In a catch up conversation with Ed Schecter this morning, we discussed a subject about which we are both passionate: how law firms can strategically grow revenue. This isn’t a new conversation at all. In fact, it’s a tired one that we’ve both had countless times in our careers. The economy is slowing and mid-sized and global law firms in the U.S. and abroad are feeling it. Double-digit revenue increases and profit margin upswings are unlikely over the next unpredictable number of months.
But firm leaders are still buoyed by the possibility of revenue generation above and beyond what they reported last year. Here is a quick rundown of the most popular options you have available:
- Work harder
- Raise hourly rates
- Improve client relationship management so you are mining all the opportunities at existing clients (a/k/a/ form client teams)
- Hire laterals with large, portable books of business
- Conduct business development training
- Shed practices that are producing lower margin work
- Shed lawyers and staff
- Reduce overhead with wholesale cost-cutting
- Merge and/or acquire
But for #3 above, there is no mention of clients – the very people that partners are hoping will write bigger checks to their firms. And, other than mergers and acquisitions, there is nothing very strategic about most of these approaches, even though most mid-sized and global firms have all of them in their quivers – and at any given time, have embraced every one of these tactics as the solution to declining or flat firm revenues.
Here is one initiative that is not on the list. It is strategic, has significant revenue generation potential and can effectively influence all of the nine opportunities above. It’s an initiative that marries people, process and technology and focuses all the attention and effort around two things: saving lawyers time and making them more money.
(For several years, I have described what I do in that very nutshell.)
It’s a fact that the requests for proposals (RFPs), RFIs, pitches and other materials have skyrocketed in the last four years. Marketing and business development professionals estimate the increase as four to five times higher today than in 2008. As a result, AmLaw 100 and 200 firms are taking a fresh look at how they respond to the volume, the demand for different types of information, and practically, how it gets out the door to the prospect or client.
Proposal center and experience management projects are typically initiated by the marketing/BD/proposal team, yet often controlled (management and budget) by the IT department who are, arguably, the most removed from the buyers of legal services and the lawyers who hope to serve them.) Consequently, these project planning sessions are too often focused on the tactical features and functionality that a particular proposal writer or business development manager wants, rather than a strategic discussion about how the firm can compete better, improve its service delivery, get closer to clients and win more often.
How does knowing what buyers of legal services want from their lawyers influence the proposal center and experience management planning process? Consider this:
1. Content is the most critical aspect of any proposal. How compelling and relevant is your content around legal project management in the M&A industry, for example? And how does it differ from your LPM content for patent litigation? Clients say they want LPM because it has the potential of streamlining workflow, creating efficiencies and saving them money. How are you responding to this requirement, and anticipating their next one?
2. Experience is the most vital subset of content, but most firms struggle with how to find it, parse and sort it, and package it. Given that buyers of legal services want to know what you’ve done, for whom you’ve done it and what you can ultimately do for them, having ready and easy access to the most germane experience should be your top priority. In an earlier blog post, I noted that the ownership of experience management has moved from the IT department up through the firm and is now on the desks of your executive committee members. Effectively gathering, managing, manipulating, leveraging, overseeing and packaging lawyers’ experience is one of the most strategic and client-friendly things you can do, and it will increase revenue over time.
3. The proposal template has significantly evolved over the last five years from a simple firm-logo-in-the-header Word document to a complex, magazine-style PowerPoint or Word document that presents the firm’s material in a graphically pleasing, visually striking way. The firm’s branding is assured, and the firm is differentiated simply because many of its competitors are way behind this design curve. The template is created to best showcase what clients want to know about you.
- 4. Of your X-number of proposals that you’ve submitted since the first of the year, how many have you won? How many times was your patent litigation team for the pharmaceutical industry featured in proposals that had a China component in the last 12 months? How many proposals resulted in a formal beauty contest or in-person meeting? Of those, how many did you win? When you lost the litigation work to a competitor firm, how many times in the last year did you lose to that firm and that lawyer? (Don’t you think that lawyer would be an ideal lateral candidate? You can calculate with some certainty the dollar-amount of the business you’ve lost to him.) Why did you lose? When you won, why did your competitors lose – what was it they did that you should know? (If you conduct a formal win debrief, your clients will tell you.)
If you can’t answer these questions within seconds (yes, seconds), take a step back and view your proposal center/experience management people, processes and technologies more strategically. Every answer to every question is business intelligence that you can use to craft smarter responses that can drive future revenue.
These are just four aspects of a comprehensive proposal and experience management solution that are designed around your revenue and growth goals, and making your firm more client-friendly; but, there are many others. Such are the planning conversations (among others) that should dictate features and functionality, and guide the design of your tools and processes.