INDUSTRY ANALYSIS/THE 'S' WORD
The 'S' Word
Published on Mon, April 18 byJeroen Plink
logo

The model for law firm sales lags far behind that of other businesses, even as new technology and data solutions become available to support business development. There persists a notion that business development in law firms should be predominantly driven by partners and through word of mouth. By contrast, SAAS companies have developed highly effective sales strategies, leveraging digital tools and a data-driven approach. This article will discuss the advantages for law firms of steering away from a partner-focused sales model to one based on the proven strategies of SAAS companies.


Business development and sales tactics in law firms remain largely entrenched in tradition, with marketing professionals failing to adopt the new tools offered by the market.


In other industries sales practices have changed dramatically as the software supporting business development has evolved. SAAS companies in particular have proven success by adopting data-driven approaches and leveraging automation tools. If law firms adopted similar strategies to SAAS companies and avoided relying exclusively on a partner-driven sales approach, they could drive more sales and significantly increase revenue.


Partners are not Sales People


The partner-focused sales approach used by law firms for decades has been successful in many respects. Studies show that many top tier firms get most of their work through word-of-mouth or repeat clients. There is considerable risk of confirmation bias in these studies, however. It’s hard to know what additional work law firms could be bringing in if they deployed additional mechanisms for business development beyond the tried-and-true partner model.


The typical law firm structure means that, in addition to the hefty legal responsibilities that come with the promotion to partner, there are also significant business development expectations. Partners are not natural salespeople, so it’s problematic when lawyer-driven business development practices constitute the main sales strategy for a firm. Unlike a trained salesperson, with years of successful experience to show for it, a partner rarely has sales training and legal expertise is a world away from the tactical planning that makes for successful sales.


Requiring partners to be almost exclusively responsible for generating their own business does not set partners up for efficiency in practice, and potentially reduces their ability to leverage their most substantial skill set. Partners are legal experts, not sales superstars. Similar to how it would be absurd to ask a senior software developer to generate new clients and close business leads, it is inefficient to ask partners to take on the full weight of this dual responsibility.


To further understand this dynamic, we sat down with Jeff Berardi, Partner at Baretz+Brunelle. Jeff confirmed that most law firms do not maintain formal sales functions. Although there are exceptions to the rule, the reality is that only a small percentage of firms have made a concerted effort to recruit, train, and manage outside sales professionals who are not existing partners in the firm. He also shared that there are often robust business development departments in law firms where the sales professionals serve in a sales support role. They provide law firm lawyers with assistance and direction on client pitches, proposals, event management, and in other related support activities.
Changing how law firms do sales is an important opportunity for growth and increased revenue. Law firms could be bringing in much more business by leveraging new tools and adopting modern-day sales models.


Current Systems are not Working


Although most law firms invest in customer relationship management (CRM) software and corollary strategies, such as email outreach campaigns, these investments consistently under-deliver for a few reasons:


1. CRM platforms used in law firms rely on lawyers' manual input. Lawyers are tasked with spending hours that could be spent billing manually imputing data on their clients and potential clients instead of relying on automation software.
When relying on manual data entry, these systems are scant, providing inadequate data to be truly helpful.
 

2. Processes are rarely implemented to ensure that pertinent data is automatically populated. If firms focused on improving the automated capture of relevant data it would allow lawyers to rely more heavily on CRM software, and free up their time.
 

3. Ultimately when data inputs are insufficient, systems become useless. CRM platforms are expensive investments for law firms but in the absence of processes to ensure the data they capture is useful, the return on investment will be low to minimal. Poor customer relationship management in any business has consequences including potential decreased productivity and growth, as well as missed opportunities in the long run.


Another issue impacting sales is that cross-functional collaboration is lacking in law firms. Jeff Berardi shared that he often sees a disconnect across the marketing communications, business development, and sales functions. If each of these functions are acting independently of one another, there are lost opportunities. Even in those situations where there is partial or full integration across these different functions, there are often additional steps or initiatives that can be taken to streamline the sales process or to make it even more effective. To illustrate, Jeff shared the following example: “we are seeing really great results for clients that employ a campaign-based approach driven by compelling content that blends opportunities related to greater awareness of services, direct engagement with clients through the use of thoughtful content, and targeted client development efforts.”


The SAAS Sales Model


A critical aspect of a SAAS sales model is demand generation. Many SAAS companies will have employees dedicated exclusively to generating potential clients. Instead of waiting for inbound clients, their responsibilities concentrate solely on developing leads, increasing awareness and calling clients. They are specialists with extensive training in sales development and years of experience in leveraging data-driven approaches. There are many benefits to this model, including the ability to drive proactive outreach campaigns and undertake data-driven prospecting.


From a marketing perspective, law firms could similarly leverage digital marketing trends to drive more business. Law firm marketing departments typically focus on broad-based, mass communication marketing tactics, including client alerts, thought leadership distribution, webinars, and social media. In contrast, B2B businesses opt for a more personalized, behavior-based approach to marketing. As a proactive alternative, most other industries have adapted to a model that pulls clients into highly personalized digital campaigns that align to their specific needs at the precise right time.


To further understand the opportunity law firms stand to gain from embracing digital marketing, we spoke with Shade Vaughn, an expert in data-driven marketing. Shade is the Chief Growth and Communications Officer at Paul Hastings, an international Amlaw 25 firm based in New York. Shade was hired from outside of the legal industry from Cap Gemini, in a bold move that appears designed to modernize the firm’s approach to business development. Shade shared that the foremost opportunity for law firms in digital marketing is within behavioral intent tools. These tools are "illuminating the dark funnel," he explained, meaning they can help lawyers become exceptionally good at understanding what their current and prospective clients need. It helps anticipate incoming business and what the client needs.


Shade explained that reaching out to prospective clients after they appear in the media or after a ruling that potentially impacted them is too late. Instead, lawyers should look to prospective clients' behavior patterns to decipher their next strategic move. By understanding what clients are researching online, the content they are consuming, and the remarks their leadership is marking in the media, lawyers can understand a client's business strategy. The next step entails discreetly exposing the prospective client to the law firm's experience, either through personalized advertisements, sponsored content, or even paid media. Shade emphasized that when there is a spike of interest in the law firm's advertising, there is a perfect opportunity to pick up the phone to suggest a meeting.


New Approaches and Modern Technology


There are now hundreds of offerings on the market that help law firms sell their services proactively and more effectively. In order to provide some examples, we sat down with two experts, Ed Walters from Fastcase, David Kamien and Mind-Alliance, and Laura Leopard from Leopard Solutions. We conducted interviews to understand their experience and opinions on how law firms can leverage technology.


Tracking Clients' Market Activity


The fundamental start-up theory prioritizes a client-first approach, where a deep understanding of clients and their pain points is crucial to any successful product. Law firms can benefit tremendously from tracking their clients' market activity.


Ed Walters from Fastcase, a tool that provides cloud-based software for lawyers, helped us understand the current gaps and benefits. Ed shared that law firms currently track their clients' activities, but in an anecdotal way where they read legal news for mentions of a client. Proactively anticipating clients' needs and pain points is essential for business development. When an important client of a firm is sued, that client often has many options for representation, and it might be the most proactive firm that wins the client's business.


Ed shared that a few firms have taken this approach by creating direct APIs from state and federal docket tracking services such as Docket Alarm. Some of these APIs can be set up to trigger direct emails to a firm’s relationship manager, or to automatically update the firm's internal business development tools. This kind of API alert no longer requires a software developer – it can be as simple as a search for the client's name turned into an email alert or an API that syncs directly with the firm's CRM or KM system. Firms with automated alerts can proactively reach out to clients days before litigation is reported in the news, which provides an actionable strategic advantage in winning business.
 

Company Profiles and Intelligence Reports 


When law firms opt for producing company profiles and reports manually, it can overburden human resources such as research services teams, and harm the efficiency of business development activities. On-demand automations save time and provide effective alternatives. MindPeer BD is an example of one of these automation products, allowing partners to easily access automatically generated information regarding prospective clients. In fact, David Kamien, CEO at Mind-Alliance, believes that the key to making this practice more efficient is templated automations and API-driven feeds from multiple data sources. Within this process of knowledge sharing and collaboration, it is essential to avoid email traffic with static PDF, Word and PPT attachments. David advocates instead for dynamically updated company profiles that are interactive and can be used asynchronously. This practice ultimately provides partners with high-value client insight reports, and frees up data analyst’s time.


Leveraging Data


Law firms manage much internal data on employment, deals, and client information. In many cases, however, other types of internal data are tracked poorly. For example, alumni data, which firms use as a vital business development tool and recruitment, is often incomplete and outdated. Laura Leopard, the CEO of Leopard Solutions (a software that provides legal recruiters, attorneys, law firms, corporations & law schools with legal intelligence data) shared that "having up-to-date and accurate internal data provides the firm with a report card on how well they are doing with lateral and entry-level hiring. The strength of any data set depends on the quality of the data, which is why we place such a high focus on quality at Leopard."


According to Laura, data should be the backbone of decision-making for two main reasons. Firstly, firms need reliable benchmarking data to see how well they are doing compared to their peers. They need to identify competitors in each location and each practice area. Unfortunately, their outside data is often lacking, meaning they require data service providers such as Leopard Solutions to supplement it. Secondly, Laura believes that data-based decisions are the best path to success. Data provides the framework for essential decisions such as next hires, competitors, new office locations, etc. 

 

The benefits of data-based decisions are vast, but one large plus – especially in the current market - is that they can lower the risk of employee moves, both big and small. Being grounded in good, solid data grants more confidence in making big decisions.

 

*This article first appeared on LinkedIn, on April 18, 2022. It has been republished here with permission of the author.

We use cookies to monitor the performance of our website, improve user experience, and assist in our marketing efforts. By continuing to browse our site, you agree to our use of cookies.