Earlier this year, my friend Jordan Furlong published a post in his excellent Law21 blog: How Powerful Are Rainmakers Really? In it, he shared data that suggests that the rainmakers whom firms fear as 900-lb gorillas, and treat as divas, may weigh a more manageable 225 lbs.
Why would this matter to lawyers who aren’t on their firms’ Compensation- or Management committees? Because the data shows that even very successful lawyers’ books of business are more precarious than they might think, and therefore there’s no room for complacency.
“Acritas recently surveyed a wide range of partners who had laterally moved from one firm to another. Those partners had expected that about 70% of their client business would move with them to their new firm. You know what percentage of business actually moved? Twenty-seven percent.”
You may be thinking, “OK, I get that lateral movement might be riskier than presumed, for both the departing rainmaker and his destination firm. But I’m not planning on going anywhere. Shouldn’t I be secure?”
Maybe, but as that great philosopher, Dirty Harry, urged, ask yourself, “Do I feel lucky?”
Absence of complaint ≠ satisfaction
Don’t mistake a lack of complaining from clients as a sign of satisfaction. Research indicates that most clients won’t express feelings of dissatisfaction; they’ll just leave.
This is particularly true for consumers of services, who are less likely to complain than those who purchase a tangible product. For every client who does give you an earful, research indicates there are 26 others you won’t be hearing from. Ten of their friends and associates, however, will be told about their unpleasant experience with you and your firm in high-definition detail.
It could be that making a lateral move is the catalyst that enables dissatisfied clients to cut the cord because they have ready-made explanations that are hard to rebut: “Changing firms is too disruptive.” “We don’t want to forfeit the rest of the rainmaker’s team, who aren’t moving with her.” And so on.
But, all those factors were in place long before the lateral move. Which means they’re likely in place for you, too. Or maybe not. Maybe you’re an outlier, not reflected in the data that says that only 25% of clients would refer their top outside law firm.
If you’re still feeling sanguine, consider that the 2015 Lexis Nexis Bellweather Report highlighted another perception gap between firms and clients-- 80% of lawyers responded they’re good at client service while only 40% of clients said they received good service from their lawyers.
Where might you be vulnerable?
From Mark Cohen’s article in Forbes, “A recent study of the British legal market commissioned by LexisNexis and Judge Business School at Cambridge University contains a stark finding: ‘There is unambiguous evidence of a significant and persistent disconnect between law firms and their clients.’ The disconnect has resulted in a steady migration of work from firms to corporate legal departments as well as a growing client receptivity to service providers and other non-traditional sources for legal services.
A stunning 40% of clients in the LexisNexis survey noted that senior partners of their law firms lacked more than a basic knowledge of their businesses.”
This last item is where your opportunity lies.
What business issues, problems, and challenges are your clients and prospects concerned with, and talking about? Better yet, which ones are emerging, that they’ll have to be concerned with before long?
Learn your client’s business so you’ll know what’s important to their future, not their past. That way, your ideas and you will be relevant to them, and they’ll have a reason to pay attention to you and include you in their internal discussions because they perceive you as someone with something worthwhile to contribute.
This level of understanding enables the kind of provocative discussion that The Challenger Sale revealed as most effective. In this approach, the seller leads with insight and challenges client assumptions. To have any chance at that, you have to understand the client’s business, if not better than they do, at least as well.
“How could I possibly know all my clients’ businesses that well? They spend all day, every day in that business. I have clients in many types of businesses. That’s just not possible.”
You’re right, of course. Nobody can have a thorough understanding of multiple industries and businesses. Therein lies the problem and the solution. Your current mix of clients is the product of years, maybe decades, of random client acquisition, where you probably limited your attention solely to the nature of the legal matter in front of you.
That’s not going to work any longer.
Now, any proactive marketing and sales should be concentrated in a single industry that houses a high concentration of the business problem or situation that drives demand for your most valuable service. That way, you have only one business to study and keep up to speed on. Sure, companies within the industry have different circumstances, but there are more similarities than differences.
Let’s say you’re an Employment lawyer, and most of your work is helping companies protect themselves against departing employees making improper use of proprietary knowledge at their new employer. With intellectual property now making up a huge percentage of almost any company’s assets, the old mindset would say, “I can help any company. They all have this problem.” True, but only after you’ve been found and chosen.
Instead, take a look at the Regulatory Technology space. RegTech is emerging, growing rapidly, and has tentacles throughout regulated industries. What if you focused on the banking/financial service industry? Your firm likely already has historical relationships with banks. All of them are embracing FinTech, which intersects inexorably with RegTech. Now, all you have to do is keep up with developments in financial services. That’s one industry, and essentially one business.
The variations aren’t that important. No more so than my business is focused solely on law firms. There are different sizes and types of firms, and while their circumstances cause them to address problems differently, and at different scale, they all face essentially the same problems. I have only one business to keep up with.