The best clients may or may not be the biggest clients or the most profitable clients. For my corporate/business practice, the best clients are the ones that value my services and want to build a long term relationship. So how do you find clients that value legal services? How do you build long term relationships?
When I first started practicing law, I had this image that business development meant putting on my sales and marketing hat, heading out to some networking event, and then rounding up a bunch of great new clients (all wearing suits and ties with $100 bills spilling out their pockets). I quickly learned that it seldom, if ever, works like that. In fact, when I try "selling" my services to new clients, it usually doesn't work at all. So, how do you get new clients? Where do you find them?
Start by assessing whom your best clients are. As recommended by Jim Hassett in his new book Legal Business Development, you must first build stronger relationships with your existing clients, before trying to generate new clients. Think about which clients value your legal services the most and which clients you enjoy working with you the most. Then, invite your best clients to go to an "appreciation" lunch and ask them why they like your services. Were you right?
Also, think about which clients don't value your services very much and which clients fail to understand what you really do. Think about those clients that are difficult to collect fees from or who are trying to get more than they are paying for. Every once in a while, I get a client that has read Rich Dad, Poor Dad and believes that "money is power." Those are the clients that I have come to realize detract the most from my business. The more I weed out the bad clients, the more I begin to attract the best clients.
Clients will not hire you unless they develop some kind of relationship with you. It may be a real relationship or it may be that they just identify with who you are. In Seth Godin's book All Marketer's Are Liars , which ironically is a book about telling the truth, he says that you have to be authentic. For me, being authentic means acknowledging that I primarily represent entrepreneurs and investors of early-stage ventures, not Fortune 500 companies, and I have the practical experience of having actually owned and managed a software development business. Clients respect it when you give them a clear picture of who you are and what you do rather than pretending to be something bigger.
Developing relationships with other people requires more than just telling the truth. As business development coach, Stewart Hirsch, says "it's not just about you." Whether it is a potential client or a referral contact, you need to focus on how you can help the other person. That way you can start building the relationship. Think about how you and your whole business model can facilitate and improve client relationships.
As my long time (9 days) readers know, I have been considering various pricing models. The so-called "alternative billing" models seem to be generating a lot of buzz lately (e.g., Gruntled Employees, LawBiz, The HR Lawyer's Blog), but I'm still wary of going to anything radical like an all "fixed-fee" model. The process of billing on a "fixed fee" basis all the time means sending an invoice to the client every time a new issue comes up or a new document needs to be drafted. The problem is that very quickly the "fixed-fee" creates a disincentive for building a strong relationship with the client. Fundamentally, high-value relationships are based on trust. If the lawyer doesn't trust the client, or the client doesn't trust the lawyer, the value of that relationship will be very low and the client will likely move on to the next lawyer that comes along.
So, my advice is take a client or prospective client to lunch. Ask them what they value most in their law firm, and find out how you can be of greater service to them (whether as a lawyer or as a friend).
What makes your best clients the "best"? How do you go about attracting new ones?
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7 comments:
I think that your marketing advice is terrific, and I particularly appreciate the references to other sources.
However, is seems to me that attending certain types of networking events, or events where networking is part of the program, has to be part of the process of building a new practice, as a way to get in front of new people; and perhaps to a lesser extent, of maintaining a mature practice.
Great point! Networking is an important component to business development. I spend a significant amount of time developing relationships with lawyers and other professionals. It helps to generate new business and serves as a resource that improves the quality of practice.
Developing a client base is complex, and it will also vary with the type of practice you have. The overwhelming majority of clients that any law firm will get will come from referrals. (Unless the firm is engaged in aggressive advertising, then you will obviously get many "cold calls.") Allen is certainly correct that attending events exposes you to clients, but my experience has been that the "better" referral is from either the existing client who speaks from personal experience, or from another professional who has also developed a level of trust.
And what about attracting corporate clients. I have difficult in that. Corporate clients (even starters) seems to like more big law firms rather than independent lawyers. I'll appreciate your thought over this.
Interesting question...I think it depends on what type of legal services the client needs. First, not all corporate clients are big companies. Many corporate clients start out as small businesses and look for attorneys that specialize in small business. Second small firms may have certain specialties not offered by big firms. Third, big law firms tend to have more overhead and charge as much as double or triple the rates of small firms. Cost alone is often and incentive to retain small firms. Fourth, small firms may provide more personal service or be more responsive than large firms. Fifth, technology creates new opportunities for small firms to respond more quickly to market changes and offer new types of services. One advantage that big law firms have is that they provide "one-stop shopping." However, with a strong outside network of attorneys even that advantage can be overcome by the small firm. Long and the short is find out what your clients want and then provide it. Don't worry about the size of your firm.
Yes, basically you are absolutely right. But the problem is that no matter how hard I try to attract those "starting businesses", at least here in Bulgaria, where I am based, starter businesses seem to trust more in the "corporate image" of the bigger law firms. They even don't consider the flexibility of the small law firm. They think "the higher are the fees, the more reliable are the services". I don't know if that is the situation in the US too.
We see that in the US as well. There are many clients who think the higher priced law firms provide better service. First you can address that concern by building a strong external network of attorneys. That is why I started the Business Lawyers Network (www.lexpertise.com). The network has over 150 lawyers, almost all of whom I have gotten to know personally. And rather than requiring that a client use a particular lawyer like they do in a big firm. I offer the client 3 or 4 lawyers that they (or I) can choose when a specialty (employment, tax, IP, litigation, etc.) is required. In the US 50% of lawyers are solos and over 75% work in firms of less than 20 attorneys.
Regardless of your firm size, there are always some clients looking for value and, therefore, willing to work with a small firm that is more reasonably priced and responsive.
And one piece of good news is that as the economy weakens (as it is in the US), clients will look for more value in legal services and seek out smaller firms will lower overhead and lower fees.
Given the way the economy is going, my suggestion is to position yourself for future opportunities. Start by offering to provide backup to bigger firms (or other small firms) today. This will help build your network. Then look for clients that value specialized services at reasonable rates. The more you define your specialty and look for clients that appreciate your service, the easier it will get.
As we say in the US, "just my 2 cents..."
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