Coaching 2.0: A New Trend in Business Development
Twenty years ago, there were virtually no sales or marketing departments within law firms. Business was brought in "by referral only." But the tide started to change as firms grew in size and number, giving rise to legal organizations with vast armies of lawyers located throughout the globe.
Then came the downturn of '08, and suddenly the marketplace competition intensified as the “supply and demand” ratio tipped in the opposite direction. Firms adopted more aggressive marketing strategies and the notion of proactive sales became commonplace.
Today, most firms of any significant size have associate business development training initiatives either in development or in play. Sales coaching and training is a norm rather than an outlier. Most mid-to-large firms have in-house staff among whose primary responsibilities include coaching partners to become better business developers. Our industry has evolved quickly in a short period of time.
Even so, marketing budgets remain cripplingly lean, at less than 3% of revenue (and include many relatively unproductive uses such as partners’ discretionary marketing accounts), and marketing/sales/BD training is included in that anemic figure.
By contrast, law firms’ corporate clients, according to Forbes magazine, are emphasizing the amount spent on marketing relative to other types of strategic spending. Indeed, industry-wide marketing spending as a percent of firm revenues increases steadily, well into double digits.
It’s important to note that neither training nor sales are part of that marketing budget. They each have separate budgets. In fact, at leading edge companies, corporate training budgets represent 5 percent to 20 percent of total corporate profits.
Training = Profitability
There’s a clear relationship between training expenditures per employee and company financial performance. Companies with above-average training investments posted a cumulative five-year return of 137%, compared with 55% for organizations with average or below-average spending on training.
Sales training dollars need to be increased in absolute terms, but even then, they’ll need to be stretched creatively if they’re to cover a meaningful segment of the firm’s lawyer population.
That’s a problem when traditional coaching and training is such a time-consuming and labor intensive activity. Never mind the fact that, apart from immediate wins, it is virtually impossible to measure a return on the investment of a coaching conversation.
This intractable gap between growing training demand from lawyers and firms’ budget constraints has given rise to a new trend in legal coaching: virtual rainmaking training.
Legal coaches-turned-entrepreneurs are developing software solutions that coach lawyers using technology. These “e-learning” programs are finding a receptive audience among firms who want to combine cost-effectiveness and widespread availability.
A review of the learning research and literature shows that technology-based training actually outperforms instructor-led training -- not merely on the obvious criteria such as convenience, accessibility, scalability and cost -- but on all 14 of the criteria that learning experts consider definitive. These include efficacy factors such as speed-to-learn, comprehension and retention.
So perhaps firms really can have it both ways: inexpensive and effective.
Two pioneering innovators in this field are Mike O’Horo and David Ackert, founders of RainmakerVT and Practice Boomers, respectively. They’ve approached technology-based training from different perspectives, but produce a similar impact. Lawyers learn at their own pace, on their own schedule.
Training lawyers to produce business reliably has two components: “What to Do” and “How to Do It.”
Practice Boomers is weighted more to the “What” component, and RainmakerVT the “How.” Practice Boomers provides lawyers with a series of short video tutorials and worksheets offered over an extended period of time so that business development becomes a habit. “Our goal is to shift the way lawyers think about business development,” says Ackert. “The most effective way to do that is to engage them with a steady diet of ideas, challenges, peer-group discussion forums, and implementable take-aways until they embrace marketing as a fundamental component of their practice.”
“Another important advantage is Practice Boomers’ ability to track performance metrics,” Ackert observes. “Technology solutions allow firms to measure log-ins, program usage, and each trainee’s individual business development activities. This sort of hard data paints a much clearer picture of a training program’s effectiveness than anecdotal feedback and provides an important accountability framework to ensure lawyers keep current with the program.”
RainmakerVT uses scenario-based simulation in which lawyers manage an avatar through virtual sales calls, networking events, pricing conversations and so forth. At each “say/do” decision point, they choose among five responses that reflect lawyers’ current attitudes and habits, and get immediate video coaching as to why that response was or wasn’t optimal.
Simulations also enable lawyers to practice and gain virtual experience. O’Horo observed, “Unlike commercial salespeople, lawyers have limited time to devote to biz dev. Most have only a few real sales calls per month. How can you get good with so little experience? In our virtual world, they can practice, make mistakes and get coaching 24/7, privately -- nobody will see their mistakes.”
“Training’s biggest challenges are relevance and imminence”, says O’Horo. “Lawyers don’t respond well to ‘just in case, someday-maybe’ propositions. If the training doesn’t have an immediate application, i.e., solve a problem they’ll face soon, few will allocate time to it. That’s why we’ve embraced a model that allows you to buy only the lessons you need, when you need them.”
In both approaches, lawyers learn by doing. After all, you can’t learn how to ride a bike at a seminar.
Law firms have recognized the wisdom of applying technology to modernize other business functions such as finance, market intelligence and marketing communications.
Forward-thinking firms are turning to technology to enable universal sales training, and thereby achieve greater returns from business development, a business function that today’s market conditions have made mission-critical.