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

In response to the bleak news about the economic prospects for the legal profession, smart law firms are training their lawyers to bring in new business.   A new survey by The BTI Consulting Group of Boston found that 85% of law firms offer formal sales and business development training to their lawyers.

"A rising level of new income solves all sorts of problems," said a law firm managing partner in California, where I'm conducting a one-year sales training program.

The special BTI report, "BTI’s Benchmarking Law Firm Marketing and Business Development Strategies, was released to members of the Legal Sales and Service Organization (LSSO), an organization I highly recommend you join.  According to the report, law firms are still devoting 2.1% to 2.6% of gross revenues on their complete marketing budget, including salaries.  This figure has remained constant for several years.

Big firms spend more: the average marketing budget for an AmLaw 100 law firm is $9.83 million, or $59,800 per equity partner. For the AmLaw second 100, the average marketing budget is $4.08 million, or $42,600 per equity partner.

Put another way, the average marketing spend per attorney (partners and associates combined) is $14,500 for law firms of all sizes combined.

Marketing budgets include many things ranging from salaries to business development to advertising and public relations. Focusing just on the business development budget, law firms budget as follows:

1. Client relationship development: 29%
2. Training: 18%
3. Consulting services: 9%
4. Practice-specific seminars: 8%
5. Public relations: 5%
6. Research: 5%

The chart below illustrates that law firms are focusing in the right place: getting new files from current clients.

This highlights three trends:

• Firms focus on getting to know clients better—a proven differentiator and business development tool.
• AmLaw101-200 firms invest in more training—looking to lawyers to develop more business.
• Mid-sized firms also leverage more outside resources such as consulting services.

Business development is the top goal for 43% of CMOs for this year, reflecting a major shift from the previous year when business development was the top goal for only 27% of CMOs.

BTI's report reflects 600 individual interviews conducted over a 4-year span, including more than 100 brand new interviews with CMO’s at the world’s largest law firms (55.0% of the AmLaw100 and 52.5% of the AmLaw200).

According to a report in New York Lawyer, the Partnership Council of 400-lawyer Thelen announced it voted to dissolve the firm. The firm expected to close on Dec. 1.

An early sign of trouble for Thelen Reid Brown Raysman & Steiner came last March, when the firm laid off 26 associates (which was 10% of their associates) and 85 members of its support staff, including members of the west coast marketing staff. In March the firm had 600 lawyers. Recent reports surfaced lately that top Thelen lawyers, including Chairman Stephen O'Neal was negotiating for a spot at to Howrey and rainmaking energy partner Ellen Bastier was on the cusp of joining Reed Smith

Thelen was an international AmLaw 100 law firm with offices in Hartford, Los Angeles, New York, Northern New Jersey, San Francisco, Shanghai, Silicon Valley, San Jose, and Washington, DC.

The news report says that about 60 lawyers could end up at Nixon Peabody -- which until recent weeks had been viewed as a potential merger partner for Thelen. "Was it a surprise today? No. Was it a surprise overall? Yes," a San Francisco associate told Law.com. "I mean, two years ago we were in a strong position."

"It's very disappointing, even though it was just a matter of time," said a legal secretary, asking not to be named. She will be at Thelen until the end of November, and said she doesn't know what's next for her. But even some partners don't know where they will end up, she added.

Thelen issued a press release saying there was no single reason for the collapse.

"The decision to dissolve the firm was precipitated by several economic factors, including recessionary pressures and numerous partner departures over the past year, both of which have negatively impacted firm revenues," the release said. "For the past several months, Thelen management has aggressively sought a full firm merger. Unfortunately, the most promising merger opportunity was derailed by conflicts, and all other full firm merger discussions terminated last week."

The news was another blow to the San Francisco legal community, which only a month ago saw the demise of century-old Heller Ehrman.

The firm, formed in 1924, merged with New York's Brown Raysman Millstein Felder & Steiner, but the marriage has since been widely viewed as problematic. Name partners Peter Brown, Richard Raysman and Jeffrey Steiner -- and more than 100 other Thelen lawyers -- have left this year.

"No partner in a San Francisco law firm will look at what happened to Heller and Thelen and not think, 'Will my firm be next?'" said Richard Gary, a legal consultant who was the chairman of Thelen from 1992 to 2003.

Does business development at your firm look like a Warner Brothers’ cartoon with lawyers dressing up as hunters, going out into the business forest and shooting at anything that moves? If your business development seems more about “wascally wabbits” than verified business leads, you aren’t alone.

However, if you practice premeditated business development, this year can be the very best in your career no matter what the economy is doing. 

Even in difficult economic times, there are opportunities galore. A recent survey showed that 60 percent of corporate clients were unhappy with their primary law firms. That's a chance for you to put their businesses into play.

There are also threats out there. Your firm's top 50 clients are on the target list for every other law firm, so make sure you have a very close relationship with your clients and that they are satisfied with your work.

Your individual sales plan

If you really want to boost the revenue you bring in to your firm by $75,000 to $100,000, you must have a written plan to devote 100 to 200 hours per year to business development. One hundred hours a year is only two hours a week, and any lawyer can find the time to meet referral sources for coffee, take clients for lunch, or attend a trade association meeting after work.

Your aim is to develop or deepen relationships with clients because new business comes in person. Your plan should be filled with face-to-face meetings with clients and targets. The firm's Web site, brochure, articles, newsletters, public relations, direct mail marketing, announcements and press releases will generate leads for your sales effort, but you have to go out and make the sale.

Elements of your plan

Page One

Page one of your individual sales plan should be a list of your top ten clients. Set a date when you will visit clients at their premises and make plans to get to know as many people there as possible. This is the low hanging fruit: clients already trust you, send you work and mail you checks.

Before you schedule that first on-site visit, carefully consider the following points.

Page Two

Page two of your plan should be a list of your top ten referral sources. You need to meet with them in person, too. You want to be clear on two things:  that they know what kind of work you are looking for and that you understand what sort of referrals they want in return.

Page Three

These two pages are generally enough to fill up a year's worth of sales effort. But you should also write a page three, which is a list of targets, executives and general counsel whom you already know but who are not clients of the firm yet. Your goal is to meet them, strike up a business conversation and discover how your firm can serve them.

Of course, business development should not be a solo effort.  Your  firm will generate much more revenue if 10 to 20 lawyers each write business development plans and "go hunting" as an organized effort.

Key element of an organized approach include:

• Carefully selecting lawyers who have already shown some business development acumen.  These lawyers are the future of the firm. It's not necessary to include rainmakers in the group because they're already doing what they're supposed to.  And there's no point in including "library lawyers' with no interest in having their own clientele, because they'll just be a drag on the program.
• Training lawyers on how to sell legal services.  For lawyers, practice development is very different from being a "salesman" who is pitching products. For lawyers, new business come in-person, and lawyers need training on developing relationships.  Lawyers also need to focus on the industries and practices that generate the most income for the firm -- and put less effort into the rest.
• One-on-one coaching.  As you begin to become active, you'll run into obstacles such as "what do I say..." or "what do I do..." in various situations.  You'll need guidance from an experienced coach in business development to get them over these obstacles.
• Continuing education.  To keep the group momentum going, lawyers should gather monthly for one-hour programs -- live or on the Web -- that answer the common questions they have and to go into detail about the points raised in the initial training.
• Internal roundtables.  If the firm has a marketing director, this professional should organize monthly meetings of program participants, to share their challenges and develop solutions as a group.  The roundtables are also excellent moments to share successes and describe how they were achieved. 

This is exactly how we've designed the Apollo Business Development Program. If you actually take the time, write your business development plan and carry it out, this year can be the best financial year financially in your career. You just have to get out there and do it. Please feel free to Inquire today about the Apollo Business Development Program at http://tinyurl.com/6xvudu

New research shows a dark economic picture for law firms during the next 12 months:

• The current year will represent a significant downturn for the legal industry as a whole. Across-the-board rate increases will not be possible in 2009 .
• Profits per partner in 2008 will on average be flat to a minus 10 percent, as compared to profit levels in 2007, causing a severe strain on many firms.
• Law firms are unlikely to see any significant turnaround until late 2009.
• There will be a significant contraction across the industry over the next several months as firms are forced to lay off legal and non-legal staff, slow down the hiring of new attorneys, restructure operations, and weed out unprofitable practices.
• In most law firms, productivity dropped significantly in the second half of 2007 driven by sharp downturns in real estate, structured finance, and transactional practices. That slowdown continued into 2008, and has been deepened by the current crisis in the financial system.
• The current downturn has not yet been significantly offset by increases in other traditionally “counter-cyclical” practices like bankruptcy, litigation, and regulatory work.

These grim facts are reported by Hildebrandt International in their Special Client Advisory: Fall 2008. The key passage in the report states:

Stay in close touch with your clients, especially those key clients that are important to the firm’s future. Now is not the time to save money by cutting back on productive marketing expenses. Your clients are experiencing the same anxieties and uncertainties as the firm itself, and ramping up communication to them will stand the firm in good stead when economic conditions improve. Lawyers have time on their hands, so put it to good use with increased focus on client development, client teams, and appropriate business development training.

For a related story, read "ACC/Serengeti Survey: The Economic Picture for Law Firms Gets Worse" on the LawMarketing Portal at www.lawmarketing.com  

As the law firm recession enters its second year, new research shows that corporations are sending less work outside, rate increases will be smaller in 2008 than in the past, and 40%+ corporations have fired some of their law firms.

The new research reveals that one reason for the economic downturn in the legal profession is that corporations are sending less legal work to law firms, and handling more work by in-house lawyers. Median spending on outside counsel last year fell 9.1 percent. Making matters worse:

• The legal profession has been in a recession for one year now, as evidenced by high-profile layoffs at major law firms.
• Rate increases for 2008 will be smaller than in the past.
• More than 40%+ of corporations have fired some of their outside counsel during the prior year.

The 2008 ACC/Serengeti Managing Outside Counsel Survey found that median spending on outside counsel was at the lowest level in the eight years the survey has been conducted. “A growing amount of work being kept in-house, this year’s median spending on outside counsel continues a downward trend begun last year, falling to the lowest in survey history. This year’s median outside counsel spending was $1 million (compared with $1.1 million in 2006, $1.8 million in 2005, $1.3 million in 2004, $1.6 million in 2003, $1.2 million in 2002 and $1.1 million in 2001).”

“Median outside counsel spending continues to vary significantly according to the size of the company, with:

• Small companies at $350,000
• Medium companies at $852,000
• Large companies at $4.8 million,” it reported.   

The primary driver of corporate legal costs is outside legal spending, which is roughly double the spending on in-house counsel. However, during the past several years the ratio has shifted in favor of law departments, reflecting the increasing recognition of the value of in-house counsel and the legal work being done in-house.

For the rest of the story, visit the LawMarketing Portal at www.lawmarketing.com.

Some of the surprise statistics that came to light during the Chief Marketing Officers' Forum in New York were:

1. Almost two-thirds (62.7%) rated client interviews and surveys as a “very effective” or “extremely effective” strategy for leading to business development. Almost 29% rated this strategy as at least moderately effective; only 8.5% rated the strategy as ineffective.
2. More than half of all firms are conducting client satisfaction surveys -- up from roughly 40% as reported by other surveys.

These surprises were delivered by Charles J. Lowry of New York, the Director of Sales and Marketing for Incisive Media’s ALM Research, based on the 2008 ALM Research Survey Report: Law Firm Business Development Practices Survey.

He reprised the presentation in last weeks' Webinar Getting Client Feedback to Generate More Business along with law partner Patrick Lamb, founder of the trend-setting Valorem Law Group in Chicago.

Should law firm's conduct client satisfaction surveys? "It's a no brainer," said Lamb, who has personally conducted more than 60 client satisfaction interviews. "Clients LOVE them, and ultimately, nothing else matters.  Plus they make great economic sense.  It costs five times as much to find a new client to replace one that your firm lost because of inattention."

Client surveys also generate new work and favorable referrals from that client, according to Lamb. Not that law firms should use surveys as a direct marketing tool, Lamb emphasized. But the good will generated by conducting a survey will dispose the client to send more work and build word-of-mouth advertising about the law firm.
 

Lawyers need to meet people to generate business and to retain clients, according to author Ari Kaplan. He suggests lawyers join a sports league, the chamber of commerce, and hook up with law school classmates.

Start with those you have already met and have them introduce you to their friends, recommends Elizabeth “Betiayn” Tursi, the founder of Tursi Law Marketing Management. “I have gotten business from friends with whom I went to elementary school,” she notes.

Ari had a method for making contacts that generate new business:

• Make Friends For a Reason
• Participate in non-legal activities
• Become active in your local chamber of commerce
• Start with Alumni of Your Alma Maters

To read more about his strategy, which is excerpted from his new book The Opportunity Maker, visit the LawMarketing Portal.

Get your copy of Some Assembly Required: a Networking Guide for Women in the LawMarketing store for just $22.95

Review by Margaret McCaffery:

This book is a sequel to Thom Singer’s Some Assembly Required: How to Make, Grow, and Keep Your Business Relationships.

It springs from a networking relationship: Thom’s publishers had suggested a book specifically for women and Thom realized he wouldn’t be able to write this one alone. Who should he meet in the airport but Marny Lifshen, someone who had been part of his network for years.

I have to admit, I cringed a bit about reading this pink- covered book in public places like restaurants or the subway. I mean, we should be able to network without needing lessons, right? And why should women need different advice from men? I needn’t have worried: the authors are refreshingly down to earth about the fact that yes, networking comes naturally to some, but even they can benefit from being more strategic with their efforts. And yes, networking is in large part the same for men and women, but women face both challenges and opportunities that differ from those men face.

There is much common sense in this 184-page, simply written book. I particularly liked the focus on the differences between personal and professional friendships. Being someone who likes to keep home and work reasonably separate, I’ve often struggled with the concept that you should develop client relationships into friendships (“make your friends your clients and your clients your friends”).This book looks that issue squarely in the face and defines the difference, recognizing that business decisions will often test friendships, especially if you have to give performance feedback.

Starting with a clear description of the four steps in networking, the authors lay the groundwork for the idea that you will always network, not just when you need a job, or clients. I liked their analogy that networking is like dieting: it doesn’t work if you stop. They list the four steps as Introduce, Educate, Build, and Maintain. I was pleased to see the emphasis on maintaining already strong relationships, having seen many lawyers take their biggest clients for granted (“Oh, they’re just putting out an RFP because the rules say they have to; the work will still come to us, don’t worry”).

For the rest of the review, please visit the LawMarketing Portal.

The law firm Gilroy & Napoli multiplied traffic from target clients to their website nine times by using a combination of search engine optimization and paid search marketing using Google Adwords.

More importantly, the firm received an increase of almost 400% in the total number of visitors who converted into a lead during the five-month campaign.

The firm employed sophisticated online techniques that any law firm could use, to make certain its top 10 most important search terms appeared on the first page of search results on Google. As a result, the firm enjoyed the massive increase in traffic and the higher conversion of visitors into leads.

More law firms are realizing that in the midst of an uncertain economy, it is paramount to focus on marketing efforts that increase results and reduce costs. Therefore, now is the time for your firm to embark on acquiring new clients through the world’s most effective, and most measurable, media channel: online search engines.

Google is No. 1

Google is far and away the most popular search engine: according to statistics from Compete.com, 69.4% of all online searches as of August 2008 were made on Google, Yahoo trailed far behind with a 20% search share, and the rest were in single digits.

The percentage of users searching on a typical day has risen again, from about 40% to 49%, according to a Pew/Internet research, “Search Engine Use - August 6, 2008.”

“What has changed in the search world that might account for this increase? One likely reason is that users can now expect to find a high-performing, site-specific search engine on just about every content-rich website that is worth its salt,” the report states.

Cost effective means of acquiring new clients

...to read the rest of this story, visit the LawMarketing Portal.

As of October 1, the state of Nevada requires the encryption of all transmissions, such as e-mail, for all businesses that send personal, identifiable information over the Internet. Violations are criminal misdemeanors.  

It's all in Title 52 - Trade Regulations and Practices, Chapter 597 - Miscellaneous Trade Regulations and Prohibited Acts. The Nevada law states:

"A business in this State shall not transfer any personal information of a customer through an electronic transmission other than a facsimile to a person outside of the secure system of the business unless the business uses encryption to ensure the security of electronic transmission."

As with any new law, this one could be bound to catch many Nevada businesses off guard. The statute will affect all the law firms, hotels, resorts, golf courses, nightclubs, check cashing companies, ski lodges and small businesses which incorporate in the tax-friendly state. Nevada is the West's version of Delaware.

Lawyer Bryce K. Earl, a Las Vegas-based attorney with Santoro, Driggs, Walch, Kearney, Holley & Thompson, has been following the issue closely and believes there are some problems with the statute as it is on the books right now, namely the broad definition of encryption, the lack of coordination with industry standards and the unclear nature of penalties both criminal and civil.

"The statute's lack of specificity with regard to penalties will perhaps create the unintended consequence of opening up more liability," said Earl. He explained why the broad definition of "encryption" by the state is potentially problematic. Here is the definition from the state's Web site:

NRS 205.4742 "Encryption" defined. "Encryption" means the use of any protective or disruptive measure, including, without limitation, cryptography, enciphering, encoding or a computer contaminant, to:

1. Prevent, impede, delay or disrupt access to any data, information, image, program, signal or sound;

2. Cause or make any data, information, image, program, signal or sound unintelligible or unusable; or

3. Prevent, impede, delay or disrupt the normal operation or use of any component, device, equipment, system or network.

Earl said an argument could be made that a password-protected document sent in an e-mail might be good enough to hold up with the state's broad definition of encryption here. Is that good enough? Moreover, how will Nevada enforce this?

The statute was designed to stop identity theft and online criminal behavior. But once again, the legal system and the IT industry are faced with potentially bigger compliance and liability issues than they probably intended.

I can recommend an email system that has an encryption option that very easily click encrypts any attachment. Give me a call at 630.942.0977.

To get more files from clients, lawyers need to know what is happening at their businesses.  To get this key business development information: 

• More than 50% law firms conduct client surveys.
• 63% of law firms say client satisfaction surveys are their most effective business development tool.

Reprising their standing-room-only presentation at the Chief Marketing Officers' Forum in New York, law partner Patrick Lamb, Esq. of the Valorem Law Group in Chicago and researcher Chuck Lowry of ALM Research in New York describe how client feedback equals new business.

Click here to register today.  Early bird discount rate: $125 if you register on or before Friday, October 17.  After that, the registration fee is $149 per connection.

WHAT YOU'LL LEARN:

• How to expand current work for clients by getting their feedback. Your firm can't meet a client's needs with legal services if you don't know what their business issues are. Law firms need to join the ranks of publishers, retail corporations and other professionals to discover what they want to buy. What large firms do in comparison to smaller firms.
• How frequently firms conduct client feedback surveys.
• Why law firm conduct feedback surveys.
• How to overcome internal resistance to client satisfaction surveys.  Nay-sayers typically argue that deeper contact with clients will only prompt them to complain about the firm's fees.  How wrong they are.
• Dispelling misconceptions about feedback surveys.
• What business development opportunities the surveys present.

Corporate General Counsel have a genuine interest in providing feedback in a setting where they have been expressly asked to offer their opinion rather than in the context of making their comments in an unsolicited manner. Regarding the best approach for feedback, one GC said, “I think coming and asking directly, ‘How are we doing?’ is a good way to do it.”

Click here to register today.  Early bird discount rate: $125 if you register on or before Friday, October 17.  After that, the registration fee is $149 per connection.

Have you trademarked your law firm name?  If not, it's a big mistake and invites cyber-squatters to buy a domain, hijacking your firm name. Just because you've been using your law firm name on stationery and marketing materials may not be enough to create a common-law trademark for you.  Look what happened to GableGotwals, a 65-lawyer firm in Tulsa, OK.

A National Arbitration Forum decision denied the law firm's demand that the domain name gablegotwals.com be transferred to them, and refused to take it away from Schlund+Partner Ag, a cyber squatter based in Naples, FL. The ruling was Gable & Gotwals, Inc. d/b/a GableGotwals v. Dave Jackson, Claim Number: FA0806001212305.

The law firm had been using the GABLEGOTWALS mark in commerce since January 1, 2006, by using its name on letterhead and marketing materials.  The firm demanded that the domain name be transferred to it. Yet the law firm lost even thought the cybersquatter failed to respond to the complaint!

The squatter registered the gablegotwals.com domain name on August 26, 2006 and has a placeholder site online, saying that a real web site is "coming soon."

However, the decision said, '[a]lthough it has been held that there is no requisite showing to establish common law rights, common sense dictates that something beyond mere proof of business establishment is necessary.' In this case, Complainant has produced nothing more than its establishment of a law firm operating under the name GABLEGOTWALS."

"Other than Complainant’s assertions, there is no other evidence indicating that the GABLEGOTWALS mark has acquired secondary meaning or source identity in commerce, and use alone is not sufficient to prove this assertion," the decision states.

The law firm lost its rightful domain name with prejudice.  Don't let this happen to you!

Peter Bilfield gets it. He embraced business development enthusiastically, found a niche, markets in a disciplined way and is on the fast track to being an accomplished rainmaker.  

And he is delivering results that his firm respects: Peter has originated a significant and impressive level of fees for Withers Bergman in New York in 2008.

As an associate in the firm's commercial group, Peter made a commitment to becoming a rainmaker for the practice group and the firm at large.

The first step was to find a viable market niche to focus on. By targeting portfolio managers at established firms seeking to start their own funds, his goal is to build a funds practice. Getting in on the ground floor of these operations, Peter assists in the structuring of the fund as well as counseling the client on the expected evolution of the fund (i.e., where investors will come from and what their tolerance will be for certain fund characteristics).

As the attorney-client relationship grows, Peter assists clients in their fund investment activities – venture capital investments, PIPEs, asset sales, refinancings, acquisitions and other liquidity events.  He also uses his securities background to advise on securities filing requirements and other regulatory concerns.

Peter splits his time between the New York and Greenwich offices allowing him exposure to a large number of attorneys in the firm, spread across several practice groups.  He also switched practice groups in 2007 which was beneficial to understanding the workings of the firm’s Funds & Tax group and building on those relationships to cross-sell services to their commercial clients.

Outside of the firm, he targeted two organizations for business development purposes: the CT Hedge Fund Association and Alpha Delta Phi Fraternity. 

While Peter’s originations are impressive, the inventory of specific wins shows how he worked hard ...

See the rest the story for free in the Originate! newsletter at http://www.pbdi.org/Originate/