get hold of massive lists and try and tell as many people as possible about us, then we will probably win something.
A more targeted approach, however, where lawyers build and demonstrate an in-depth knowledge of their target prospects, usually generates a greater success rate and longer client relationships. We would suggest starting with about eight target clients and replenishing the list as necessary. To make the process as painless as possible, you should target prospects you really want to win. We have found that lawyers are much more successful at winning clients when they genuinely interest them. In this case,the lawyer’s enthusiasm and interest becomes obvious to the client — it makes their advice and approach that much more valuable from the client’s perspective.
It is all very well listing the prospects we want, but just because they meet our criteria does not mean we meet theirs. Some prospects may also be harder to win than others, so we need to prioritise our energies on who to target and when. Scoring the prospect against a ‘triggers and filters’ selection criteria will help. Triggers are those factors that indicate it may be timely and appropriate to approach a prospect organisation. For example, the prospect may be known to be acquisitive or they may be experiencing change in management/ownership. If there are only a few or no triggers in place, now may not be the right time to approach the client. In this case, we should keep the prospect on our radar until an appropriate trigger crops up.
Filters are those factors that make it easier to approach a prospect and make us question whether we really want them. For example, the incumbent adviser is too big/small to serve their needs or we have a track record in their market.
An information gathering exercise helps the most successful law firms understand their prospects’ businesses and competition, the current business issues and key industry developments. The exercise should also start to identify the key people in the prospect we need to convince and what they will be looking for.
As we did with existing clients, we can now create a plan on how to target and win these new clients. The plan will be guided by our under-standing of the prospect. It will highlight the firm-wide marketing activities that are needed and also guide lawyers on the individual activities they need to undertake to build the relationship.
A typical plan comprises objectives that need to be achieved and activities that are to be under-taken. It also addresses the timescales these are to take and the people involved. Financial and budget requirements are addressed too and measurement points are built in to review progress.
Often the timescale between targeting and winning a client can be very long; but never lose sight of the dream. We passionately believe that many law firms are working flat-out for the wrong clients. We also believe that a targeted approach by fee earners will make dream client portfolios a reality and make these firms more successful.
- The circle of success Published 5th June 2008
- Holding onto your Key Client Relationships Published 20th July 2009
- How to reel in the right fee Published 5th November 2008
- What makes the perfect pitch Published 31st May 2008