Sunday, October 11, 2009

Six Facts About New Business Generation

This article is a chapter excerpt from the book Legal Business Development: A Step by Step Guide, by Jim Hassett, Ph.D. The entire chapter is available as a free PDF document.

Did you take several courses in law school about how to build stronger relationships with clients, and how to sell legal services? I didn’t think so. This chapter introduces the basic concepts that should have been covered in that course. If you are one of the many lawyers who thinks that selling means running ads and trying to force yourself on strangers, you must read this chapter. Those approaches usually don’t work. When they do, it’s after an enormous amount of effort. So if you want to get the most from marketing, it’s important to spend your very limited time on the tactics that will work fastest for you.
  1. Fact 1. You must start with current clients

    When lawyers first think about selling, many immediately start planning how to find new clients. But selling begins at home, and they would have much greater success if they focused first on the clients they already have.

    According to Harry Mills,1 research shows:

    "The chances of selling to an existing client are better than one in two.
    The chances of selling to a lost client are one in three.
    The chances of successfully selling to a fresh prospect are one in eight."

    The exact numbers will be different for your firm, but experts agree that in every business, it’s much easier to sell to people who know you than to sell to strangers.

    You might think that as large law firms hire larger business development staffs and increase budgets, they would quickly get to the point where their current clients were taken care of, and not a good source for additional revenue. This seems to be logically inevitable, but it hasn’t happened yet. ALM’s survey of large law firms found that in 2006:

    "The largest share of growth by far is from selling more of the same
    work to existing clients. Selling new work to existing clients and
    selling work to new clients, each account for much less revenue
    growth on average."

  2. Fact 2. Selling is a learned skill

    Selling is a skill that anyone can learn, like golf. Not everyone will become a professional, but everyone can play the game. Also like golf, selling is a lot harder than it looks. The good news is that you do not need to be great to win; you just need to be a little better than your competition. Frankly, at the moment, you may be able to win quite a bit of new business with fairly basic selling skills. In an article about the difficulties of managing law firms, David Maister wrote:

    "The greatest advantage lawyers have is that they compete only with
    other lawyers. If everyone else does things equally poorly…
    even the most egregious behavior will not lead to a
    competitive disadvantage."4

    Until recently, the same could be said about selling. But these days the competitive bar is going up. According to the 2006 ALM survey,5 sixty-nine percent of large firms (with an average of 489 lawyers) and forty-six percent of mid-sized firms (with an average of 118 lawyers) have implemented sales training programs.

  3. You must listen. In the Seven Habits of Highly Effective People, Stephen
    Covey wrote: “If I were to summarize the single most
    important principle in the field of interpersonal
    relationships, listening is the key.”59
    In the book Primal Leadership, Daniel Goleman argues
    that listening skills are also vital for leaders.60 An
    effective leader must be able to sense how employees feel,
    and then channel that energy into the most productive
    The skill of listening can even help people get a job.
    When business leaders were asked to rate the most
    important characteristics they look for in hiring people,
    seventy-three percent rated listening as an “extremely
    important” skill.61 But when the same group was asked
    how many high school graduates actually have good
    listening skills, the answer was nineteen percent.
    When Suzanne Lowe and Larry Bodine published a
    survey of 377 marketing professionals on “Increasing
    Marketing Effectiveness at Professional Firms,”62 one of
    the best metrics for tracking success was whether
    rainmakers consistently listened to their clients.
I will post the next three tomorrow!

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