Here’s what the survey found regarding growth:
- Existing clients are worth their weight in gold: More than 70 percent of new law firm business is via additional business from existing clients, while 10 percent comes from referrals from existing clients.
- There’s room for improvement with everything else: Beyond existing clients, other sources of new business – such as referrals from business partners like accounting or venture capital firms, new business from new clients, leads generated from within the firm, and inquiries generated by outbound marketing – all scored less than 10 percent in terms of new business effectiveness, suggesting firms may want to think twice about where a majority of marketing and business development dollars are spent.
- A mismatch in accountability: More than half (51 percent) of chief marketing and business development officers are described as having the “top chair” for growth, but only 11 percent of those C-level executives actually oversee growth, shackling marketing and business development with power but no authority.
- Process problems: Firms are not consistently applying sales methodologies to business development, and 85 percent do not track return on investment for pitches or RFP responses, making it difficult to create momentum.
Three Critical Areas of Focus: People, Process and Data
The most critical areas where law firms must focus to drive new business can be described in terms of people, process and data. Frequently cited issues include:
- People: This includes the ability of lawyers to collaborate (cited by more than 50 percent), coupled with the competing needs of business development professionals to support practice groups, industry/sector teams and client teams – more than 50 percent of business development pros are spread thin supporting various cross-sections.
- Process: Almost 50 percent of firms don’t have a formal sales methodology, and more than 30 percent have difficulty identifying prospects and/or the right opportunities to pursue. Furthermore, pitches, proposals and RFPs remain an arduous and reactive effort as firms capture data by shouting down the hall and sending mass “has anyone done…” emails practice-wide.
- Data: More than 30 percent of firms cite leveraging internal and external data to answer client and lawyer needs as a concern, and more than 25 percent do not use client feedback data in their client retention and business development efforts. There is a wealth of knowledge being left on the table!
The survey brought to light issues that are not new to anyone within the legal industry; many of these issues are related to the client-empowered era we are now in. It is no secret that most firms are trying to drive profitability up and operational costs down, placing pressure on marketing and business development to drive those efforts with at least one hand tied behind their back. But, as Winston Churchill once said, “The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.” With demand for legal services picking up for all segments in Q2 and growing competition driving firms to become client-centric, the optimism falls to those firms taking the opportunity and leveraging top talent and technology to organically capture market share.