Are Your Cross-Selling Efforts Stalling? Maybe You’re Doing It Wrong…

Whether you call it cross-marketing or cross-targeting or some other variation on the theme, cross-selling is not a new concept for most lawyers and firms. And it’s not particularly complicated to do: align the work you actually provide a client with the services they need, and implement a program for connecting their needs with your practices. Easy-peasy, right? So why is it so hard to find cross-selling success? Here’s what I’ve learned over the past 25 years:

1. You’re focused on the wrong solution. By framing the problem as “how do we cross-sell more services?” you’re unwittingly eliminating all the other ways you can derive value from your client base. Yes, expanding the scope and breadth of representation is a pretty solid way to maximize a relationship with Company X or Y. But your existing clients can provide you a wide range of other types of opportunities. Perhaps you can use expertise you’ve gained working for an industry leader to create a practice devoted to solving the problems of similar businesses. Or draw on the individual relationships you’ve developed with clients to get more referrals. Or even work with an in-house lawyer to author an article that allows you to share your insight with a new audience. Whatever the tactic, if you re-frame the problem as how to leverage the value of existing clients, you’ll have a new perspective on solving it.
2. You’re not trying hard enough. Cross-selling is hard. It requires perseverance and time, the kind that is measured in years, not quarters of an hour. You need to bring people together and ask them tough questions and find compromise and solutions that may not please everyone. There are no shortcuts to successful cross-selling initiatives. Most firms – and many lawyers – don’t have the patience and long-term vision to pull that off. Sure they’ll introduce an IP lawyer to their real estate client, but they give up on the concept of cross-selling if that single new relationship doesn’t bear fruit in a month or two. That’s not to say that you’re never going to get results with a single phone call, but if you want your cross-selling efforts to produce new representation you’re going to have to work at it.
3. You’re setting the wrong objectives. It’s true: most firms look at cross-selling as a way to grow their revenue stream, to increase profits with minimal expense. After all, the cost of expanding work for an existing client is always going to be less than that of acquiring a brand new client. And that’s a fine objective: like every other business, law firms have to make money to survive. But the firm that seeks to provide more work to current clients because that’s the best solution for the client – because it allows the client to increase efficiencies and drive down costs, because it allows them to benefit from the institutional knowledge their lawyers have of their business, because it offers them better services at a more reasonable rate – is going to be more successful than the one looking to make more money.

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What could you do to improve your cross-selling efforts?

(Originally posted at Zen and the Art of Legal Networking)
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5 Things I Learned at the In-House Counsel Panel at #LMA16

Last month I attended the Legal Marketing Association annual meeting, two days of presentations on how lawyers and firms can better market their services and grow their practices. The highlight of the conference was the in-house panel, which this year featured Vince Cordo, Global Sourcing Officer at Shell, Matt Fawcett, General Counsel of NetApp, and Paul Drummond, Senior Legal Counsel at AT&T. Elizabeth Duffy of research firm Acritas led the discussion.

Here's what I learned: 

1. Value matters. 

Although the panelists agreed that there was no one, standard, definition of "value," they all made it clear that they look to their outside lawyers to bring some form of value to the relationship, such as helping the company meet certain financial objectives, moving the stock price, efficiently resolving problems, anticipating legal issues, and more. The challenge for firms then becomes figuring out how each individual clients defines "value," and providing that.

2. Feedback matters. 

The in-house panelists all agreed that they wished their lawyers did more surveys. They felt firms miss out on an important opportunity to improve the relationship, to learn what their clients don't like and stop doing it, when they don't seek out more feedback from clients. What's more, they made it clear that have things to say – about delivery of service, about skill sets, about how we can make them happy – that they not telling us simply because we don't ask. 

"We don't hire lawyers. We hire law firms."

3. Teamwork matters. 

This was perhaps the most surprising thing to hear, because the idea that clients hire firms, not individual lawyers, flies in the face of what we've been told about the importance of personal relationships in the legal industry. It's important to note that their point was not that they do not expect strong rapport between the in-house and outside counsel; rather, that they give work to firms based on bench strength, on the breadth and scope of skills, on creating and maintaining an environment where everyone contributes and gets credit for their work. 

4. Fees matter. 

Although Paul Drummond told the audience that efficiency is often more important than price, going as far as to say that price is "irrelevant [and] independent of expertise, quality," and other factors, the panelists made it clear that cost continues to be a factor in evaluating the performance of outside counsel. And it was equally clear that the companies on the panel are pushing back harder on certain types of fees to restore balance, to move from a place where legal costs are based on the law firm's perception of value rather than that of the client.  

"Law firms call them 'alternative fee arrangements.' We call them 'appropriate fee arrangements'"

5. Metrics matter. 

The panelists made it clear that clients – now more than ever – are using metrics and data to drive efficiencies and cost-savings. They're all looking at a broad range of data points when evaluating law firm performance, trend that appears to be here to stay. The good news is that they're not shy about telling law firms what they're doing: all you need to do is ask. The better news is, according to Matt Fawcett, the competition hasn't started asking yet…

*     *     *

So what can you learn from the in-house panelists at this year's LMA conference? That your client is probably more than happy to tell you how you can make her happy. You just need to ask.

3 (More) Ways to Jumpstart Your BD in 2016

Want to do better in 2016? Give your business development a boost. Here are three ways:

1. Talk To Your Colleagues. 

Although you pass each other in the hallway 12 times a day, how often do you stop and talk business development with your fellow lawyers? Why not set aside one lunch per month to get together with one or two of them and talk business development? It doesn't have to be formal, you don't need to bring your BD plan as reference, you don't have to justify what you did or didn't do last month. You just have to talk about clients and opportunities and ways you might be able to get new work. 

2. Drop Your Clients a Line. 

You know it's true: most of the correspondence you send clients is about work – status updates, compliance questions, filing deadlines, and the like. But it doesn't have to always be that way. What if you made an effort, again once a month, to find one article or blog post that one of your top clients will find interesting? Perhaps it's an article about their alma mater, or a ground-breaking development in their industry, or even news from their home town that you can forward along with a "this made me think of you" cover note.  They'll appreciate it.

3. Make an introduction. 

No matter how long you've been practicing, you probably know several people who would benefit from knowing each other. Perhaps your accountant and your biggest client both like to sky dive. Or maybe two clients in complementary industries went to the same college but have never met. Whatever the connection, what if you made the effort to figure out who would gain from an introduction and then put them together? Wouldn't your contacts appreciate it if you made three or four introductions over the next 12 months? 

Make 2016 a great year.

7 Ways To Make In-House Lawyers Happy

Earlier this week, I attended a Legal Marketing Association Ohio conference, "Perfect Your Pitch," featuring six in-house lawyers:

• James D. Campbell, Senior Counsel – Litigation and Claims, Big Lots!
• Ria Farrell Schalnat, General Counsel and Director of Intellectual Property, Vora Ventures
• Mark G. Stall, General Counsel, Escort Inc. and Cobra Electronics Corporation
• Peter Jurs, Vice President and Legal Counsel, Fifth Third Bank
• Robert Horner, Vice President, Corporate Governance and Secretary, Nationwide
• Fred Stein, Senior Vice President and General Counsel, Redbox

The group shared useful insight into what we should be doing to make them happier and get more work. Some observations (in no particular order):

1. In-house lawyers want meaningful relationships with outside counsel. For the in-house people who sat on the panel, it's all about the relationship. They won't give work to people they don't know, people they just met, people who haven't spent the time and effort to get to know them and their company. One panelist said that two years is the minimum amount of time necessary for a relationship to develop into work for the outside lawyer, and that ten years is probably more realistic. That might be a bit extreme, but the point is that they want to work with people they know and like, so the better your relationship, the more opportunities you will see.
2. They like free stuff. All of the in-house lawyers were in agreement that they appreciated lawyers who give them free stuff: forms and checklists, ideas and suggestions, introductions to potential customers, etc. Doing so demonstrates that you care, that you're willing to invest in the relationship, that you're the kind of lawyer they'll want to have on their team. It gives you a chance to "audition" for more work and, most importantly, it opens the door to reciprocity: additional work, referrals, and the like. It was clear that most of the in-house lawyers who spoke have to operate on limited budgets with fewer people than they need, so becoming a "knowledge source" is a great way to stand out as you help your clients get smarter and do their jobs better.
3. They require transparency. All of the panelists talked about the importance of transparency at one point or another. A pet peeve was outside counsel who blew through a budget without telling anyone, instead sending a bill for twice the amount. That isn't to say that firms must stick to expected costs for unpredictable work (think litigation), but rather that they want their lawyers to keep them in the loop when fees start to exceed the budget. They recognized that it's not an easy phone call to make, but were clear that it absolutely had to be made for the relationship to continue and grow.
4. In-house counsel is always interviewing other lawyers. Like all of you, in-house lawyers attend seminars, conferences, social events, and the like. They talk regularly to other providers, and they meet people they like and want to work with. That's a given. For you, it means always taking that extra step, making your clients happy, asking them what they want and then delivering it. But it also means that you're only as good as your last piece of work, and that your client relationships are always at risk.
5. They're struggling to please their own clients. Several times during the day each of the panelists referenced his or her own clients: the CEOs, executives, Boards, etc., to whom they all report. Those clients are just as demanding as yours and, as one speaker pointed out, the risks are much greater for the in-house lawyer who doesn't make her clients happy. Another said (and said again) that he wants his outside lawyers to ask him how those clients are doing every time they're on the phone together. The bottom line? Knowing who your clients report to and how they're being evaluated can make or break a relationship.
6. They're tired of Alternative Fee Arrangements. "Alternative fees are a race to the bottom where associates are getting squeezed." That's a direct quote from one of the panelists, who said that getting work "on time, on spec, and on budget" was better than an alternative billing arrangement. It's not that they're wedded to the billable hour, but rather that they have learned that AFAs do not always mean lower costs – or greater efficiency – so they are understandably skeptical when outside lawyers pitch alternative fees. We should instead be creative in developing billing agreements that are win-win and that allow both sides to benefit from technology and other delivery improvements.
7. They don't like staleness. From the panelists' perspective, outside counsel should always be improving the delivery of legal services, the relationship, the quality of work. One in-house lawyer called it CQI: Continuous Quality Improvement, and said that he liked lawyers who kept the relationship dynamic.

What are your extraordinary measures?

Extraordinary times call for extraordinary measures. No one would dispute that these are extraordinary times for the legal profession. Or that the landscape in 12 months will look radically different than it does today. So what are your extraordinary measures? Are you thinking about your business model? How it meets your clients’ needs (and not just your own)? How it could give you a competitive advantage? Could you change the way you do business now? Would you want to? Can you envision a different model for your firm, your practice, the entire legal profession? What could you do today that will help your practice evolve, survive, and dominate?

Could you do away with the billable hour? Of course you could, like some firms have already done and many more will do. Could you outsource your low-end commodity work? Of course you could, reducing the costs for your clients at the same time as you focus your work on analyzing the business implications of their legal issues, giving them more valuable advice that will make their businesses better. Could you offer work at an annual fee, not just a flat fee but a flat fee that covers a full year's worth of work, as Jay Shepherd recently suggested in a post on Twitter? Of course you could, gaining both a happier client and an invaluable perspective on her business, motivation, personal and professional goals, successes and failures because she never has to look at the clock when she picks up the phone. Could you stop charging your clients for research and due diligence? Of course you could. Could you develop a long-term training program for your clients to teach them how to do work for which they have to pay you today? Of course you could.

You could do all of these things, and many others, to change your business model, survive the current economic crisis, and grow your practice as others fall by the wayside. To make your clients happier, reduce their legal costs, and provide them with advice that will help them run their businesses. Or you could do nothing, and let your competition eat your lunch. The choice is yours.

What's wrong with this picture?

"What is the most significant issue currently facing the legal profession?" Here's what your peers are saying when 22 Tweets put the question to them.

David Barrett (@barrettdavid): "The LinkedIn Lawyer"

I think the most significant issue facing the legal profession is transparency …
As consumers get more sophisticated, we need new ways across the understanding gap between lawyers and non-lawyers …
Of course there have been great lawyers forever … and we could videotape them all day and clients would get value ….
But now we are in a new era of transparency … and there are a lot of areas in the profession where light has yet to shine

Kelly Erb (@taxgirl): tax lawyer

Besides layoffs? Image. There are terrible lawyers who have ruined what folks think of us. Most lawyers are good people!

Scott Gibson (@tradesecretlaw): business lawyer

Lawyers need to think differently about how we serve clients. Focus on client needs, solve their problems, and provide value.

Dan Harris (@danharris): international lawyer

BigLaw costs too much. Firms must move from hourly billing. Abt 75% of my firm’s work is flat fee. Better for clients & for us

Erik Heels (@erikjheels): trademark, domain name and patent lawyer

Learning to speak Plain English. The@creativecommons copyright licenses are a good example of anti-legalese legal writing.

Jodie Hill (@downtownlawyer): litigator

Lack of legal representation for those who cannot afford it.

Tom McLain (@tommclain): international corporate and M&A lawyer

Communicating why lawyers are valuable at whatever billing basis is used. How do you value the lawsuit not filed?

Bill Marler (@bmarler): food safety advocate

Maintaining high legal standards for ethics while experiencing more and more competition.

Jay Shepherd (@jayshep): employment lawyer

Hourly billing, overpaid associates, legalese are killing it. BigLaw is like GM, newspapers, record co’s. Change is coming.

Christian Stegmaier (@cstegmaier): retail / hospitality and appellate lawyer

For younger attys, managing their debt. I feel for those folks…
… For mid-levels and partners, maintaining the pace & staying fresh. It’s a marathon, not a sprint.

Have you written your recovery plan yet?

The economic crisis isn't improving, and the legal profession seems to be getting hit particularly hard. Firms of all sizes are cutting associates, staff, and even some partners as they hunker down for what promises to be a "cruel, cruel summer." What's your plan for the recovery? Are you lying low and waiting it out, cutting out unnecessary expenses, finally reading up on tax law and taking those Spanish lessons? Or are you putting yourself in charge of your own future? 

In my earlier post "Why aren't you excited about 2009?" I made the case for developing your own antidote for an unhealthy future: a plan of action. Not overly complicated, not filled with platitudes, not so detailed that you can never start. Just a plan that requires you to think about where you are, where you want to be, and what you need to do to get there. A plan that sets some realistic, aggressive, and measureable goals. A plan that you can revise often to account for the new opportunities that each of your successes creates.  

Some ideas to consider as you work through your plan:

• Focus on opportunities, not problems (I learned this reading Peter Drucker). It's easy to say "this won't work" or "we don't have the resources for that" or "there's no way we can get a meeting with the GC." But that won't get you anywhere. Think instead about what you can achieve, what will work, what you know makes sense. Identify the opportunities—the true opportunities, the ones you measure in terms of probability not possibility—and the steps needed to realize them. You'll solve the real problems when you get to them.
  
  
• Remember the client. It's all about the client. If your opportunity doesn't make sense for the client, doesn't save them time or money or stress or reputation, how could it add value? Would you buy a second car from your dealer just because he sells cars, because you already bought one from him and you're relatively happy with the transaction, because he's a nice guy you play golf with, because he tells you it would be a good idea? Or would you base your decision on an entirely different set of criteria than those motivating your dealer to sell you a second car? Always remember that success comes from selling what the client is buying, not the other way around.
  
  
• Be realistic about what you can achieve. Yes, it would be great to get all of the transactional work of your firm's biggest disputes client, but is it realistic? Do you have a story to tell that would compel that client to fire the firm it's been using for that work, for the past three decades, and hire you? It’s only an opportunity if you could realistically get the work and do the job better than your competition.
  
  
• Don’t sell your own passion short. Most of the lawyers I know chose to become lawyers because they wanted to, chose to work at their firm because they believe it offers them and their clients distinct advantages, chose to become experts in their practice because they love that type of work. Wouldn’t you rather hire the gardener who stops by on her way home from another job to make sure you’ve been watering the new plants at the right hour of the day? Who gets excited while explaining the importance of a 20/30/50 mixture of bluegrass, fescue and ryegrass for your yard? Passion for what you do, for helping clients, for adding value, is a competitive advantage, but only if you’re selling it. Build it into your opportunities.
  
  
• Don't let prejudice or tradition or fear of change get in your way. The way things have been done is not necessarily the way they will be done in the future (particularly today's future). Don't talk yourself out of pursuing an opportunity because it will require a lot of work and you've never done it before and it might even fail. Of course it's hard work. Of course it's risky. Of course it's very different from what you've done in the past. That’s the price of getting into the game. 
  

Wouldn’t you feel better about the future if you knew where it was going?

Aren't you on Twitter yet?

Carolyn Elefant, on Nolo’s Legal Marketing Blog, just posted another piece on why lawyers should be on Twitter: “To Twitter or Not To Twitter? That is the Question for Lawyers” (you know where I stand on this from this post and this one). Elefant gives a very useful overview of what Twitter is and how you can use it to market yourself and your practice. Get on Twitter, position yourself as an expert amongst your peers, develop relationships with people who can help you grow your business, have fun engaging others in conversations about things for which you have true passion that have nothing to do with your professional activity. That sounds easy, doesn’t it? It truly is. But do we Tweevangelists really believe that there is value in that? Real value, the kind you can endorse on the back and deposit into your account?

In a recent post, I asked whether lawyers shouldn’t be using Twitter to engage clients rather than other lawyers. I don’t ask the question because I think engaging other lawyers does not have value. It does. I don’t ask it because I think using Twitter to validate your expertise does not have value. It does. I don’t ask it because I don’t think establishing relationships based on non-work interests does not have value. It does. All of the ways that lawyers are currently using Twitter have real value that can lead to real work.

But I cannot believe that there isn’t more. That we cannot move Twitter from being an effective networking tool to being a practical communication tool. That you can’t use Twitter to communicate directly with your clients in real time, taking advantage of the immediacy and directness and responsiveness and crowd-sourcing and all of the other benefits of Twitter to help you do your business better, make your clients happier, provide better service and add greater value. Others are doing it, such as @scottymonty and @zappos. Of course selling shoes or selling cars is not like selling legal services. But can't we learn from them? Can't we apply what they are doing and how they are doing it to what we do and how we do it?

I don’t know the answer to this question, and I’m not even sure I could come up with it on my own. But I am sure that someone will, and while the rest of us are still trying to figure out why a client would want to communicate with her lawyer in a public forum, that person will move the game to the next level. 

Three related points. 

First point: in my last post on Twitter I asked for ideas on how lawyers can use twitter to communicate with clients. I got some good comments that are worth reposting here:

Bruce Carton said

“Lance, I have gone with the Trojan Horse method. I re-branded my @SecuritiesD Twitter feed as a "news wire," and have it identified and piped-in via RSS to my website (securitiesdocket.com) as such. Lawyers understand what a newswire is and like it. They didn't pay much attention to it as a Twitter feed.”

  Doug Cornelius said

Lance -

I think there many be some over-enthusiasm for Twitter as a client development tool for lawyers. I think there is a big variation depending on your practice. Chris Brogan gets lots of clients through Twitter because that is the nature of his business. He is a social media consultant. Kevin O'Keefe gets lots of business through Twitter because he is in the social media business.

As a commercial real estate lawyer, none of my clients use social media. They do not read blogs. They do not use Twitter. Only a handful were even in LinkedIn. Even in my new area of compliance, there are very few people in the industry using blogs or twitter. If I were an IP lawyer or dealing with tech start companies. The opposite would probably be true.

The other concern is the future Twitter business model. Right now, the company has zero revenue. That cannot go on indefinitely. Something will change. It may just put Twitter in the junk-pile (anyone remember Friendster?)

I am a big fan of Twitter. But I am less sold on evangelizing it to clients. I would not spend the time in a pitch talking about Twitter. The focus should be on the client and solving the client's need not on your twitter habits.

I like the idea of putting your twitter username on your business card. (That leaves out bigfirm lawyers. Their marketing department would never allow it.) I assume you would also want your blog URL on your business card. If the client notices, then spend some time talking about it.

Melanie Green said (via Twitter)

Get your marketing folks to put Twitter "follow me" links on your web site in areas where people are providing content.

Second point: Does anyone recall how email was received when it first started to become a widespread communication tool? Did lawyers resist it because clients weren't already using it? Did lawyers try to convince clients not using email that it was a great tool for which they should sign up? 

Third point: Please tell me what you think. Can lawyers move Twitter to the next level of client communication? Should they? What are you doing to make your Twittering valuable to you and your practice? Do you think Twitter can be more than what lawyers are it for today?

Why aren't you excited about 2009?

Do you think that 2009 is going to be a banner year, that you'll end it doing the work you want to do for the clients you dream about having? Why not? Do those dream clients no longer need legal advice? Has the work you love disappeared as a legal discipline? 

Isn't it possible that this year could be good for you in some respects? That the slowdown might give you an opportunity to analyze your client base and focus your business development efforts on the handful of clients you like, who pay your bills on time without question? A chance to rediscover what it is you love about the law, what you're truly good at, and how you can do more of that work? Is there no chance at all that you can finish this year right where you want to be, in your sweet spot, ideally positioned to make your post-economic-crisis career better than that which you had before the world came crashing down around us? 

It won't be easy, of course. It will require commitment, planning, discipline and lots of hard work. You'll need to focus your time, effort and money, chase only those opportunities that fall into your zone, keep your eye on the prize at all times. You will have to make hard choices, step outside of your comfort zone, maybe even pass up a chance to bid on work you don't want to do for a client that won't pay your bills (not as easy as it sounds). But it's not impossible. 

You'll need a plan of action, one that identifies your objectives and the steps you'll take to meet them. Not a "Strategic Plan" filled with self-evident truths that takes too much of your time to draft and ends up saying little because it tries to say everything. Just a plan, an idea of where you want to go, how you're going to get there, how you'll know when you've arrived, and how long you think it will take. It doesn't have to be perfect. It doesn't have to be long. It doesn't have to be complex. You don't need to account for every potential development, you're allowed to make mistakes, you can always change the plan later when you discover this idea doesn't work or that one does or this client doesn't have as much work as you thought it would. It's your plan after all.

Would you be more excited about 2009 if you owned your future? Write your plan and you will. 

What's on your menu?

“Change the menu.” That’s part of the recommendation Jay Ehret (The Marketing Spot) gave his client, Eddie’s Trackside Bar & Grill. What would you do with that advice? What’s on your menu, and how does it appeal to your clients and potential clients? How could you change it? 

It’s not hard to see the lists of services / practices / experience / skills at many law firms as menus, naming anything and everything you can find in the kitchen (a high-end kitchen that doesn’t list prices on the menu, mind you): 

“How’s the cross-border acquisition today? Good? Excellent, I’ll go with that then, an acquisition in the chemicals industry in Brazil. Can I swap out the acquisition finance for a side of your labor, FCPA, and tax medley? Yes, it does look very good....”

What if your menu wasn’t a list of every type of deal you’ve structured, every type of client you’ve represented, every type of dispute you’ve worked on? What if you didn’t list facts and figures, but told stories about how your work helped your client meet its business objectives? What would your menu look like if it were written for the client, not for your lawyers?

It’s clear that the legal profession is going through profound changes in the current economy. More than ever, clients must evaluate the legal services they get through filters of “value” and “service,” and reward only those firms that provide long-term business solutions, not short-term legal fixes. It will be hard for lawyers and firms to change the way they do business, to change the way they value and charge for their services, to change the way they determine success or failure as a function of their client’s business results.

Why not let your menu be the first thing you change? It won’t be an easy change to make. It won't be the hardest, though, and it just might make some of the other changes less difficult. How do you think your client will react when she doesn't hear, “Hire us because we have significant experience in a broad range of public and private M&A transactions of all sizes in jurisdictions around the world”? When you ask instead, “What's the problem, and how can I make it go away?”

Why don’t you find out?  I’m sure you’ll be pleased with the result. 

What's the problem with the billable hour?

As the battle to eradicate the billable hour wages on, I can't help but think that, in spite of all of its warts, it is still a pretty efficient way to compensate lawyers for their work. Yes, it can reward inefficiency. Yes, it emphasizes quantity of work, not quality of work. But isn't frustration with the billable hour a symptom rather than the problem? Does that particular billing method produce a negative impact on the delivery of legal services? Are clients getting bad work because of the billable hour? I cannot imagine a situation in which that were true (but welcome correction). 

Isn't the real problem one of value, trust and service? When clients say they are unhappy with the billable hour method, aren't they saying they feel like they're paying too much for their legal services? That the perceived value of those services does not equal the cost they've been asked to pay? Legal services have to be paid for, and by-the-hour is a reasonable way to do it until you think your lawyer spends unnecessary time on your matter, or charges too much for her time, or isn't telling you the truth when she says it will take 20 hours to resolve your problem. And if that's the case, then the billable hour isn't to blame.