Larry Bodine Law Marketing Blog : Law firm marketing, legal editor, legal marketing, attorney marketing, business development, marketing consultant, legal consultant, business development

One of the very best ways to get new business is to be on the board of directors of a non-profit organization.  I know, because it's certainly worked for me.

Debra M. Paine, the Executive Director of the Arts & Business Council told the Southwest Chapter off the LMA that lawyers are highly desired on boards.  You'll be viewed as a good corporate citizen, you become involved in your community, and you can network with other business leaders who are on the board.

Boards love to have lawyers as directors because they're smart, industrious and good organizers.  For lawyers, it's the easiest way to meet CEOs and business owners.

"When you're on a board, money follows," Paine said.

It's true. I was on the board of my local humane society when it was named in a will to receive $1 million.  The next thing I knew I was working with executives from major banks, investment brokers and prominent attorneys who helped me set up a foundation and endowment.  All I wanted to do was pet the puppies, and I got a key to enter the kennels whenever I wanted.

Now lawyers can get training on how to be a good board member and get matched up with a board position. The Arts & Business Council runs a "Business on Board" program," where for $1,000 they'll teach you about getting clients from a board, leadership skills, fiduciary duties, ethics rules, and succession planning.  The three-day courses are in Philadelphia, Boston, Cincinnati, Chicago and Phoenix.

Trainees are highly sought-after. For more information contact John Alecca, Director of Marketing, of the Arts & Business Council of Greater Phoenix at 602.364.7453 and jalecca@artsbusinessphoenix.org.

After I listened to Dr. Rob Britton, Adviser to the Chairman of American Airlines, I realized that the legal profession is a lot like the airlines:

• They are undifferentiated industries.  Both must work to get out of being a commodity to corporate customers. (Sorry, but many general counsel feel that most law firms are interchangeable.)
• Both are regulated industries.  Law firms are a closed guild that regulates itself, but there are still those ethics rules to obey.
• Costs a big driver in profitability.  For both industries, personnel is the #1 cost.
• Price is a key driver.  Whenever I ask partners what objections they run into on sales calls, the first thing they they say is, "the clients think we are too expensive."
• What the customer is buying is generic. An airline seat is an airline seat.  To corporations looking for a technical expert, a lawyer is a lawyer.  People refer to "the airlines" as a monolithic entity; people similarly refer to "the legal profession."

Here's what American Airlines did to differentiate itself, and how law firms can apply the techniques:

• Packaging and cache make all the difference.  For example, lipstick is a commodity, 80% of which is made in a single factory.  It goes into a simple tube, is labeled Maybelline and is sold at Wal-mart. The identical lipstick also goes into a fancy package, is labeled Loreal Paris and is sold at Nordstrom.  Packaging for a law firm is in their Web site, advertising, offices and direct mail pieces. Good packaging creates a cache.
• Clients buy because of emotional reasons.  For American Airlines the tagline is "we know why you fly," illustrated by a father hugging his son.  For law firms the tagline would be "We are the safe choice," "We're the firm for bet-the-company cases," or "Call us when you can't afford to lose."  Safety is why corporations hire law firms.
• Start a frequent-flyer program.  It's the most effective sales technique American Airlines has.  Special customers also get to use the fancy Admirals Clubs in airports.  Law firms can also create loyalty programs, by building client teams around "crown jewel" clients and making certain that the lawyers are business counselors, not just legal advisers.  Law firms can also create a "first class section," by spending lots of time off-the-clock with the clients.

On average, law firms experience a decline in billable hours from existing clients at a rate of 1% a month, according to a new study by Redwood Analytics. Eventually many good clients leave, switching to another law firm.

Happily, research shows that law firms can identify clients that are at-risk of leaving, and that firms can control whether they stay.  Here are the four markers that identify whether your firm is likely to retain a client.  This client:

1. Provides the firm a large amount of legal work.
2. Has a mature, established relationship with the firm.
3. Sends the firm work in more than two practice areas.
4. Has more than two firm partners significantly involved in the management of the client's matters.

No. 3 and 4 are the key indicators.  Firms that successfully cross-sell clients are going to keep them.  On the other hand, firms that allow partners to hoard clients and keep other partners away are likely to lose those clients.

The more varied the legal services provided to a client, the less likely they were to leave. Less than 15% of clients using a firm for three areas of law are likely to leave the firm within two years.  Less than 5% of clients that had retained the firm for four or five areas of law are likely to cease using the firm.  On the other hand more than 35% of clients that used the firm for only one area of law left within in two years.

For the full story, see "Client Attrition Analytics: Firms Can Control Whether Clients Stay or Go."

It's true that in most law firms, only 10% of the partners generate 80% of the new business. I've been fascinated why this is so.

Perhaps it's because only 10% are natural rainmakers, I thought.  Perhaps it's because 90% are content to be service partners.  Perhaps because most lawyers don't know how to generate new business. Then I realized the only explanation why only 10% generate most of the business:

Control.

Look at it from the perspective of Gengis Khan. He who has the clients runs the firm and sits on the management committee.  He who has the clients has power to dole out assignments to others, who rely upon him.  He who has the clients makes everyone else expendable.

For example, I know of a 50-lawyer firm in New York where only 5 lawyers have the clients.  Everyone at the firm wants to please these 5 rainmakers.  Other partners are essentially senior associates, who can leave without concern that they'll take current files with them, because they have no clients of their own.

The 5 rainmaker-Khans don't want anyone else to develop new business, because it would erode their total control.  The rainmakers don't want anyone questioning or challenging them, or demanding a bigger cut of the revenue pie.

The Khans are not concerned that the younger generation can't develop new business.  The rainmakers plan to retire and take their earnings with them.  The Khans want the firm to be in business only long enough to pay their residual origination fees.

This may seem harsh.  But human nature isn't always pretty.

Do you remember the last email you got? Probably not.  We all get dozens or hundreds of emails per day. Each one blurs into the next.

But I'll bet you remember the last personal handwritten note you got.  It came in a hand-addressed envelope and had a personal message inside.  You were touched and may have even kept it for a day or two.  It got to you and you remembered it.

A handwritten note is a powerful business development implement.  You should have a box of them sitting on the corner of your desk, in a spot where nothing will get piled on top of it.

Go out and buy your "signature" set of thank-you cards -- ones that people will identify with you.  I use cards from Palm Press that display a pile of one million dollars on the outside.  Inside it says "Thanks a Million."  It reminds recipients that I helped a Chicago law firm generate $1,000,000 in nine months.

Use these cards whenever you get a referral, when you get new business from a client and after a meeting with a target client. It is absolutely necessary that you handwrite the address on the outer envelope, and handwrite the message inside.  Use these notes whenever you want to make a positive and lasting impression.

Why do they work so well?  In a world jammed with podcasts, email, direct mail, telemarketing, TV commercials, advertisements on every possible surface -- the personal touch stands out.

The question arose on the Law Marketing Listserv, "what makes a good lawyer?"  Jim Durham, the CMO of 850-lawyer Ropes & Gray identified what makes a great lawyer:

• Good lawyers return phone calls reasonably promptly; great lawyers are always available and accessible to their clients. Great lawyers don't just respond when their phone rings, they make other people's phones ring.
• Good lawyers know the law; great lawyers know the law, but they also know and understand the client's business. Great lawyers know what makes the client successful and they understand the client's preferred form of communication.
• Good lawyers get the legal work done. Great lawyers get the work done too, but they do it and give practical advice in the context of knowing the client's business.
• Good lawyers do legal work effectively and efficiently. Great lawyers look for ways to make legal services more valuable to clients. Great lawyers give clients more than they pay for.
• Good lawyers treat the client professionally. Great lawyers personalize the relationship by recognizing the unique styles, interests, and needs of the individuals with whom they work.
• Good lawyers do their best to keep promises about when work will be completed. Great lawyers do what they say they will do, and get it done when they said they would. (In other words, good lawyers try to deliver, great lawyers deliver.)
• Good lawyers are reasonably comfortable in most settings. Great lawyers project confidence, but not arrogance, in any setting. Good lawyers attend meetings; great lawyers arrive early-fully prepared. Good lawyers are present at meetings; great lawyers are a real presence in the meeting.
• Good lawyers are thought of as "capable," and are expected to do a good job. Great lawyers own the client's problem, and engender a belief that they will do everything possible to help the client succeed.
• Good lawyers care about clients. Great lawyers are loyal to them.
• Good lawyers accept feedback when clients offer it. Great lawyers seek meaningful feedback from clients and act on it.

For more detail, get Jim's excellent book: "The Essential Little Book of Great Lawyering" for only $11.95 at http://www.lawmarketing.biz/store/product.asp?dept%5Fid=9&pf%5Fid=289.

There are six mistakes that we lawyers make when building their reputation that turn us into the Invisible Man.

1. Expecting good work alone to speak for you. That worked in 1957.
2. Being generic: "We're a full-service firm."
3. Expecting referrals and introductions. You have to seek them out.
4. Focusing solely on getting your name out.  You'll get attention, but not new work.
5. Expecting marketing to be a part time job. Marketing must be baked into your practice.
6. Thinking that prospective clients care about you. What they care about is their own problems.

I've edited a live Webinar presentation into a sound-and-audio recording that shows you how to avoid these mistakes.  Turn up your speakers and visit http://www.sagelawmarketing.com/Webseminarexcerpts/0519pt1.html. (Just ignore the talking and coughing in the background.)

When asked what areas of their firms will get the most additional investment in 2007, the top three responses from law firm chief operating officers were:

• Business development/sales (49 percent)
• Technology (43 percent)
• Professional development (40 percent)

"It looks to me like the first and third one add up to more marketing training," said marketing consultant Jeffrey Forbes - The Client Doctor.

Those findings are from a small survey by Law Firm Inc. of the professional executive directors or as they're now known, the chief operating officers, of Amlaw 200 law firms. 85 of the 200 law firms COOs completed a 27-question survey. (Later this year they will survey chief marketing officers.) 

Other findings:

• 49 percent of the respondents indicated that evaluating a possible merger was among their top three priorities.
• 46 percent indicated evaluating practice group performance.
• 41 percent indicated making greater use of business intelligence.

I see 2007 as a great year for experts in strategy and sales.

My friend Mark Beese has a great post about vanity directories like "Superlawyers" and "Best Lawyers in America"  in a post titled "Supercalifragilistic Lawyers."

"I know of no research that shows that clients find attorneys through these directories," which play to the lawyer's ego, says Mark, Marketing Director for Holland & Hart in Denver.  In fact, the ethics rules in New Jersey ban these two directories by name.

On the one hand Mark says, "Superlawyers, Best Lawyers in America and other publishers should have the right to publish what they want and how they want.

So he calls for a national Angie's List for lawyers.  "If you want reliable information on the "best lawyers" based on criteria that is important to legal consumers, we need an "Angie's List" of lawyers.  "'Angie' solicits feedback from people who use contractors for home repairs.  Contractors don't pay and can't lobby to be on the list.  Only the people who use their services and report on quality AS THEY DEFINE it."

It's a great idea. Why not? Survival and success rates of particular hospitals and physicians are public information.  Why not lawyer success rates.

"Such a feedback and ranking system, if done right (which will not be an easy task, by any means), would quickly replace the vanity press in the legal industry."

Right on. 

According to the latest research by BTI Consulting Group in Boston:

• Among AmLaw 200 firms, the average budget was 2.5 percent of revenue in 2005, an increase from 2.3 percent in 2003. That worked out to an average $3.1 million. At AmLaw 100 firms, it was 2.2 percent, up from 2 percent in 2003; that corresponded to an average $9 million.
• AmLaw 100 firms dedicate nearly $56,500 per equity partner to the marketing budget.  For AmLaw 200 firms that number is $33,000+ per equity partner.
• According to the survey, in 2005 law firms had 31.9 attorneys per full-time marketer in AmLaw 100 firms and 35.5 attorneys per full-time marketer at AmLaw 200 firms. Put another way, AmLaw 100 firms averaged 8.7 partners per full-time marketer and AmLaw 200 firms averaged 13 partners per full-time marketer.

The title of the study is "Benchmarking Law Firm and Business Development" and appears in the current issue of Strategies magazine (viewable by LMA members only).

Anyone who has worked to get a high search engine ranking or has launched an AdWord pay-per-click marketing campaign knows there is only one game in town: Google.

Experts who optimize Web sites say that Google is a beast to work with -- it's a Fortune 500 corporation that is No. 1 in its industry with $6 billion in annual sales and 5,700 employees. Montreal's Gab Goldenberg of Bookworm-SEO, a search engine optimization service, summarizes the reasons in a great post "Google Sucks My Chia Pets."

10) Google needs to adjust its TrustRank algorithm.  It's giving too much weight to old domains/seed sites. Spammers are dominating the 'buy Viagra' search engine results pages: .EDU sites keep getting hacked, having pages with links or redirects sending visitors to pseudo-pharmacies.

9) Google's tech support teams have a tendency to want to copy-paste the FAQ in their email responses. Thanks, I can read the Q&A myself, Mr. Google-tech-support-bot. If I'm writing you, it's because the FAQ wasn't satisfactory.

8) Google serves all those useless, generic, bid-increasing eBay ads. Plus, it enables people to do arbitrage on AdWords traffic -- the simultaneous purchase and sale of the same commodity in different markets to profit from unequal prices. This hurts the little guy trying to make a buck on being a Google affiliate if you're going to serve all those eBay and arbitrage ads? It's not the small affiliates that suck, Google, it's your hypocritical policies.

7) Google places extreme trust on Yahoo paid links in the Yahoo directory  -- but then it tells webmasters to put "rel='nofollow' attributes" on their paid links, so those links won't get any credit when Google ranks websites in its search results. If paid links are such a concern, Google shouldn't get editorial-review and paid links confused.  It should just develop another standard and ask Yahoo to use them too.

6) Google's expansion into so many different markets and control over such a wide array of personal information is downright scary. And the fact Google has been willing to work with China in censoring information Chinese people may want to find doesn't comfort me one bit.

5) Google AdWords doesn't actually fulfill its promise of letting the little guy compete. Before embarking on an AdWords journey, one has to scour forums for information on targeting, match types, bidding strategies etc. The result is that the main AdWords buyers are eBay, spammers, arbitragers and big companies. The great equalizer it ain't.

4) On a note related to #6, Google keeps on buying out the little guys -- like YouTube, Urchin web analytics and Applied Semantics domain-name company. Reminds me of another big tech company that's infamous for the anti-trust lawsuits it's been hit with (hint: its ticker is MSFT).

3) Google claims to be so concerned about keeping spam out of the search results, yet it lets so much garbage be advertised on AdWords. I can't even count the Clickbank get-rich-quick scams people are hawking through your Google AdWords ads (ironically, the scammers present themselves as get-rich-quick review sites that prevent people getting scammed). It's 2007 Google; Western society gave up "buyer beware" in favor of consumer protection last century.

2) Google's Adsense for content-matching algorithms are awful, particularly in Gmail. The ads you've served me with when I check my mail are completely irrelevant, making for a sucky user experience and generally sucky "researching mode" rather than "buying mode" leads when people click.  Anyways, before you keep buying out the Jotspots of this world (a wiki hosting service) Google, make sure the ads you can serve on them will be relevant.

1) You're big, arrogant, and your algorithms are such a mess that you're likely to rank this post #1 for "Google Sucks" by the time I'm done promoting this.

With irony, Gab Goldenberg notes that her post "10 Reasons Google Sucks My Chia Pets" has a No. 12 Google ranking.

Here's a golden marketing opportunity for mid-size firms with offices outside New York City: the going rate for a big-firm first-year associate in New York exploded to $160,000!  That's $667 salary per workday.  Adding in overhead, the total cost of these associates is at least $2,000 per day. 

+700-lawyer Simpson Thacher & Bartlett announced the new starting salary two weeks ago, and 40+ mega law firms followed suit.  See the "The Pay-Hike Parade" for the details.

The giant law firms are boosting their rates to pay these breathtaking salaries.  A client of mine who is the President of a $650 million company, said his +1500-lawyer Chicago law firm was already charging his company $500 per hour.

"When I saw the announcement about the raises, I said 'Oh God," Michael Roster, executive vice president of World Savings, a subsidiary of Wachovia Corp., told the ABA Journal.  With the salary raise, Roster said law firms will put more pressure on associates to bill, and partners may have more incentive to charge clients for associate learning time.

This creates a huge opportunity for mid-size and boutique law firms.  Not only can they offer better rates but also more specialized expertise.  Corporate Counsel are going to be a looking for a 20-lawyer trial boutique in Minneapolis -- which does nothing but work in court-- as opposed to the litigation department of an expensive New York megafirm.  Litigation accounts for 34% of overall corporate legal spending.

Corporations spent a median of $1.8 million on outside law firms, with small companies (less than $100 million in revenue) spending $525,000, medium companies ($100m to $1billion) at $963,500 and large companies (+$1 billion in revenue) at $5,177,000.

I predict a lot of these dollars will be going to mid-size and specialty law firms in 2007.

What value does your firm bring to its clients? It's a tough thing for lawyers to articulate.  That's because lawyers think the legal services they offer and practice groups they belong to.  But that's not how clients think.

It is NOT a value proposition to say that you:

• Can impeach the other side's expert.
• You can bury the other side with interrogatories for the adversary's  emails and depositions for all their executives.
• You can draw the case or transaction out for years.

These are legal results, not business results.  Here's what clients want:

• You will make the client more money.  (Think: stopping employees from hijacking trade secrets or getting rid of forces that are choking the client's revenue pipeline.)
• You will get the client's product to market faster. (Think: eliminating regulatory obstacles.)
• You will save the client money. (Think: making a problem go away fast or achieving efficiencies by taking over all their work in a particular area.)
• You will make their operations more efficient.  (Think: auditing their business practices and eliminating activities that create liability.)
• You will increase their market share.  (Think: your will find a way to make the deal go through -- you will not be a deal killer.)
• You will reduce employee turnover.  (Think: audit the client's employee handbook or set up a cafeteria benefit plan.)
• You will improve their customer retention.  (Think: rewrite the client's contracts to be more customer friendly.)

All this involves studying the client's business and learning how they make money.  Lawyers should inquire into how you can deliver the seven added values listed above.  That will be a value proposition that will create great clients who stay with your firm forever.

Check out the February 2007 issue of Marketing the Law Firm, edited by Betiayn Tursi, for an article on "Musical Chairs" among marketing professionals at law firms.

The salient points:

• Marketers are often poached by competing law firms. People change jobs for money.
• Marketers average a brief stay at law firms. The average tenure is 2.7 years.
• There is a tension between marketers and lawyers. Many lawyers don't understand marketing.
• On average, a marketing director earns $162,000, with large firms often paying more than $200,000. The chief marketing officer, a position that 34 Am Law 100 firms now have, averages more than $300,000.
• As non fee-earners, marketers are "overhead."  But the cost of losing a marketer will torpedo a branding campaign, business development training or upgrading a Web site.

LTN's example that says it all: Communications director Peter Columbus left O'Melveny & Myers for a position at Kaye Scholer. To replace him at O'Melveny, John Buchanan left his job at Heller Ehrman. To fill that slot at Heller, Patrick Bustamante left his post at DLA Piper.

Sure, marketers are expensive. That's because they're valuable. Don't lose yours by underpaying them or making them miserable.

Would-be presidential candidate Senator Joseph R. Biden Jr. of Delaware has shown us how to botch a brand rollout. Meanwhile, the predatory empire of Microsoft rolled out Vista to a warm response.  I learned the following lessons:

1. During a brand roll-out, don't talk about the competition. Biden engaged in "blabbering bluster" about a competitor (Barack Obama) and put a favorable spotlight on the competitor.  When Microsoft rolled out Vista, it didn't say that it was obviously copying Apple.
2. Word choice makes a big difference. Calling a competitor "the first mainstream African-American who is...clean..." is really obnoxious. You won't find any squirrelly quotes by Microsoft Chairman Bill Gates about minorities.
3. Communicate in a positive way.  Biden defended himself to reporters with a blaring TV in the background and a bad phone connection.  Then he explained himself on The Daily Show, a late-night cable-TV comedy show.  Darth Gates was on the same program earlier touting Vista, but amazingly, he came across as warm and funny.
4. Don't call attention to your brand's weakness.  Biden has a reputation for being "politically undisciplined."  His announcement proved it was true.  In contrast, Vista was presented as a secure operating system, overlooking the fact the Windows XP needed multiple patches to keep out hackers.
5. Don't give the media a chance to trot out your earlier mistakes.  Biden's fiasco gave the New York Times a chance to remind readers that he said in 2006: "you cannot go to a 7-Eleven or a Dunkin' Donuts unless you have a slight Indian accent. I'm not joking."  Microsoft glowed about Vista saying "The 'Wow' starts now."  The technology press picked nits about Vista but generally omitted mention of how wretched Windows Me was.