In the final part of this 3 part series, we continue to discuss the tools that support business development.
Research is invaluable. It keeps you up-to-date with what is happening in your clients' world and make you sound informed on the issues important to them. Research can inform you on their current priorities and what their needs will be over the short, medium and long term. You can then speak to this in meetings and in tenders and credentials.
There is a plethora of good information on the internet including industry reports, company annual reports and news items. State libraries are also a good source of free industry information. These sources will give you an insight into the industry players, trends, growth rate, basic statistics, current performance, challenges, outlook and more.
This kind of research can also help identify new opportunities. For example, if you do a lot of work in the not-for-profit space, you can easily find out what other not-for-profits exist in your location and then ascertain if you know anyone who works there.
Spending a bit of time on LinkedIn will tell you about your clients' professional backgrounds such as their qualifications and where they have worked previously and any volunteer work they do. This helps you find common ground and can break the ice.
Financial analysis is used in business development for a number of purposes.
Firstly, the client fee history can be used to guage whether the client is stable or in growth or decline, or perhaps their fees are cyclical. Also, to provide an early warning system; if the client is in decline, why?
Financial analysis can be used to identify the firm's Top Clients, although this should be done in consultation with the clients' relationship partners, as a client that provides a good portion of fees may already be giving all their legal work to the firm so there is no point including them in a business development program.
Gaps in the firm's service offering to a client can also be identified using financial data. For example, if you're providing commercial and property services only, does your client also need construction, planning or employment advice as well?
Where are the gaps? What other areas of law might this client need?
It's also possible to identify gaps in the firm's market coverage using financial analysis. Who is the firm already acting for in a particular industry? Then you can research to find out who the other players are; they are your potential targets.
Financial analysis also assists in the decision making for the tender process. If a client invites you to tender, you can find out how much work you have done for them previously and how profitable it has been and whether it is worth the investment of billable time to tender. It also informs what fee or discount strategy you may use.
There are a number of ways to cross-sell services in a law firm.
A lawyer could introduce a new service to one of their current clients. The new service will be provided by them. This is the easiest level of cross-selling as it only requires existing relationships. For example, a property lawyer is doing a client's conveyancing and introduces their leasing services.
One of the lawyers can also introduce a new service to a current client. However, it will be provided by a different lawyer at the firm. For example, the property partner introduces the client to the town planning partner.
A lawyer can introduce an existing service to a new person in a current client's organisation. For example, the firm is doing the property law work for one property manager and introduce the service to a new property manager at the organisation.
Lastly, introducing a new service to a new person in a client's organisation provided by a different lawyer. For example, the firm is doing property work for the property manager and introduce employment law work for the HR manager.
Some firms implement cross-selling programs with targets. Partners will be given the challenge of introducing a set number of clients to other partners (where relevant) within a given timeframe.
A good CRM system, sound relationship mapping, market research and analysis provide invaluable support to this process.
The Tools are Inter-Related
The business development tools that have been discussed are all inter-related and are designed to support each other.
What is Achievable?
Obviously, large firms have significant advantages in business development. They have more resources to invest in tools like sophisticated CRM systems and have added assistance from analysts and knowledge managers. They also have a greater breadth of services which better supports cross-selling programs, industry spearheads and cross-practice initiatives. Large firms also have a greater number of institutional clients which support Top Clients programs.
However, smaller firms can take away some important tips including that sharing information leads to important conversations getting started between partners and between practice groups. They can use their financial data to keep track of what's happening with their key clients and identify potential opportunities as well. Identifying 3-4 prospects and working towards achieving these rather than trying to implement a complex business development program would be a productive and attainable approach.