Lawyers.com Editor in Chief : Larry Bodine Law Marketing Blog : Law firm marketing, legal marketing, attorney marketing, business development, sales training, practice development, training, marketing consultant, legal consultant, individual lawyer coaching, business development, client team, practice development, business development, law firm coach

You can learn how to get new clients and generate new files in a new podcast "Social Media Strategies for Lawyers," a MyLegal.com interview with yours truly.  Visit http://bit.ly/aKdtBL and the Blog Talk Radio program will begin to play.

Lisa DiMonte of Washington, DC, the CEO of MyLegal.com, ran the interview.  Among the things you'll learn are:

1. The huge change from law firm marketing to business development.
2. Why an attorney's legal training makes them skeptical of social media.
3. The overload of choices in online networking and the solution to dealing with it.
4. There is business to be had on online social networking.
5. Tips and techniques you can use on LinkedIn today.
6. The best lawyer profile I've ever found -- it list clients, industry familiarize and case histories.
7. The power of recommendations on LinkedIn - focus on your business leadership, be a person to send referrals to, and identify the clients you want.
8. An undocumented "Easter Egg": how to send a message to all of your contacts at once.
9. How much time to devote to online social networking.
10. Mistakes to avoid in online social networking.
11. Three approaches to posting a good message that people will read.
12. Using LinkedIn to target potential clients and identify the people you should approach.

 It's all at http://bit.ly/aKdtBL. It's 30 minutes, so grab a cup of coffee, lean back and tune in.

There are a lot of points that corporate general counsel like about their law firms, and they are all pathways to getting more business for their lawyers. They all turn on what retailers call “good customer service.” These behaviors include offering alternative fees, having an effective website, going the extra mile, offering better rates and knowing the client’s business.

None of these tactics will be a surprise for a law firm marketing director (except for the fact that many law firms don’t use them). Most law firms offer excellent legal skills, and having them is no longer a point of distinction. GCs expect it.  Following are several ways that lawyers distinguish themselves and land more work from corporate clients.

Be responsive and accessible.

• “I think about individual lawyers, not firms. Certain lawyers have given me fantastic results and personal attention. If I call my lawyer at Perkins Coie, he’ll call back within 2-3 hours, even though he’s traveling all across the country.  I’ll get exactly what I need to know right away,” said Jeffrey Reeser, Assistant GC at Newmont Mining Corporation in Greenwood Village, CO. The company uses 300 law firms.
• “My favorite law firms will not only tell me about news that affects my company but also tell me they can tailor it to my concerns. They see the hoop before I do and jump through it themselves,” Reeser added.

Know the client’s business:

• “For me it was a pleasant surprise when a partner would talk about what we’d need to get done, and would stay on the line and ask questions about what they saw in the headlines, or what other business challenges I was facing. They took the time to be inquisitive – and we had a fixed fee so it didn’t cost me anything. It’s been very exciting to me. These are busy people and they’ll slow down to take an interest in me – it turns into a lot of business for them.  They’ll say we have appellate skills we can help you with. They make small talk about what else is going on in the company,” said Julie DeCecco, Associate GC and Director of Litigation of Oracle. Her company uses 100 law firms.
• “When you as a lawyer do understand more about our firm, there’s a great cross marketing opportunity,” said Eric Hilty, an in-house lawyer for AIMCO apartment investment, a REIT in Denver.  The company uses 100 law firms. “Lawyers and marketing people should envision putting themselves in our shoes. We’re in real estate industry, our stock price is down and we’ve had layoffs.  Think about what that means. Try to envision what the clients are going through and it’ll help you discover how to meet those needs.”

Your website should display what GCs want to see.

To read all the additional tactics, visit the LawMarketing Portal at http://bit.ly/bpZoSy

Clients referred by word-of-mouth recommendations will produce more profit, stay longer with the firm, and have a longer customer lifetime, according to a new study "Referral Programs and Customer Value" by marketing professor Christophe Van den Bulte of the Wharton School.

"There's a lot of talk about word-of-mouth-marketing, and marketing affiliate programs. Our first objective was to see if customer referral programs can indeed turn social capital into economic capital. Second, we wanted to come up with a methodology to assess the effectiveness of customer referral programs that was easy to implement with data and tools available to many managers."

Using information from a database of 10,000 customers acquired by the bank in 2006 -- about half of them through the institution's referral program and the other half through traditional marketing efforts such as direct mail and advertising -- the study tackled three questions:

• Do referred customers have higher margins than other customers?
• Do referred customers stay longer with the firm than other customers?
• Do referred customers have a higher customer lifetime value (CLV), the net present value of all the profits a customer generates over his or her entire association with the firm?

The answers, according to the study, are all positive.

For the full story please visit the LawMarketing Portal at www.lawmarketing.com.

A smart way to generate more business for your law firm is to know what’s going on with your corporate “customers.” Here’s a peek at what’s happening in corporate in-house counsel suites so that you can maximize your business development efforts.

The survey “Law Department Metrics Benchmarking Survey” was conducted by ALM Legal Intelligence (see http://bit.ly/9tqy2P), which has monitored trends of in-house legal performance since 1972. The survey is based on data collected from 61 US companies throughout 2009, in a dozen industries, with annual revenue of less than $100 million up to $5+ billion.

Six trends affecting corporate clients

Trend No. 1: Law departments are getting bigger or staying the same size. According to the survey, 32.8% of respondents have reduced the size of their law department in the last 12 months. The key takeaway here is that 67.2% of departments are bigger or the same size. This means that more corporations are taking work in-house and staffing up to do so.

Trend No. 2: In-house lawyers are working harder. 70% of in-house lawyers say their workloads have increased during the past 12 months. This underscores Trend No. 1, that work is staying in-house. What this means to law firms is that there is less demand for routine corporate legal services like environmental, tax, real estate, corporate and patent prosecution matters.

Trend No. 3: In-house law departments have had their budgets cut. According to the survey, 62.3% of law departments implemented budget cuts in 2009. This means the lawyers at a potential corporate client are doing more with fewer resources. It’s an awful position to be in. A law firm that could ease the pain of in-house counsel would be welcome indeed.

Trend No. 4: A majority of a corporate law department’s budget is for fees for outside law firms. According to the survey most companies spend 58% to 65% of their budget on outside law firms. This is good news, because it means there are fees to be earned from the overburdened law departments.

Trend No. 5: The higher a company’s revenues, the more law firms it uses. As you can see from the chart below, the sweet spot is companies that have annual revenue of $5 billion or more:

Trend No. 6 – Companies are paying fees to outside counsel in alternative fee arrangements. Roughly 20% of companies are spending 37% of their legal fees in alternative arrangements.

To read what kind of files are most commonly referred, and to read my Five Tips to Get More Corporate Work, please visit the LawMarketing Portal at www.lawmarketing.com.

JD Supra is an online marketing site that lets lawyers upload articles, forms and court opinions for free and then distributes them over new media platforms like Google News, Twitter, RSS feeds, Facebook, syndication partnerships, and a JD Supra widget for maximum exposure.

Now LinkedIn, the online social network used by more than 70 million professionals, has added JD Supra's Legal Updates (http://bit.ly/c8JRjh) to its exclusive list of 16 Intelligent Applications (InApps), which also include Reading List by Amazon and Presentation by Google.

Powered by JD Supra content -- articles and analysis published by legal professionals around the world -- Legal Updates distributes a feed of expert commentary and guidance as well as legal news tailored to the professional interests of LinkedIn members. Currently, Legal Updates is the only application for distribution of professional legal content and information available on LinkedIn. It is free to LinkedIn members and available immediately. 

The Legal Updates app will be the subject of an online demonstration led by JD Supra founder Aviva Cuyler, on July 22, 2010, at 1:00 p.m. ET/10:00 a.m. PT. Webinar registration: http://bit.ly/9NOeuL.

Cuyler and co-founder Adrian Lurssen will demonstrate the application's more powerful features, including customized legal feeds on LinkedIn and the ability for users to recommend JD Supra documents to their LinkedIn contacts as well as sync their JD Supra and LinkedIn profiles.

"Legal Updates is a perfect app for the LinkedIn community because to anyone who needs to be aware of legal developments," Cuyler said. "JD Supra content reaches LinkedIn members when they are focused on business and looking to make professional connections -- the best moment for lawyers to show off their expertise," said Lurssen.

Not to call in-house lawyers and the people behind Inside Counsel a bunch of introverted party-poopers, but the magazine just published a paranoid report entitled, "Tweet This: How Social Media Could Land Companies in Hot Water," conducted by Recommind.

It recounts the fears of Craig Carpenter, who is billed as the Recommind "General Counsel," but who is titled the "Vice President of Marketing" on the company website. For people who have been living in a cave, the article makes findings like:

• Consumer usage of social networking grew 82 percent over one year.  Duh.
• "We can't escape social media completely."  Wowsers.
• A company can't ban Facebook, Twitter or LinkedIn, because people will go ahead and use them anyway. Yep -- most people have a smartphone that can access those sites without using company computers.

Fear is a great sales tool, and it may attract viewers to Carpenter's querulous recorded webinar. So here are the traps, snare, slings and arrows of online social networking, according to the report:

• Many people are using blogs and video sharing sites explicitly for business.
• Online networks broadcast to an unlimited number of viewers.
• People tend to proofread Tweets less than emails.
• People send Facebook or blog entries more casually than first-class mail.
• A message's context may be unclear.
• An opposing party could subpoena Facebook and discover what someone said.
• Case law is not fully developed, except for the Supreme Court ruling this year that employers can spy on what employees say on company computers.

He left out that the sky is falling.  He concludes that "we need to get at the behavior, not the method," with suffocating social media policies. He might as well have concluded, "my fellow dinosaurs, there is a comet coming."

The LawMarketing Portal iPhone app has just gotten better. You can download it at http://itunes.apple.com/us/app/lawmarketing-portal/id375755906?mt=8.

The App first went online in June 2009 and brought readers a steady stream of articles about sales in the legal profession.  The new and improved app now includes technology and news article plus the ability to email, Tweet or save articles.  To see how it works, watch the video.

Thanks to Mashable for these ineffable internet homonyms. You may have thought you were using a three-letter acronym to say something simple, but it turns out to have a secondary meaning that you didn't intend.

The survey “Law Department Metrics Benchmarking Survey” was conducted by ALM Legal Intelligence (see http://bit.ly/9tqy2P), which has monitored trends of in-house legal performance since 1972. The survey is based on data collected from 61 US companies throughout 2009, in a dozen industries, with annual revenue of less than $100 million up to $5+ billion.

Six trends affecting corporate clients

Trend No. 1: Law departments are getting bigger or staying the same size. According to the survey, 32.8% of respondents have reduced the size of their law department in the last 12 months. The key takeaway here is that 67.2% of departments are bigger or the same size. This means that more corporations are taking work in-house and staffing up to do so.

Trend No. 2: In-house lawyers are working harder. 70% of in-house lawyers say their workloads have increased during the past 12 months. This underscores Trend No. 1, that work is staying in-house. What this means to law firms is that there is less demand for routine corporate legal services like environmental, tax, real estate, corporate and patent prosecution matters.

Trend No. 3: In-house law departments have had their budgets cut. According to the survey, 62.3% of law departments implemented budget cuts in 2009. This means the lawyers at a potential corporate client are doing more with fewer resources. It’s an awful position to be in. A law firm that could ease the pain of in-house counsel would be welcome indeed.

Trend No. 4: A majority of a corporate law department’s budget is for fees for outside law firms. According to the survey most companies spend 58% to 65% of their budget on outside law firms. This is good news, because it means there are fees to be earned from the overburdened law departments.

Trend No. 5: The higher a company’s revenues, the more law firms it uses. As you can see from the chart below, the sweet spot is companies that have annual revenue of $5 billion or more:

Trend No. 6 – Companies are paying fees to outside counsel in alternative fee arrangements. Roughly 20% of companies are spending 37% of their legal fees in alternative arrangements.

The research found that there are four primary criteria that corporations use when they select outside counsel. They are, in order:

• Firm specialization – 34%
• Cost – 19%
• Responsiveness – 18%
• History with the company – 12%

Interestingly, criteria that didn’t matter were firm reputation, partnering capabilities and diversity.

We already knew that referrals are crucial to a law firm’s business development success. Now comes a survey that specified exactly how important referrals are: referred work typically accounts for 26% of a US law firm’s income.

The researchers in “Lawyer to Lawyer Referrals: A Global Perspective” just published (July 2010) by LexisNexis Martindale-Hubbell, expected that the value of referral work would typically account for only 5-10% of a firm’s income.

Here’s the astonishing part: 27% of law firms don’t track referrals. This is like not tracking where a quarter of the money in your wallet comes from.

For US firms the most significant types of work to be referred between firms are:

• Litigation
• Employment
• General Corporate
• Property (real estate)
• Intellectual Property
• Following are important business development lessons to be learned from this study:

1. Proactively build a referral network. I have visited scores of law firms, and most of them get referrals on a random basis – whatever comes in over the phone. Instead, smart law firms should intentionally seek out referral sources and cultivate relationships with them.

2. Keep track of incoming referrals. The whole purpose of a referral arrangement is to create a mutually-beneficial relationship. If the other party isn’t doing their share, I recommend that you visit the referral source and have a talk with them. If the conversation doesn’t start producing referrals, stop sending files to them.

For the rest of the tips, please visit the LawMarketing Portal at www.LawMarketing.com.

US News & World Report has announced that the publication will drop their controversial effort to rank law firms and will instead adopt an alphabetical listing in a "tiered" rating system instead. The "best law firms rankings will be published alphabetically within tiers rather than as a numerical ranking.

"They finally reached the conclusion that the validity in such a ranking system is flawed: "firms were often separated by small or insignificant differences in the overall score."  This was just one of the major concerns with the proposed ranking system," said Hilary Guthrie, Director of Planning and Business Development at Harris Beach PLLC in Pittsford, NY.

Nearly 2,000 law firm marketing directors and administrators fell prey to the latest in a serious of meaningless rankings, by feeding information to the magazine. It's too bad. They should have read Only 3% of Legal Work is Influenced by Directories. See also Do Chambers Ratings Matter? NO. "Only private practitioners refer to these directories. Business leaders/owners and in-house counsel are not influenced by them," Guthrie said.

Here's the catch: to be considered in the US News ratings, a law firm must be included in yet another directory: to be eligible for a metropolitan area rating, a firm has to have at least one lawyer listed in Best Lawyers.

So how do you get into Best Lawyers? Pathway No. 1 is to be in it already. Every lawyer in the previous edition is nominated for inclusion in the next edition. It's not different from a self-perpetuating club. The public can "nominate" lawyers, but they don't count very much, according to the Best Lawyers FAQ.

Pathway No. 2 is to have a lawyer nominate you. However, the voters for existing lawyer categories consists of all lawyers who are currently listed. As a result, many "best lawyers" are members of the older generation.

The US News effort is basically a clumsy ploy to sell ads, magazines and directories. Described most generously, it is a cross-marketing effort between two directories trying to survive in a market where directories don't matter.

The U.S. News-Best Lawyers Best Law Firms rankings, are scheduled to be released on its website in mid-September. Everyone who loves a popularity contest will be sure to read it.

Legal career consultant Kate Neville says 20 percent to 25 percent of her clients affirmatively want to leave law practice, and many are willing to consider leaving.

I can tell you why: it's because they let their clients choose them, as opposed to identifying an ideal client and pursuing the client.

The unhappy lawyers are order-takers at megafirms, who become addicted to taking assignments from senior partners or other lawyers. They are also lawyers at small firms who will take any assignment that comes in over the phone. As a result, the lawyers collect a clientèle of a**holes who make their lives miserable. The legal work is often wretched too, consisting of work a senior lawyer isn't interested in doing, or a file from a client who has been shopping across the Internet for the cheapest lawyer in town.

Compounding their unhappiness is the fact that they have no job security. They live in fear of the next round of layoffs or sweat making the next payroll.

Let me describe the happy lawyers:

• They have a lot of business relationships. When they walk into a coffee shop or luncheonette, many people recognize them and say "hello."
• They don’t take assignments, they give them.
• They control their own destiny and pursue areas of law that interest them.
• They are invited to positions of authority at their firm.
• They are never targeted for layoffs.

I've just described the rainmakers. These are lawyers who know who their ideal client is, and they put themselves in the circles where they are found. They have become industry experts, who speak and have leadership roles at trade associations, where they meet potential clients. They get out of their office, have coffee with a referral source, lunch with a client, and spend an evening at a business organization meeting.

As I've long maintained, business development is the key to happiness in practicing law. I'm working with a smart second-year associate who wants to get started with business development; the reward will be job satisfaction for years to come. Nothing beats having your own clients.  A clientèle gives you authority, independence and job satisfaction.

The beauty of rainmaking is that it is not an in-born talent.  It is a skill that can be learned. Check out the video Rainmakers weren't born that way, they were trained.