Bringing people and data together empowers firms to provide what clients demand. After all, it is the articulation of value that helps firms win new business.
In all other industries, winning business happens through a combination of customer experience and product excellence. This does not waver in the case of law firms; the product is the experience and expertise delivered by the lawyer. In that vein, business development and pricing functions must highlight the firm’s experience not just to articulate how the lawyer is a right fit for the client but also to justify cost-to-value. As we know, keeping a client isn’t just about loyalty these days.
So how are law firms creating a stickiness factor to keep clients coming back? How are they winning new business? According to recent studies, they are making the strategic investments necessary to win.
While the market continues to slump along with modest demand growth, these innovative firms are not sitting still. Looking at the firms that are pulling away from the pack and excelling in the market on all standard success metrics (demand, revenue and profits), the key differentiator comes down to spend. According to a recent Thomson Reuters study, the firms that are excelling are spending more on business development (up 4.6% compared to only 1.8% for static firms) and technology (3.2% growth while static firms added only 1.2% on a per lawyer basis). As spend grows, so does the proportion allocated to client-centric activities around the firm. According to the Legal Executive Institute’s 2018 Marketing Partner Forum (MPF) survey, client visits, interviews, and surveys not only have the highest perceived value as compared to other more latent approaches (one-too-many marketing calls) but also have seen increases in spend. The bottom line: These innovative firms are accelerating growth through strategic investments in client-centricity.
These types of strategic initiatives leverage technology to drive efficiency (hence the uptick in spend) allowing the firm’s business development apparatus to proactively pursue initiatives when it comes to targeting clients, cross-selling, collaboration, and so on — places where technology plays a key role as well. This is also seen with more traditional activities that aren’t new to business development, such as pitch generation and league table submission. These activities themselves are now beginning to take on new forms made smarter and easier with technology that leverages intelligent data capture, integration, and workflows for easier data collection, collaboration, and streamlining processes.
These types of strategic initiatives leverage technology to drive efficiency (hence the uptick in spend) allowing the firm’s business development apparatus to proactively pursue initiatives when it comes to targeting clients, cross-selling, collaboration, and so on — places where technology plays a key role as well.
Given the uplift from technology, business development has a robust source of data and the ability to quickly pull credentials together for the day-to-day needs, but also provides the bandwidth to pursue opportunities proactively — something in the flavor of a key account program that targets top clients. With the data necessary to gain a deep understanding of the client, business development can pull together offerings drawing on the firms’ strengths and the clients’ desires (which one could argue is responding to the call for law firms to listen to their clients — recently republished in ALM). It is a big step in the client-centric direction as it provides a better justification of value, something that is only bolstered as firms enter the realm of pricing — the development of which is listed as a top priority for business development in both the 2017 Intapp BD survey and the MPF survey.
Supporting these efforts has elicited cultural changes in the orientation in which firms handle client relationships. With technology facilitating and providing rich intelligence, firms are equipping dedicated resources to develop and deepen client relationships. In fact, a growing number of firms are dedicating resources to business development (outside of marketing) and adopting a formal sales methodology.
As firms become more progressive in their approach to business development, they are also expanding their horizons — specifically bringing pricing and client experience into the business development fold. Looking outside of the industry, it is the natural progression of a client-centric strategy. The outliers, the firms truly innovating in this space, are beginning to provide a packaged offering from pitch and proposal to pricing the work, monitoring the engagement to align value and ensure client satisfaction.
Law firms know they must find ways to innovate and effectively articulate their value in order to compete to win. And these innovative client-centric pursuits are giving those firms willing to make the investment a leg up amongst competition — a smart move in a time when the client is more empowered than ever.
In the second part of this blog series, I will examine pricing-to-win strategies and how best to make the case for cost-to-value.