Last year around this time, we surveyed lawyers and published the Lawyer Business Generation Confidence Index. We asked them to rate (1-10 scale) their confidence regarding lead-generation, lead-conversion, referral-generation, market positioning, BD skills, time commitment, and overall confidence. The results were eye-opening. In most categories, between 65% and 80% of lawyers rated their confidence at "5" or lower; 70% rated their overall confidence between "4" and "7."
Why do lawyers experience such anxiety about business development? Could it be a simple as the fact that they have so little real experience with it that anxiety is a rational response? I say "so little real experience" because too high a percentage of lawyers' BD activity is pro forma, i.e., without a concrete, measurable purpose. They're doing stuff just to do stuff. They don't review their performance after each interaction, so they don't know if they're getting better or not.
Many lawyers' BD habits are vestiges of the era of huge demand that ended in 2008, during which it was sufficient simply to show up and demonstrate that your firm and you had the skill and experience to do the work well. Most lawyers I worked with then claimed, "If I can get in front of the right people, I usually win the business." Almost none actually measured their win/loss ratio, so they didn't really know for sure, but I'm sure it felt that way to them because everybody was buying, so there were lots of wins. At the time, a simple count of wins served as the barometer of one's BD skill.
However, in a high-demand market, when everyone is buying, there is no correlation between results and skill. Under such ideal conditions, you'll get results with or without skill. There's no real need for skill improvement because things are working well. However, in a buyer's market, where the supply of lawyers exceeds the demand for them, skill is required, and you have to have a way to discern whether or not you have the skills, and whether or not your skills are improving.
Statistics for laterals illustrate this. Most laterals bring only about half of the business they projected they would. Some of the reasons for this are beyond their control, so let's give them a pass on that part. However, two years later, about 50% of those laterals aren't still with the destination firm. (I haven't seen any breakdown of who initiated the separation.) It's reasonable to suggest that a percentage of those were unable to replace the business they couldn't bring, and either were "encouraged" to move on, or chose to get out before the encouragement. If in two or three years you can't replace lost business, you probably never had the skills to begin with.
The first step in skill assessment is to know what skills are required for full competence. The list is longer than you may have thought.
- Avoid “pitching” behaviors in favor of helping buyers make informed, considered, self-interested decisions about problems of significance.
- Maintain significant business acumen and awareness of current business reality.
- Avoid “product-centrism,” i.e., an orientation to the merits of the firm’s service products, and resulting inclination to seek demand for one’s own technical specialty.
- Avoid "dry holes." Engage conversations based only on Door-Opening business issues, i.e., for which there is objective, third-party evidence suggesting strategic, operational or economic consequences of sufficient impact to require decision-making, action and investment.
- Recognize the likelihood of multiple stakeholders in this Door-Opening problem at different corporate levels. Is adept at evincing their full complement of self-interest relative to the problem.
- Conduct a disciplined investigation of the consequences of inaction (The Cost of Doing Nothing)
- Expose each stakeholder’s perception of the imputed or perceived ROI obtainable from successful solution. Use aggregate ROI to maintain premium prices and margins.
- Master the process of Stakeholder Alignment leading to reliable group decisions.
- Develop relationships based on Professional Intimacy rather than Social Intimacy.
- Earn business in a way that does not induce the client to require you to do the work, beyond the degree that you deem strategically appropriate.
- Understand, anticipate, and develop a plan to obtain timely the future resource requirements of a larger practice.
- Anticipate product/price maturity and look beyond today’s demand to prepare for a different future. Initiate discussions that cannibalize today’s declining margin services in favor of future premium-price service demand.
- Establish a defensible position in an organized market sector containing growing companies with healthy profit margins.
- Identify and provide valuable support roles that facilitate subordinates’ contribution and growth, and institutionalize the client, thus avoiding becoming the client-contact bottleneck.
- Share origination credit – and client responsibility – freely to enable you to diversify your portfolio and retain key talent.
If you aspire to generate a lot of business, reliably and consistently, this is what's required. It requires a sustained commitment of time, effort, and investment. It's definitely not for everyone.
If you read either of Jim Collins's books, Built to Last and Good to Great, you learned that the CEOs of successful companies consider the Not-To-Do list more important than the To-Do list. Beginning March 24, continuing for 13 weeks, each week ResultsMailVT will feature a Not-To-Do item offset by a To-Do replacement.