A Strategic Approach to Legal Business Development
Many of us treat legal business development the same way we do bathing suit season—we work hard at it when we need to. When spring break approaches we hit the gym, and when October rolls around we start raiding our kids’ Halloween candy. When we’re slow at work, we ramp up our business development efforts, and tamp things down when business pick up. Legal business development becomes a rollercoaster; a cycle of ups and downs that creates stress and uncertainty.
There’s a better way to approach legal business development, and it involves consistency of effort over the long-term. If you’re consistent with business development as a lawyer, you’ll have a steady pipeline of new business opportunities. You can be more discerning about the work you take on. You won’t feel pressured to take on clients that don’t fit your practice. You won’t have to ignore your gut instinct that an engagement could lead to trouble because you need the revenue. You’ll have more success at the work you do pitch because you’ll come across as confident and measured, rather than desperate.
Sounds good, right? Here’s how to do it.
Understand What You Need, so
You can Understand What you Need to do
The problem with a sporadic approach to business development is that lawyers often overreact and overcorrect when times get slow. They engage in a bluster of business development activity that brings in work—often more work than they can handle. So they stop all business development activity to focus on the work they have. Then...you guessed it. The cycle repeats.
A lawyer who finds himself riding this up and down cycle typically lacks an understanding of what sustained level of business development activity is required to keep his plate full, and the plates of others full, as appropriate, on a consistent basis. Here’s what he should do instead:
Start by understanding his ideal client. It’s far easier to sell if you know who you’re selling to.
Then define his sales process. What is his buyer’s journey? What process is required to move a prospect to a paying client? If he meets a prospect at a networking event, what’s next? Is there a free initial consultation, followed-up by a proposal?
Once he’s defined his process, he must understand conversion. In other words, how many prospects take him up on his offer for a free consultation? Of those who participate in a free consultation, how many request a proposal? Of those who request a proposal, how many are converted into clients? Sure, every client's journey is different, but if you pay attention to conversion, patterns will emerge. And when it comes to crafting a sustained business development strategy over time, it’s important to map your actions to the best data available. Otherwise you’ll just flail about
Now that he has some data (even if it’s not perfect—and in this process we’re shooting for “better” not “perfect,” at least at the start), he can dig into it. Let’s say that once he’s analyzed the data, he finds that 50% of the prospects he meets agree to initial consultations, 40% of those he meets request a proposal, and 20% of those who request a proposal become paying clients. That means that, for every 100 prospects he meets, 4 become paying clients. He should then analyze how many new clients come in via other means each year, such as by referral or directly through his firm’s website.
Once he has this data at his disposal, he must determine another metric, which is the value of each client. How much money, on average, will each new client spend? For the sake of keeping the math easy (I’m a JD not an MBA!), let’s say each new client accounts for $5,000 in revenue.
Finally, he must determine the amount of revenue he wants (or needs) to generate from new business. To keep the easy-math theme going, let’s assume that number is $250,000.
Once a lawyer has done this diligence, he can work backwards and craft a legal business development action plan that will get him to his goal. In this case, we’ll use the following assumptions:
New Business Revenue Goal: $250,000
Number of referral and direct new clients annually: 25
Revenue from referral and direct new clients annually: $125,000
This means that there is $125,000 gap that the lawyer needs to fill through new business development to get to his goal. He needs 25 new clients to reach his objective. As we know from the data above, only 4 out of 100 prospects becomes paying clients. Accordingly, he needs to meet 625 prospects to convert 25 into new clients. Assuming he works 50 weeks out of the year, he needs to meet 12.5 new people, on average, per week. That breaks down further to meeting 2.5 new prospects, on average, per day.
Armed with this understanding, the lawyer can then put in place a daily practice to get himself, and his personal brand, in front of the right amount of people so that he can meet his goal. Instead of haphazardly reaching out to large numbers of people at sporadic points in time, he can strategically touch base with small numbers of people on a daily basis.
He knows the numbers, so now he can create a plan. And if he’s smart, he’ll take a few simple steps to compound his success. He’ll take a hard look at his sales process and make incremental changes that lead to big improvements, and better conversion, over time. He’ll create valuable content and distribute it via social media—he can’t be in more than one place at the same time, but his content can scale. Instead of focusing only on developing new business, he’ll look for opportunities to increase revenue from existing clients.
Legal business development is a numbers game. You need to be out there, active, and engaged. You can’t just pop-up periodically on someone’s radar screen and expect them to engage with you when they haven’t heard from you in six months. It’s the steady consistency, not the episodic intensity, of legal business development effort that matters.
As author and marketing expert Seth Godin once said, “The thing is, incremental daily progress (negative or positive) is what actually causes transformation. A figurative drip, drip, drip. Showing up, every single day, gaining in strength, organizing for the long haul, building connection, laying track — this subtle but difficult work is how culture changes.” It’s how legal practices change, too.
Want to eliminate the topsy turvy uncertainty of legal business development? Adopt a more strategic approach.
Could you use a bit of help in defining your target market, and positioning yourself as an expert with clients, potential clients and referral sources within a niche?
I am currently accepting applications to my Elite Lawyer Coaching program, which involves one-on-one strategic consulting and coaching to help lawyers set and reach their business goals in 2018. If you’re interested in dramatically growing your practice this year, contact me at 313.432.0287 or jay@hcommunications.biz to set up a free consultation to discuss how we can work together to define clear goals, create a specific plan of action, and ensure accountability as you work toward achieving your objectives. Let’s chat soon, as I only have a few slots remaining for new applicants.Also, please check out my new book, The Essential Associate, which is now available for purchase.