THE ISSUE
Law firms, like other organizations, need to grow their business and most firms have this as one of their top strategic issues. A well planned and executed internal business development program is a foundation needed to assure long term viability and increasing profits.
Business growth can come in many forms: through obtaining new clients or expanding into new practice areas, by hiring "rainmakers", through the establishment of ancillary businesses or by internal business development initiatives like cross-selling. Regardless of which avenues you choose, the foundation of successful business development is a culture of growth within your firm and among all of your professionals.
WHAT GETS IN THE WAY?
While the methods of business development may be obvious to all, getting attorneys to execute any of these activities is like trying to move a mountain.
First, attorneys simply aren't always well-trained to engage in business development. Second, and more importantly, the typical law firm culture does little to encourage business development conduct and resulting culture. Most organizations have a culture which encourages conduct that, if properly executed, will lead to promotions and higher compensation. University professors, for example, need to publish or perish. For attorneys in most law firms, billable hours most often are the key to personal success within the firm. This single-minded focus is ingrained into the minds of all young attorneys. For these young lawyers, and, indeed, even most senior attorneys in the firm, business development is low on the list of priorities. In fact, the focus on billable hours is worse than neutral. It affirmatively works against business development efforts like cross-selling, increasing leverage or engaging in other business development efforts.
WHAT CAN BE DONE?
There are many things that a law firm can do to grow its business, both with respect to existing clients and new clients. While there is some truth to the old saying "do good work and the clients will come," those firms that combine high quality with a proactive approach to business development are the most successful. This means establishing formal business development and cross-selling programs, such as cross-practice group teams to expand on the services that you are providing to existing clients. Business development should be a topic at every management committee meeting and discussed at every annual attorney review. Even the most junior attorneys should be required to be active in the community and participate in activities outside the firm that put them in contact with potential buyers of legal services.
Of course, like anything else, if you want to encourage a certain conduct, the key is rewarding its success. Law firms that want growth need to train, encourage and compensate their attorneys to achieve that goal. This means looking at more than personal billable hours. A new approach, with credit given for activities that lead to growth of client base and business development, will make attorneys more willing to do what is necessary to reach the strategic goals of the firm. This shift in emphasis can be done within the context of your existing compensation plan.
SEIZE THE OPPORTUNITY
This is admittedly a scary time for lawyers. Law firm management is afraid of an environment of shrinking revenue and high fixed costs. Partners are afraid of clients who are cutting legal budgets to the bone and demanding more for less. Junior attorneys see and read about the layoffs occurring all around them and worry if they will be next. The good news is that everyone at your firm is paying attention, and that provides you with an opportunity. While it's easier to hunker down and just ride out the storm, the far wiser course is to seize this opportunity and re-energize your firm with a new focus on building your business. Smart business people know that laying the groundwork for the future is as important as executing well today.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
