Building value for Law firms

Building value for Law firms

Though I had the desire, I never had the talent to be a professional jazz musician or a county cricketer; so the legal sector roadshow I took part in 2015 is likely to be the nearest I ever get to the experience of a touring performer.

450 senior lawyers (and consultants who work with law firms) gave up their time back then, to meet in one of five regional centres around the UK to learn new things, or to refresh their memories. Through the goodwill of NatWest/RBS – who organised the sessions – partners and senior managers from small, medium and large firms, heard from a variety of speakers. The main speakers were the drily witty and authoritative Stephen Gold (what he doesn’t know about growing and leading a law firm isn’t worth knowing); the men with the laser focus on getting paid and getting paid right, Robert Mowbray and Phil Wedgewood; the technically astute Executive Director of EY, Fiona Taylor; and yours truly.

We each spoke on widely different subjects, but a theme emerged nevertheless that, on reflection, bound all of our messages in common. That theme was value.

“I was keen to get across that though clients acknowledge the need for technical competence, to a large extent they take it for granted. It's a ticket to the game, no more. What they truly value is service: responsiveness, judgement, clear language, a high quality human relationship. And we shouldn't be backward in articulating our value – not just what we've done, but the benefit that's come from it," says Gold, who built up his own distinguished firm before selling to Irwin Mitchell in 2007. “And to do that you need a simple clear plan, innovation that draws on the talents of everyone in your firm, the motivation to pursue opportunities speculatively, and impatience with ‘collegiality’ if it gets in the way of improvement.”

Robert Mowbray’s message was all about making sure that billing captures value for law firms – using narrative along the way to highlight that every minute spent planning, thinking about, and preparing client-related activity has value that shouldn’t be hidden away or allowed to evaporate when preparing an invoice. “It doesn’t mean indiscriminate or unethical charging, but it does mean thinking incisively about client value,” says Mowbray.

Building value for law firms in the sales process

What was I trying to get across?

One of the questions I ask at the beginning of my talk is: "If you're the best, why don't you win all the business?". The naïve outsider’s answer might be that lawyers don’t even like to talk about selling, let alone do it; but that’s not as true as it once was. It’s one thing, though, to acknowledge the host of reasons why law partnerships and limited companies alike have to sell or die. It’s quite another to be any good at it. I’ve seen law firms appoint BD managers, marketing people, and sometimes even sales directors. They stage networking events, they put some money into advertising, and they make encouraging noises to the lawyers in the firm about cross-selling to their best contacts. But it makes no difference, chiefly because it is the lawyers themselves who actually have contact with real clients and prospective clients at the moment of decision (whether a first meeting, a panel presentation, or a major bid negotiation) and that is a circumstance which, for all their expensive training, they are simply not equipped. A lawyer cannot intuitively know how to sell to a new or existing client, any more than she can intuitively know how to mark-up the IP rights provisions of a contentious TUPE agreement.

To sell well is to master a complex mixture of specific, proven, verbal skills and repeatable methodical processes. Most commercial organisations in every sector besides professional services have specialist sales people who do just that. They have sales targets, sales and CRM systems and sales managers, and they bring business in for other specialists to fulfil; whereas the model for most law firms is different. The lawyers eat what they kill, and while they’re busy eating they don’t worry about the next meal. So they focus on using and honing the technical skills they were trained in when they qualified. They devote their efforts to being the best lawyer they can possibly be for the people they serve, and relying on their network of contacts and existing clients for business development. That’s all very laudable, except for two problems.

First, there have been times in the past seven years when there has been far from enough work to go around in many parts of the legal services market – either because of the slowdown in the economic activity necessary to generate large corporate work, or the availability of deregulated alternatives in the personal marketplace (particular in the smaller firm sector). There may have beeen improvements in the economy (partially undone by the pandemic interruption) but the recovery of law firms has been far from uniform.  At the more homely end of the market, the threat from low-cost competition in probate or conveyancing for example (from ABS or non-qualified sources or the internet) is certainly not abating.  And at the top end, large firms are finding panel rationalisation and international outsourcing of some legal functions have made things harder to sustain revenue and margin.

Secondly, the lawyer who is unskilled at selling (as most, by my definition and their admission, are) will simply respond to every early-presenting need they hear from a potential client with a solution that sounds very much like a lecture in the finer points of the law, and an avowal that the firm can act in the case, for a fee. They’ll go no further in understanding the possible impacts on the client of their existing situation that could harm the likelihood of a good outcome, whether the instruction is an international shipping insurance dispute, a child custody case, a residential boundary battle, or a master services framework agreement between two global corporations. Yet it is only in these further investigations, these demonstrations that you are prepared to understand the client’s needs in the fullest sense, that any law firm can build value for the specifically differentiated attributes, expertise or experience they can bring to the matter. And without that differentiated value, all they have left to fall back upon are technical knowledge (which everyone has) or price.

And if you are competing on price, rather than value, you won’t be competing for long.

The answer, therefore, lies in taking the challenge of selling seriously all the time. The people who have the frequent client interactions are the fee-earners; nobody else. Marketing and BD simply don’t have the direct contact right around the decision-making cycle. So each client interaction is an opportunity for those fee-earners to uncover nascent needs that might cohere into an instruction later on. This is the point where the task is to get the client to project forward and articulate their needs in ways that suggest that, at the appropriate moment, your firm is uniquely able to tackle the specifically identified problems with specifically described solutions. Any firm might need outside, expert help to do that.  Why? Because it’s a difficult skill to master, but it’s the only reliable way to build value.

About the Author
David Freedman

Written by David Freedman

David is Huthwaite's Director of Sales. He is a Fellow of both the Institute of Sales Management and of the Association of Professional Sales, sits on the Management Consultancies’ Association Council and is former Chairman of the Chartered Institute of Public Relations MarComs group. He speaks all over the world, from conferences and exhibitions including World of Learning, SAMA, APMP and many international business organisations. He has also been on the judging panels for the National Sales Awards and the National Business Awards.

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