Marketing Techniques: A Contact Sport
by MBA and MBA
As consultants who have worked
with attorneys since the mid '80s, Centurion Consulting Group has seen a tremendous
change in law firm marketing. While most attorneys have embraced marketing as an integral
function of operating a business, many litigators have difficulty marketing. Sole
practitioners and small boutique litigation firms have learned to survive on their
marketing skills. However, litigation departments of large and mid-size law firms have
often relied on their firms' current clients for business with little, if any, marketing
to prospective new clients.
Marketing is a numbers game.
Research indicates it takes eight contacts to convert a prospect to a client. For a
litigator, that number may be even higher since litigation is often the result of an
external influence such as being sued. If we use the "eight contact theory,"
then we acknowledge that the first seven contacts will not yield a new client. For many
attorneys, the fear of failing to obtain a client during the first several contacts or
getting the "No" seven times will inhibit their marketing efforts. For
litigators the situation may be worse, since they strive to win and a "No" may
signify a failure in some attorneys' minds. On the other hand, rainmakers see
"No" as the path to a "Yes" someday and pursue a prospective client
Marketing defines two groups
on which efforts can be focused: the client or end-user of your services and/or the
referral source who refers the client/end-user. The most cost-effective way to market is
to concentrate on the referral source. You can market to one referral source who may refer
you five clients over the course of one year. Or you could use the same time to market to
one company and you may or may not get that one client.
The best way to determine to
whom you should market is to review your list of clients from the past several years
and determine how your clients originated. Examine both the number of clients and the
amount of revenue each generated. This exercise usually reveals some interesting data. By
tracking this information in a spreadsheet or database, you can periodically (at least
twice a year) analyze any trends that occur.
For example, you see that two
years ago, one of your former law professors referred a client. The next year, he referred
you several clients and another professor referred a client as well. This year several
professors have referred several clients that have generated substantial revenues. Law
professors should become a marketing focus for you.
If you determine that other
clients refer most of your clients, then you need to look at your clients' industries,
since it's easier to target a specific group. In analyzing your client base, you discover
that a number of the clients are certified public accountants. Consequently, you should be
speaking at CPA organizations and writing for CPA publications.
All too often, attorneys
automatically market to other attorneys when, in fact, attorneys may not be a good source
of clients. We have found attorneys who are extremely active in bar associations, speakers
at lawyer groups and authors for articles in legal publications; however, they find that
no clients come from other attorneys. While some of these activities are important to
build a credible resume, at some point the attorney's time will be better spent in
marketing to the people who will generate business.
Once you've determined where
your clients have come from in the past, you are ready to use that data to develop a
marketing plan for the future. Research has shown that firms with a written marketing plan
have more growth in revenues and profits than firms without a plan. Average revenues and
profits per attorney are higher as well -- by as much as 147 percent. Developing a
marketing plan is critical if you want to generate more profit.
The marketing plan, divided
into two areas of reputation and relationship marketing, is a month-by-month program of
action steps describing what you intend to accomplish during the next 12 months.
Reputation marketing includes speeches, articles and seminars that will build your
reputation whereas relationship marketing is one-on-one marketing to individuals. You can
do relationship marketing without the reputation. However, you usually can't do reputation
marketing without the relationship, unless you have a very high profile, media intensive
case or practice.
The most crucial element of
the marketing plan is to develop a database, which is the core of any marketing program.
We talk with many attorneys who don't have a database or a mailing list. The lack of these
tools is a missed opportunity to let people know about a speech that you'll be giving or
about an article that you've written.
The adage "out of sight,
out of mind" is true. You need to communicate with your referral sources, clients and
prospects on a periodic basis (about four times a year), so that they remember you when
they need you. A formal newsletter is impersonal; however, a "memo" to each
person (easy to do these days through mail merge), creates an image that the information
has been written for the specific individual.
Speeches are an excellent way
to get your name in front of your potential clients or referral sources. If you tape
record your presentation, you can transcribe it and, with a little editing, have an
article ready for a publication.
The value of articles that you
write is not that people will necessarily read it in the publication, but that people on
your mailing list will see the reprint that you send out. You can also include reprints in
your package of materials you give to prospective clients or prospective referral sources.
Co-sponsoring a seminar with a
prestigious company or organization lends credibility to your reputation. In addition, you
may have access to the mailing list of the organization. Often, we see attorneys who view
the presentations that they give as their marketing effort. We say that marketing begins
when the speech ends. Presenters should ask for business cards in exchange for information
that will be sent out at a later date. Always provide handouts with your name, address,
telephone number and e-mail address to the attendees.
The previous techniques fall
into the category of reputation marketing. Relationship marketing focuses on the
individual. One of the best ways to enhance a relationship is to eat a meal with your
target and to do so periodically (remember the eight contact rule). When we asked great
rainmakers how they obtained their clients, many indicated that social situations were the
number one way that they did business. However, we've spoken to many attorneys who
never mention business in social events and who may, in fact, be missing out on a great
opportunity. Plane trips are another source of business for rainmakers. The key in a
social situation is to talk about what you do in a way that lets the listener know more
about your skills and talents.
Although you may have great
success in marketing, unless you employ strong financial management, your marketing
efforts may be for naught. Most attorneys want to bring in as much business as they can
and don't look at the profits. By chasing the revenues and not the profits, some attorneys
Meet the attorney who looks at
a $100, 000 client and can't resist taking on the fixed-fee work. However, at the end of
the case, the profits are only $10,000 or 10 percent of revenues. Another attorney takes
on a case that will generate only $30,000 in revenues, but the profit will be
$15,000 or 50 percent. The second attorney is better off financially. Yet, many attorneys
don't bother with the profit calculations and are mesmerized instead by the high revenues.
By the way, the average profits (draws) in a law firm are 30 percent.
Firms can improve their
profits by delegating work to the lowest paid, most competent person. Partners who do the
work of associates and who could be marketing, instead, are not operating as efficiently
as they could. Firms should analyze their personnel ratios, such as the ratio of partners
to associates, attorneys to legal assistants, and attorneys to secretaries. The lower the
ratio, the more efficient the firm. Research indicates that as the number of attorneys
increases, the ratios decrease because the firm is more efficient. After 25 attorneys the
firm is less efficient because more support staff are needed. Once the firm passes 50
attorneys the ratio drops again as economies of scale increase efficiency.
Many attorneys don't initially
consider a client's ability to pay. By qualifying prospective clients ahead of time,
attorneys can avoid taking on clients who might have financial problems. Qualifying a
client requires research to find out the financial stability of a potential client.
Attorneys can conduct research through Dun & Bradstreet's computer database in a
section called "Paydex" that scores a company on the amount of time it takes to
pay its bills.
Attorneys can also search for
information about prospects on the Nexis database of newspaper and magazine articles.
Other databases provide information on tax liens and bankruptcies. Attorneys can even hire
investigative companies to perform due diligence on prospective clients. By qualifying
clients, attorneys take on the most stable clients and avoid unknowingly working with
financially risky ones.
Litigators, who counsel their
clients not to pursue litigation, run the risk of decreasing their revenues in the short
run. However, in the long run, clients will appreciate the sound business advice and will
probably refer other clients to the litigator. Referral sources, who know that the
litigator conducts a cost benefit analysis, will undoubtedly appreciate the advice for
their clients as well.
We have entered an era where
the marketing plan and action steps, coupled with astute financial management, are
regarded as an important business function within the legal profession and are addressed
with the same fervor and seriousness as that of successful companies in other industries.