I stumbled across an online discussion about associates’ compensation, within which comments I found this wise nugget:
“Attorneys sell their legal services to clients. Either directly at retail, when they’re partners or solos, or indirectly at wholesale to middlemen, i.e., partners, who mark up their services before selling them retail to clients.
The ONLY reason to sell at wholesale to the middleman/partner is if you cannot sell directly to the client at retail. Once you know how to get clients, you can fire your middleman, and get the markup for yourself.”
How simple and accurate is that?
If your clients are sizable companies with a GC and a cadre of inside lawyers, this analogy applies equally accurately.
There are two basic approaches to business development:
- Sell to the Legal Dept.
- Sell to the line-of-business principals
Most lawyers opt for the first approach, probably because, during the recently concluded Golden Age of Demand, it was easy and it worked well. After all, the Legal Dept’s job is, well, to buy legal services. Seems logical enough until you consider that the Legal Dept is not the ultimate consumer of your legal services and, as a result, not the ultimate arbiter of value. You could argue that they’re serving as a specialized Purchasing Dept, in effect “reselling” your services to their internal clients, which makes you a wholesaler. While they don’t mark up your charges directly, as would a literal wholesaler, part of the operating budget of the Legal Dept constitutes that virtual markup.
When the Legal Dept gives you the word that “the powers that be” have declared that legal expense must be reduced by some factor, who do you think they’re referring to? The power resides with those who take the daily risk of capitalizing and operating the enterprise. They write the checks that fund the internal law firm, who in turn fund external law firms.
Do you want to be aligned with those who make the rules, i.e., the business operators, or those who must follow them, i.e., the Legal Dept? You have a choice.
I’m not saying you should call on the business operators directly, which would surely ruffle feathers in the Legal Dept unnecessarily.
Instead, bring the business operators to you. Using trusted editorial- and social media, pursue a diligent “thought leadership” strategy to attract the principals’ attention with your grasp of business challenges in which they’re obligated to be invested. In this way, cultivate virtual relationships with the Legal Dept’s clients, and thereby stimulate demand among them. Who better to refer you to the Legal Dept than their clients?
For help with this challenge, go to RainmakerVT. On the Courses page, click on these courses:
Networking Events: Progressing from the Doorway to a Sales Opportunity -- Comfortably