Nine Ways You’re Losing Business (part 6)

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Welcome to part 6 of a 10-part series, Nine Ways You’re Losing Business—and What to Do About It. 

Reason No. 5 You’re Losing Business:
You don’t know how to say no.

If you don’t have firm guidelines that help you determine which opportunities to accept and which to decline, you’re losing business.  That’s true on two levels.

1. Saying yes to one opportunity always means, as a matter of inarguable fact, saying no to something else. Accepting Client A means that you may not have bandwidth available when Client D comes along (or that, if you accept Client D, that time pressures may reduce the quality of your work product or client service). Taking on a leadership role with one organization means that, at least for the time being, you won’t be able to seek a leadership position with another. And choosing to write three articles that will appear before your ideal clients may mean that you’ll have to give up a few hours of sleep.

Choosing to grab one opportunity and let another go for now may be a wise decision or a foolish one. Only by being clear on your objectives can you know which is which. For instance, if you’re accepting a leadership position in a group that’s populated by your ideal clients or referral sources, even giving up a similar opportunity may make sense—unless activity with the second group would deliver an equivalent result with less of a time commitment.

That’s why it’s so important to create a business development plan and to track your activity against it on a regular basis. Your plan will let you weigh an opportunity against your objectives as well as against other opportunities, known and unknown. If you accept an opportunity without due consideration or just because it seems like a good idea and you don’t have anything else planned runs a high risk of getting you sidetracked.


2. Accepting a troublesome client or an issue that is not a good fit for your practice will get you business in the short term, but it likely will cost you business in the longer term. Agreeing to work with a client means that you’re accepting that client’s matter, that client’s foibles and habits, and all of the problems that accompany the client and the matter. When the fit is good between you and a client, that’s fine.

However, when the client is overly demanding or unresponsive or belligerent or when the matter is itself problematic, you can create a time-consuming and a frustrating bog for yourself. Many matters will include bumps and moments of frustration along the way. When you get wrapped up in a matter with more than its share of problems, your attention will be diverted from other matters and other clients.

Before you ask for the business, you must always consider whether you want the business. If you don’t want the business, you must be able to say no.

As difficult as it may be to take on an opportunity or client that isn’t a good fit for you, the real loss is in the work that you could have done instead.  Let your business development plan be your guide.

Nine Ways You’re Losing Business (part 5)

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Welcome to part 5 of a 10-part series, Nine Ways You’re Losing Business—and What to Do About It.

Reason No. 4 You’re Losing Business:
You don’t invest in your practice.

When I was growing up, I loved a Kingston Trio song called Desert Pete, which taught me the concept of priming a water pump, or using a precious resource (water in this case) to produce more of it. The song’s narrator describes his reluctance to pour water into the pump when he’s so thirsty, but taking that leap of faith pays off.

Unsuccessful lawyers resist investing time and money into business development; successful lawyers understand that it takes money to make money and that a practice can never grow without a significant investment of both time and money. If you don’t get this lesson—if you’re tight-fisted with time and money even when using it well would lead to more and better business—you’re losing business.

It costs thousands (and thousands and thousands) of dollars and unimaginable amounts of time to become a lawyer. That education is an investment that can pay off handsomely, though law school is no longer viewed as an easy decision or a certain career path thanks to recession-era changes in the job market and in the perceived value of a law degree.

However, your investment doesn’t end on receipt of your law degree.  You know about ordinary business expenses and CLE credits, but how do you look at investments required for client service and business development purposes? In fact, do you see investments, or do you only see expenses?

You’ll need to make investments of both time and money in several categories to grow a thriving practice:/strong>

  • Business development activity: Whether it’s purchasing holiday cards and writing a short note in each, paying for membership in an organization and attending meetings, or hiring someone to do SEO on your website, you’ll need to invest to grow your practice.
  • Business and business development education: Law schools should offer foundational classes in business management and business development, because every lawyer needs to understand those two topics. However, such classes are still infrequent. Accordingly, you’ll need to invest time and money in learning what you should have been taught in law school. Even when you get past the foundational level, continued growth requires deeper education.
  • Technology and infrastructure for client acquisition and service: Technology of all kinds, from an iPad to a client relationship management system, can be useful as you seek ways to expand your practice and to better serve your clients. 

To make smart spending decisions, use this process.

  1. Determine an annual budget for your spending. Depending on your practice setting, this budget might be set by the firm that employs you, or you might have to decide how much of your own income you’re willing to invest. Lawyers who skip this step either overspend or underspend, and each will negatively impact the business that is your practice. If your firm provides a budget for you, be sure it’s sufficient to meet your needs.
  2. Evaluate your potential expenditure to determine whether it’s a cost or investment. No matter how promising or enjoyable, an expenditure that doesn’t produce results is a cost, not an investment. Read this blog post to learn how to make the call.
  3. Be sure that you include a line item for education in your budget. Business development education can include attending workshops and conferences, hiring a consultant, purchasing books, and more. Especially when you can get individual feedback and assistance, you’ll find that investing in education will help you to grow much faster than you would if you work alone. And continued investments will help you increase the level of sophistication in your business development work.
  4. Be sure to track your activity and results and review your process on a regular basis. When you do so, you’re able to make evidence-based decisions to stop activities that aren’t working and to continue or even expand the activities that are working.
  5.  Know the average lifetime value of a client so you can make smart decisions. Should you spend $25,000 for consulting or an SEO consultant if you can expect (conservatively) to gain one new client as a result? If your average client value is $5000, absolutely not; if your average client value is $75,000, you should make that investment in a heartbeat. 

While each of these questions pertains to money, you should make the same evaluation to determine where to spend your time and energy. 

How do you make decisions on your business development budget? If you don’t have one yet, start today. When you make smart spending decisions, you increase your chances of rapidly growing your practice.

Nine Ways You’re Losing Business (part 4)

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Welcome to part 4 of a 10-part series, Nine Ways You’re Losing Business—and What to Do About It.

Reason No. 3 You’re Losing Business:
You’re indistinguishable from other lawyers. 

Very often, clients view one lawyer as essentially indistinguishable from another in the same area of practice. Especially for legally unsophisticated clients, a lawyer is a lawyer is a lawyer, and as long as she can handle the matter for the client and she “looks” ok—decent website, decent biographical sketch, decent office and staff—the assumption is that the lawyer will be adequate to meet the need. Even for more sophisticated clients who regularly hire lawyers, it can be difficult to find meaningful distinctions between competitors.

You have a way of approaching your practice and your clients that is partly innate and partly developed over the course of your practice. I call this your Attorney Avatar. I’ve identified six Attorney Avatars that describe practitioners: the Personality, the Partner, the Prophet, the Guru, the Guide, and the Gun. Each carries unique attributes and strengths and defines certain areas that will require attention to build a strong practice.

When you understand who you are as a practitioner, you can develop your attributes and characteristics to create a specific and systemized experience that you create for clients and potential clients.  Of course, you must marry your clients’ needs with your own approach to practice, but when you keep both in mind you’ll create an experience that is unique to you because it’s driven by your attitudes and beliefs about what makes for a good practice and a good practitioner.


When you combine your Attorney Avatar with your Marketing Identity, which describes your natural skills and tendencies in the way you approach marketing, you design an initial experience that carries from the first moment a potential client encounters you (whether that’s via an article you’ve written, a presentation you’ve delivered, a visit to your website, or a personal meeting) throughout the course of the relationship.

The client experience can include everything from relations to education to recognition. Ask yourself, what impression would you like a client to have on first encountering you and your practice? How would you communicate that? What do you need to communicate to your client to orient him into your practice? What does your client need to know about the process of his matter and how to work with you? Everything you do, intentional or otherwise, creates a client experience.

When you know your Attorney Avatar (are you, for example, a Partner who focuses on client collaboration or a Gun who tends to have a high volume practice marked by specific processes and procedures to keep matters moving?), you have information that allows you to design a client experience in so doing to distinguish yourself from other practitioners. Ask yourself these questions to help you get a handle on this:

  • How do you approach your clients and your practice?
  • Do you have particular skills or experience that’s valuable to clients?
  • Do you offer extra resources that help your clients?
  • Do you have an unusual and effective approach to your practice?
  • What non-legal steps do you take to orient your clients into your practice?
  • How do you (or how should you) help clients understand how their matters will proceed?

When you know your clients and you know yourself, you can see not just what to bring forward to get and keep the business, but also how to do it. If you have useful experience, for example, the way you present it can significantly affect how a potential client will perceive that experience. 

Knowing your Attorney Avatar and using it to create a unique client experience will help you to distinguish yourself from other lawyers. If you fail to do this, you will lose business.

Nine Ways You’re Losing Business (part 3)

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Welcome to part 3 of a 10-part series, Nine Ways You’re Losing Business—and What to Do About It.

Reason No. 2 You’re Losing Business: You don’t really see your clients.

Sure, you see your clients. You have meetings with them, you talk with them by telephone or videoconference. But do you really see your clients? Too many firms and lawyers view their clients as one-dimensional objects of practice. Client numbers are assigned, and the client comes to assume that number as an identity.

You don’t ever intend that to happen, but the press of business can make it hard for you to keep up with clients individually … And that’s why you must have a system in place for making sure that you recognize what’s happening with and for your clients. 

This is a problem that’s endemic to rainmakers who are seeking to grow a book of business above all else. You court a potential client. You’re interested, highly responsive, you make an effort to learn about your potential client’s interests, to engage that person in business and personal conversation, to be your most appealing self. And then as soon as you get the matter, that deeply personalized attention drops off because you’re in service mode (which often equates to maintenance mode) while you’re off chasing another client.

I once spoke with a disillusioned spouse who complained about the shift in the relationship after marriage. No more cards, no more gifts just because, conversation dwindled to the day-to-day focus on the kids and getting the car serviced and making the mortgage payment. The relationship wasn’t bad, but it certainly was dry. And then someone new came on the horizon, someone who did the things that the spouse used to do, who always brought on deep and interesting conversation, who seemed to promise a richer relationship. Suddenly, an alternative to the relationship with the present-but-not spouse appeared. This story has a happy ending because of the marriage vows both took, but no client will take a vow to stay with a lawyer for better or for worse.

That’s how marriages end, and that’s how clients get poached by other lawyers. Not necessarily because the courting stops (though, really, who doesn’t like to feel important, especially when paying a hefty fee?) but because the attention makes a difference. Understanding what’s happening with a client can significantly affect the way you approach the client or the representation itself.

Do you know what your clients are concerned about? Are you aware of their successes and failures, and do you respond appropriately? When’s the last time you sent a baby gift, a card or flowers to acknowledge a death, a note signed by your staff to acknowledge a business success?

Create a system that ensures that you get information about your clients (like Google Alerts) and that you check in with your clients regularly, to: 

  • take their temperature on their experience with you
  • discover any significant business or personal changes that may affect the matter you’re handling
  • discuss what’s going on with them in the bigger picture

Don’t bag a client and then move on: build the relationship as you deliver the service you promised. If you fail to do this, you will lose business.

You’re losing business, and here’s why

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Last week I introduced a 10-part article that I’ll serialize in this newsletter titled “Nine Reasons You’re Losing Business“..

Here’s why you’re losing business…

1.     You aren’t creating value for your clients.

Let’s assume that you do good work from a substantive perspective and that you deliver that work on time every time. That’s a great start, but it isn’t enough anymore.

Historically, clients have measured value received from an attorney based on the successful outcome of a matter. Did you win the case? Did you get most of what the client wanted in the negotiation or contract? If you did, you delivered value, and clients would usually be satisfied.

Today, however, clients are more sophisticated than ever before. They’re often able to evaluate the cost of the successful outcome in terms of dollars, time, missed opportunities, and resources consumed. Whether that evaluation is correct isn’t the point. The point is that a good outcome is just the tip of the iceberg in value creation. 


Part of value creation is about money. Ask yourself:

  • Do you offer alternative fee arrangements that are a win for your clients and for yourself?
  • Do you look for ways to save your client money even if it means losing some income you would have received otherwise?
  • Are you implementing legal project management and other systems to streamline the business side of completing client work?

Money is an important part of value creation, but it’s only one part. To get a full picture, ask these questions:

  • Do you understand where the matter you’re handling fits in the context of your client’s life or business?
  • How often do you bring proactive solutions to your clients? Not the kind of proactivity that’s code for more work and more fees, but spotting issues and opportunities and trends, then delivering that “need to know” insight before your clients know they need to know.
  • Do you make it easy for your clients to work with you?

And the key question: can you identify right this minute exactly how you’re bringing value to your top clients? Doing the work well isn’t a good enough answer in this economy. Extra credit for those interested in growing your practice: how do you bring value to your top prospective clients and your key referral sources?

If you aren’t paying unwavering attention to creating value for your clients, you’re losing business as a result.

Nine Ways You’re Losing Business—and What to Do About It

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A longer newsletter than usual this week, with three important sections.

1. A must-read article for those of you working in large firms: Pay Gap Increases Between Equity and Non-Equity Partners. Two brief excerpts will show you why you can’t miss this:

“Equity partners averaged $971,000 in annual compensation, versus $338,000 for nonequity partners, according to MLA’s third biennial survey of what partners are paid at large law firms in the United States. While average pay for equity partners has risen nearly 20 percent from $811,000 since MLA’s first survey in 2010, nonequity pay has remained relatively flat, increasing just $2,000 over the same period.”

And

“The growing gap between equity and nonequity partner pay mirrors the disparate amount of business the two groups of partners bring to their firms. ‘The correlation between originations and compensation is getting stronger,’ says Alan Olson, a law firm consultant at Altman Weil Inc. Olson says firms are ‘rewarding and investing in those partners that can develop and maintain a remunerative legal business.”

I’ve suggested (and the data supports the idea) that nonequity partners are in a tenuous position unless they’re making a strong record of securing business. This article provides deep insight on this point and data on pay disparities.

2. This week marks the start of a 10-week series in this newsletter, titled Nine Ways You’re Losing Business—and What to Do About It. I’d originally planned to send it as a single article, but it’s nearly 15 pages long! This week starts with the premise of the article, and you’ll find the problems and solutions over subsequent newsletters.

 

Nine Ways You’re Losing Business—and What to Do About It.

Unless you’ve been asleep under a rock, you realize that the practice of law has changed significantly over the last six years. Unless you’ve been paying unusually close attention, though, you may not realize that the practice has experienced a quiet revolution in the last fifty years. That earlier revolution in many ways prompted the later one, by creating dreams of “wealth by JD”; an expectation of certain financial success simply by virtue of practicing the genteel profession of law.

Those expectations couldn’t be realized in a vacuum, however, and new pressures came into play for lawyers: the inception of the billable hours, ever-rising hours requirements, a relentless focus on profits per partner in larger firms, and a certain arrogance toward clients that was masked in the professional approach to dense problems that clients didn’t, perhaps couldn’t, understand. That attitude started to unravel with the advent of lawyer advertising, and the expectation of working hard for easy money started to crumble a bit over the subsequent years.

Like any balance beam, however, the weight has now shifted firmly to the client side. It’s a buyers’ market, and buyers have more options than ever: a glut of lawyers in most practice areas increasing competition, legal start-ups that challenge the notion of business as usual, technology and offshore personnel who can handle what used to be matters for lawyers, DIY solutions that appear just as good as the ones that come with a hefty invoice, in-house lawyers who capably handle much of the work that used to be outsourced, unbundled legal services, and fierce competition for a shrinking pool of clients.

It isn’t your imagination. Times really have changed that much.

And whether you’ve been practicing for five or fifty years, chances are good that your training has been pretty much the same: three years spent focusing on how to think like a lawyer and exposure to a variety of substantive areas of practice through a relentless series of cases and professors’ questions. If you were lucky (or paying unusual attention to the trends in practice), you might have had some exposure to the idea that practicing law requires more than being a good lawyer, but you probably didn’t get much (if any) education on how to run the business side of a law practice.

In a buyers’ market, understanding the business of law is critical to building a successful law practice. If you don’t get that, you’re doomed to struggle. And you have to keep your eye on the trends and shifting pressures so you can adapt to economic, social, and business changes. That’s a tall order on top of other practice responsibilities.

There are nine key reasons why your practice is stagnant or shrinking. The good news is, once you understand this, you can make changes (starting with your own vision and understanding, then expanding to the way you practice) that will let you build the practice you’ve always wanted.

Next week’s newsletter will cover reason #1: you aren’t creating value for your clients.

What’s your vision for your practice?

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Last week, I attended a business seminar focused on hiring and managing employees. I was surprised that the program started by asking us attendees to identify our business vision and what we stand for. I was even more surprised to find how difficult that was to do!

You may have heard the distinction between working in your business as opposed to working on your business, popularized by Michael Gerber’s The E-Myth. The former is what you do to earn money, and the latter is what you do to design and build your business.

Lawyers, like other business owners, tend to spend your days working in your business: seeing clients, writing documents for client services, having meetings about client projects, and so on. And that’s good and important work, without which the business that is your practice would cease to exist.

 

Marketing lives and thrives, however, when you’re working on your business. That’s when you come up with a new way to talk about what you do and identify an under-served client sector that needs your services. That’s when you come up with a great idea for an article, you write that article, and you consider who might help you land a speaking opportunity to develop further and share what you wrote in the article.

So, here’s today’s question: how much time are you spending on your practice? And is the time you’re spending effective?

Effectiveness is driven by not just the degree to which you’re able to raise your professional profile and the business you bring in, but also by the number of smart ideas you have and implement. As Seth Godin writes, “Pretty good ideas are easy. The guts and persistence and talent to create, ship and stick it out are what’s hard.”

Take some time today to work on your business. If you don’t know where to start, start with asking what is your vision for your practice. Consider your practice area, your sub-niche within that area, the clients with whom you work, how you serve those clients, and your practice setting, for starters.

Consistency Makes it Simple

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I often enjoy the EarlyToRise.com  newsletter, which recently included an excerpt from Sharon LaBelle’s book The Art of Living, which distilled Epictetus’s The Virtuous Are Consistent as follows:

 

“To live a life of virtue, you have to become consistent, even when it isn’t convenient, comfortable, or easy.

It is incumbent that your thoughts, words, and deeds match up. This is a higher standard than that held by the mob. . . When your thoughts, words, and deeds form a seamless fabric, you streamline your efforts and thus eliminate worry and dread. In this way, it is easier to seek goodness than to conduct yourself in a haphazard fashion or according to the feelings of the moment. . .  

It’s so simple really: If you say you’re going to do something, do it. If you start something, finish it.” 

(Emphasis added.)


Consistency in any field builds on itself and builds momentum.

    And momentum creates at least part of the
    streamlining referred to in LaBelle’s summary of

The Virtuous Are Consistent.

it isn’t convenient, comfortable, or easy to carry through with the plans you’ve set for yourself? If so, what’s one step you could take today to shift that pattern? Can you… So here’s this week’s question: when it comes to business development, how consistent are you? Do you yield when

  • Make the follow-up call?
  • Start the article and lay plans so you’ll also finish it?
  • Finally launch that blog or video blog or podcast you’ve been thinking about?
  • Figure out what you’ll say when you introduce yourself, or when someone asks who your ideal client is?
  • Draft (or revise) your bio sketch so that it reflects not just what you’ve done, but also what sets you apart from others in your field?

Chances are that you have a list (at least a mental list) of those nagging tasks that you’ve allowed to slide through the cracks. A lot of mental and emotional energy goes into avoiding what has to be done, so stop dropping the ball. Here’s how:

1.  Develop a list of your must-do activities. They may include repetition or they may be one-offs, but you have to be clear about what’s included. Maintain the list in a form that allows you to add and remove tasks as necessary.

2.  Set a specific time for your business development activity. I recommend daily activity so that you w

on’t be thrown too far off track if you miss one appointment. Consistency, however, is the key.

3.  Keep your appointments with yourself. Even (maybe especially) when you don’t want to.

4.  Design accountability for yourself. You can buddy up with a colleague, share your promises with your mentor, use an app, or just use the Seinfeld “don’t break the chain” method on a calendar. How you do it is much less important than that you do it.

5.  Start small. Don’t decide that you’ll do everything on your list if you’ve been letting things slide. Pick one key action and do that consistently, then add on. Just like deciding to jump off the sofa and hit the gym for two hours every day when you haven’t done any meaningful exercise in three years is destined to fail, grandiose business development plans tend not to stick. 

What can you do today to develop consistency in actions that will build your practice? What are you waiting for?

Are you ready to thrive in your practice?

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Two offerings for you this week.

1. The next round of Coursera’s Better Leader, Richer Life begins on October 5. This free online course is taught by Steward Friedman and based on his bookTotal Leadership: Be a Better Leader, Have a Richer Life. If you’ve ever felt like there isn’t enough time for your practice and your family and serving your community and meeting your own personal needs, you can’t afford to miss this opportunity.Click here to register.

2.  Have you ever stopped yourself from applying for a job because you aren’t 100% qualified?  An interesting post on the Harvard Business Review Blog Network addresses this situation, and though it speak specifically to women, it should be required reading for women and men alike. Not looking for a job? Read on anyway:  The discussion applies equally to responding to an RFP or asking for business.

For you to consider…Do you stop yourself from seeking to get hired because you don’t meet the requirements (or perceived requirements)? Do you stop yourself because you don’t think you can do the work?The article’s conclusion is that women should spend less time observing “requirements” that may be only guidelines or a wish list.

What does this have to do with business development?An RFP may have explicit requirements, or you may perceive that a contact is looking for certain qualifications that you don’t fully meet. Sometimes it makes sense not to answer an RFP or to ask for the business, but it’s important not to psyche yourself out of an opportunity.

Consider this:

Major decisions were made and resources were allocated based not on good data or thoughtful reflection, but based on who had built the right relationships and had the chutzpah to propose big plans.  It took me a while to understand that the habits of diligent preparation and doing quality work that I’d learned in school were not the only—or even primary—ingredients I needed to become visible and successful within my organization.

That goes double in the context of business development.

Finally, for those of you in the United States, Happy Labor Day weekend! 

Should you (could you) join a board

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Clients often ask me about the business development value of joining a nonprofit’s Board of Directors, and (as with most activities) the value varies depending upon your objectives and the board you might join. In general, board membership can be an excellent way to meet other professionals who may be relevant to your practice and to gain an extra perk for your biographical sketch. And if you join the board of a nonprofit that advances a cause important to you, you may find personal satisfaction as well.


Which board should you join? 

Consider organizations that sponsor causes in which you are genuinely interested. You can gain strong contacts from an organization that addresses topics of little matter to you, but when your interests align with the organization’s mission, you will likely connect more deeply with other board members and with the organization’s
membership more generally. In addition, because you will actually be working on the board, real interest will make the hours you invest less of a burden.

Look for boards that do not include members just like you. If you’re a partner in a large firm, you’ll likely want to rule out board that include 3 or 4 other large law firm members unless, miraculously, there’s only minimal overlap in the firms’ areas of practice. Preferably, the board you select will include few, if any, other private practice lawyers.

Look for boards whose membership includes the kinds of people you would like to meet. If you represent corporations, look for GC members. If your key referral sources are financial planners or bankers, look for those members.

How can you identify opportunities and be nominated?
When you’re looking to join a board, your connections can help tremendously. As with any other professional activity, opportunities tend to go to those who are in the flow of information. Who among your contacts serves on a board? If you’re working in a large law firm, the firm partners as well as personnel in the business development or professional development departments may be able to make an introduction.

You might also consider looking for organizations that groom upcoming board members. In Atlanta, for instance, The Atlanta Women’s Foundation offers Women on Board, which trains women in board governance and leadership skills to increase the number of women serving on boards. Those who have completed the training receive access to a directory of opportunities for board service.

Use word-of-mouth to uncover opportunities, and check online resources like BoardnetUSA.org.  Volunteering with an organization may be a good way to determine fit and to meet current board members. Consider taking on roles that relate to board members’ activities, such as fundraising and note-taking at board meetings.

Joining a board is only the first step for business development purposes: you must network effectively and build relationships. However, if you select a board well, contribute meaningfully, and develop strong connections, you may find your membership an invaluable part of your business development plan.