In a down economy is it a good practice to fire bad clients?
For the attorney or business person that is looking to use this current environment as an opportunity rather than a curse I say, absolutely!
In any environment you have to make choices. You have time, resources, and money allocated. I have been working with a lot of clients who are being asked for significant discounts on their bill rate. Of course, those clients will be more than happy to pay their current rate when the economy turns positive again…right?
Are there prospective clients that simply are not going to come to fruition? A lawyer or firm may have pumped out lots of proposals, answered RFP’s and you haven’t heard back.
I am firm believer in holding on to good clients. Your definition of good will vary. Mine is one that we have mutual respect, they look at what I do as an investment and not a cost, and one that pays when they say they will pay. Simple definition and one that you can consider a 3 legged stool. If they don’t have one, the other two will fall.
If your service has value that doesn’t mean that you won’t be asked for a discount. These are tough times and that is a decision that you will have to make. It is also a decision that you will own for a VERY long time. It is a decision that will not only affect your rate with that client, but since there are few secrets, be prepared to have to stand by that rate for others. A study was done by Gartner a few years back that for every 10% of discounting, that an organization loses 33%. Those dollars being discounted are pure profit dollars.
Now may be a good time to have these conversations with clients. Asking business questions, developing success metrics tied to value. If 85% of business comes from existing clients that seems a pretty good place to start. Setting up mutually agreed upon metrics by which you and they measure the investment is like stacking the deck in your favor when they come calling wanting to trim rates. Make yourself invaluable or give yourself a measure by which you decide if this client is in fact worth it to you. Mutual respect.
Existing clients ask yourself:
Is this a rate that I can live with?
Am I buying the business?
What are the clients expectations?
How much time is spent managing the clients emotions?
Do I respect them and do they respect me?
Am I/ or is my firm having to wait for payment past our agreed upon schedule continuously? How much time and resources am I committing to this?
Am I the best counsel for my clients needs? (Am I taking this client on effectively when my real niche of practice is something else?)
Are there other issues that I can be assisting them with across other verticals and practice area?
Prospective clients are a different reality. A lot of lawyers and firms commit a lot of time, effort, and resources to the sunshine pump. Keep pumping because hope springs eternal. When in fact after all of this commitment you realize that you have a septic pump. No one wants to clean out that pipeline and fill it back up with new prospects. So you follow up, call, email, text message, sit outside their building and bang it out on jungle drums. Still nothing. Meanwhile, who has the power, and when will they start to use it?
Take some time and put together a list of all prospective clients that you have sent some form of proposal to that is more than 30 days old.
Send a letter effectively pulling that proposal off the table. A lot may have happened to them and to you over a period of time. Circumstances change. In the letter, explain that you would like to pull the proposal off the table and have the opportunity to meet with them and discuss their needs in more detail. Maybe there were areas of value that we not covered before or you simply did not ask the business questions to determine value. If they were shopping for price do you want to play?
One of two things will happen. They will not respond in which case how good of a prospect were they? They will respond and provide you an opportunity to reengage the process, maybe leverage you and your firms offerings more effectively.
This shouldn’t be rude. You are simply establishing mutual respect in the beginning of a working relationship, or identifying if you are simply a commodity that has little to no value to them but a high cost. Better to know that up front.
Questions for prospective clients:
Do I fully understand their environment and can I provide the best service to them?
Do they see the value in my services?
How will success be measured in this business relationship?
Is this measurement mutually agreed upon?
Is this business worth winning?
Is this an opportunity that I can/ should refer to another?
Why are they looking for (new) representation?
Do they fit my target market?
Is my bill rate in their range? If they are used to paying workers comp rates and you are billing $500 + an hour don’t waste your time.
If my main contact leaves, do I have other contacts that are strong within the organization?
You may end up with few customers, but they more than likely will be better ones. You will end up with fewer prospects, but they will be more qualified opportunities. Just like spring cleaning your house gives you more space, spring cleaning your clients or prospects will give you more time. More time to develop or manage your customer base, take in your kids ballgame, dinner with your spouse…
According to my watch the time is now…
Written by Andrew Wilcox, Andrew@Wilcox-legal.com, 850-893-8984
Monday, March 16, 2009
Tuesday, March 10, 2009
Relationship selling
As the Jimmy Buffett song goes, “Relationships…we all got them, we all want them, what do we do them…”
In my career, I have often been in rooms of people that have done very well selling by relationships. They have been in a market for a long time, met a lot of people, attended countless rubber chicken dinners, walked hundreds of miles on golf courses, and had enough coffee meetings to keep the Colombian coffee market afloat single-handedly.
They usually listen to people talk about “new” ways to prospect and secure business and smile.
Early in my career, I would camp out next to these folks and learned a lot. They came from the Dale Carnegie school of building business. Shake enough hands, meet enough people. The one question that I never got an answer to was, “So what about the opportunities that you are missing because you don’t have a relationship?” In this economy, the question has become a statement in many cases, “So we have a relationship, I expect a better deal. You are my friend, but I have to cut costs. I hate to do it but…”
Relationship selling by itself relies on a few assumptions:
1. You are the only person or firm that has a relationship with the client or prospective client. Do a Martindale search of how many attorneys are in your area of practice just in a certain geographical area. Divide that by how many companies/ potential clients there are. Look at how many people either have relationships with someone or are actively trying to have a relationship with a potential client and realize you ALWAYS have competition.
2. Relationships are rock solid and nothing can get in between them. When over 50% of marriages end in divorce and these are people that share families, homes, bank accounts, and proclaimed “til death do us part..”Something can always come between you. Gee Mr.(s) Prospect…you don’t talk to your attorney that often but get bills from them, and wow those are high bills. What if you can cut costs? Would a lower rate entice you…
3. Those relationships will always be in a position of power and be able to buy your services. What happens when that relationship leaves the company and now you have to start over with a new contact? What if that company is a big client and the new contact is used to dealing with another lawyer or firm?
4. That you are in fact comfortable selling to people that you have relationships with. Not everyone is comfortable have a business conversation with a friend or asking for referrals from a friend. Building referral networks is a process and a skill.
So what if someone is using another lawyer/ firm for their legal work? Does that mean that the relationship is stronger than the need to change or use other firms? What makes you any different from anyone else that speaks at a Chamber meeting, does a seminar, or exchanges cards at a civic function?
If you went to a doctor for a check up and they spent five minutes with you, told you you looked good and to pay on your way out of the office, how would you feel? That is what many working relationships have become.
My daughters pediatrician is thorough and you hope to secure his first time in the morning. He asks questions, listens, spends time. Answers every question that you have. Researches if he doesn’t know an answer off the top of his head. Will sit quietly and think about my daughters individually and practically has to be kicked out because you feel bad for the long line of folks waiting to see him. He recently diagnosed a since resolved issue that baffled everyone. He managed our risk as parents and still had enough personality to joke with us when the mood was light.
I changed health insurance plans. Price was an issue. I looked at a few plans that his office did not work with but did cover my wife and my doctors. We paid more to keep him as a doctor and changed doctors ourselves. THAT is a relationship.
Are prospective clients looking for a buddy, or are they looking for someone to manage their risk? Are they looking for the cheapest attorney or the one that takes it personal and is the best?
When prospecting, assume that they have heard it all. Assume that they have relationships with other firms. Assume that their “active” needs are met although probe to confirm.
Where can you provide value to them and to their organization? Asking business questions that help identify “latent” needs. Where are they exposed or where is their upcoming risk? You will only find out by asking. When you are done asking, find others in the organization that you can ask questions of.
Separate yourself by the questions that you ask and the value that they see, not just by being an entity that assumes the answers and generates bills.
By understanding the entire situation of a company from legal, products, employment, real estate, finance, operations, etc. you insulate yourself from losing clients by having the ear of many within an organization. Become an investment rather than a cost by proactively bringing solutions to issues that they may face months or even years in advance.
Approach your client development from the clients side and there in lie the relationship.
Written by Andrew Wilcox, Andrew@Wilcox-legal.com, 850-893-8984
In my career, I have often been in rooms of people that have done very well selling by relationships. They have been in a market for a long time, met a lot of people, attended countless rubber chicken dinners, walked hundreds of miles on golf courses, and had enough coffee meetings to keep the Colombian coffee market afloat single-handedly.
They usually listen to people talk about “new” ways to prospect and secure business and smile.
Early in my career, I would camp out next to these folks and learned a lot. They came from the Dale Carnegie school of building business. Shake enough hands, meet enough people. The one question that I never got an answer to was, “So what about the opportunities that you are missing because you don’t have a relationship?” In this economy, the question has become a statement in many cases, “So we have a relationship, I expect a better deal. You are my friend, but I have to cut costs. I hate to do it but…”
Relationship selling by itself relies on a few assumptions:
1. You are the only person or firm that has a relationship with the client or prospective client. Do a Martindale search of how many attorneys are in your area of practice just in a certain geographical area. Divide that by how many companies/ potential clients there are. Look at how many people either have relationships with someone or are actively trying to have a relationship with a potential client and realize you ALWAYS have competition.
2. Relationships are rock solid and nothing can get in between them. When over 50% of marriages end in divorce and these are people that share families, homes, bank accounts, and proclaimed “til death do us part..”Something can always come between you. Gee Mr.(s) Prospect…you don’t talk to your attorney that often but get bills from them, and wow those are high bills. What if you can cut costs? Would a lower rate entice you…
3. Those relationships will always be in a position of power and be able to buy your services. What happens when that relationship leaves the company and now you have to start over with a new contact? What if that company is a big client and the new contact is used to dealing with another lawyer or firm?
4. That you are in fact comfortable selling to people that you have relationships with. Not everyone is comfortable have a business conversation with a friend or asking for referrals from a friend. Building referral networks is a process and a skill.
So what if someone is using another lawyer/ firm for their legal work? Does that mean that the relationship is stronger than the need to change or use other firms? What makes you any different from anyone else that speaks at a Chamber meeting, does a seminar, or exchanges cards at a civic function?
If you went to a doctor for a check up and they spent five minutes with you, told you you looked good and to pay on your way out of the office, how would you feel? That is what many working relationships have become.
My daughters pediatrician is thorough and you hope to secure his first time in the morning. He asks questions, listens, spends time. Answers every question that you have. Researches if he doesn’t know an answer off the top of his head. Will sit quietly and think about my daughters individually and practically has to be kicked out because you feel bad for the long line of folks waiting to see him. He recently diagnosed a since resolved issue that baffled everyone. He managed our risk as parents and still had enough personality to joke with us when the mood was light.
I changed health insurance plans. Price was an issue. I looked at a few plans that his office did not work with but did cover my wife and my doctors. We paid more to keep him as a doctor and changed doctors ourselves. THAT is a relationship.
Are prospective clients looking for a buddy, or are they looking for someone to manage their risk? Are they looking for the cheapest attorney or the one that takes it personal and is the best?
When prospecting, assume that they have heard it all. Assume that they have relationships with other firms. Assume that their “active” needs are met although probe to confirm.
Where can you provide value to them and to their organization? Asking business questions that help identify “latent” needs. Where are they exposed or where is their upcoming risk? You will only find out by asking. When you are done asking, find others in the organization that you can ask questions of.
Separate yourself by the questions that you ask and the value that they see, not just by being an entity that assumes the answers and generates bills.
By understanding the entire situation of a company from legal, products, employment, real estate, finance, operations, etc. you insulate yourself from losing clients by having the ear of many within an organization. Become an investment rather than a cost by proactively bringing solutions to issues that they may face months or even years in advance.
Approach your client development from the clients side and there in lie the relationship.
Written by Andrew Wilcox, Andrew@Wilcox-legal.com, 850-893-8984
Monday, March 2, 2009
All hands on deck client development
One of the things that I amazed to hear from senior partners at large law firms is that client development when it is netted out falls to a certain percentage of the attorneys within a firm. The shortsighted ones go as far to believe that if their associates begin to develop business that they will want to leave and take the business with them.
Is it any wonder why the loss of a few key clients causes the daily announcement of layoffs.
Large law firms are in many cases living a self fullfilling prophesy. The bill rates and overhead price out good potential clients. The arms race for associates that delivered jaw dropping starting salaries over the past few years. The acquisition binge of some firms that has caused alot of miscommunication within firms, among other things.
Some partners and most associates lives have revolved around billing hours originated by a few.
Meanwhile, alot of firms that have run themselves as businesses are still doing well in most areas. I have seen a trend over the past couple of years of attorneys that I have placed from larger firms to smaller firms. The money in many cases is comparable, sometimes have better benefits plans, but the number one reason that the attorneys have made the move is that they want to do more than sit behind a desk and bill and research. They want to be part of growing the firm. They want to have a sense of culture and community within a firm.
Firms that are not utilizing every person from the receptionist, to the legal secretary, summer associate, clerks, associates to partner in the client development part of their business do so at their own peril.
My background is in sales. After college I joined a financial services company and went through extensive training. My brother was the million-dollar roundtable financial planner that they decided to put me next to. I brought alot of misperceptions into that role. None more false and abruptly corrected as, "I am fresh out of college, why would someone want to invest or buy from me when they can have someone that has been doing this for years?"
I sat across from the managing partner at the firm and he told me if I believed that was my problem, I would own that.
I speak with associates and counsel all of the time that state they can not sell until they become a partner because no one will buy from them. I find that especially interesting when I speak with a young associate that has a few hundred thousand dollar book of business and growing. If you believe that you can't, you wont. If you believe people will leave your firm if they are doing well then they will. I can’t begin to say how many attorneys that I talk with that are perfectly happy where they are and that it would take “more money than they are worth” to get them to even think about leaving.
Client development is a process. Partners taking associates to lunch with clients is a good gesture but how do they know how to get clients of their own that they can take to lunch someday?
Great law school grades, research dynamos, can write so perfect that it can almost be considered 15th century literature, but they have never had a business conversation with anyone to learn about their business. Not legal issues, about their business.
You have administrative staff that has relationships with people across a wide spectrum of interests but they are never engaged in business conversations with a spouse or friend that happens to be a VP at a regional company, or Operations Director at an international company.
Partners who have worked their way to that role and are great attorneys, but do the legal work generated by someone else.
Are your employees a cost or are they an investment?
When investing in the growth of your firm, how much of a return would you see in that investment if everyone added incrementally to the bottom line?
How to start:
Identify who you are and who you are not: Most attorneys that I speak with generate 80-90% of their business through referrals. Identifying what clients are a better fit for another firm and referring them to that firm is a HUGE head start on receiving business in return. It also protects your brand on the work that you do. You have a better chance of doing work well that you do all of the time than simply “taking whatever comes through the door”.
Facilitate asking questions. You can have anyone in your firm ask an open ended question of a contact and one that usually opens the flood gates. What does your business do? How many people does your company employ? What are your company’s goals for this year? Over the long term? Has your company acquired any companies over the last year? Who uses your products/ services? Are you a publicly traded company? Who handles your legal issues internally?
Messaging. It is crucial for an organization to have the same message. Having someone stating that the firm can or cant do something or represent something that is a stretch, even with the best of intentions, can damage everything and drive wedges in relationships internally and externally.
Communication process. How does a contact become a lead and a lead become a client? Who at different levels of power within a firm needs to be involved for levels of commitment. For deals over X size that will involve X resources who needs to sign off.
Habits of rainmakers. If 20% of the firm is generating 80-100% of the business, what are they doing right? Facilitate lunch and learns. Accountability partners. Create an environment where everyone is encouraged to prospect without fear of a client being stolen by someone else in the firm. Nurture trust and a team approach to client development. Remember the internal referrals.
When your investment begins to pay off you still may lose some to another firm. You just might have more work than you know what to do with working with a close knit group of people that has each others best interests in mind.
Written by Andrew Wilcox, Andrew@Wilcox-legal.com, 850-893-8984
Is it any wonder why the loss of a few key clients causes the daily announcement of layoffs.
Large law firms are in many cases living a self fullfilling prophesy. The bill rates and overhead price out good potential clients. The arms race for associates that delivered jaw dropping starting salaries over the past few years. The acquisition binge of some firms that has caused alot of miscommunication within firms, among other things.
Some partners and most associates lives have revolved around billing hours originated by a few.
Meanwhile, alot of firms that have run themselves as businesses are still doing well in most areas. I have seen a trend over the past couple of years of attorneys that I have placed from larger firms to smaller firms. The money in many cases is comparable, sometimes have better benefits plans, but the number one reason that the attorneys have made the move is that they want to do more than sit behind a desk and bill and research. They want to be part of growing the firm. They want to have a sense of culture and community within a firm.
Firms that are not utilizing every person from the receptionist, to the legal secretary, summer associate, clerks, associates to partner in the client development part of their business do so at their own peril.
My background is in sales. After college I joined a financial services company and went through extensive training. My brother was the million-dollar roundtable financial planner that they decided to put me next to. I brought alot of misperceptions into that role. None more false and abruptly corrected as, "I am fresh out of college, why would someone want to invest or buy from me when they can have someone that has been doing this for years?"
I sat across from the managing partner at the firm and he told me if I believed that was my problem, I would own that.
I speak with associates and counsel all of the time that state they can not sell until they become a partner because no one will buy from them. I find that especially interesting when I speak with a young associate that has a few hundred thousand dollar book of business and growing. If you believe that you can't, you wont. If you believe people will leave your firm if they are doing well then they will. I can’t begin to say how many attorneys that I talk with that are perfectly happy where they are and that it would take “more money than they are worth” to get them to even think about leaving.
Client development is a process. Partners taking associates to lunch with clients is a good gesture but how do they know how to get clients of their own that they can take to lunch someday?
Great law school grades, research dynamos, can write so perfect that it can almost be considered 15th century literature, but they have never had a business conversation with anyone to learn about their business. Not legal issues, about their business.
You have administrative staff that has relationships with people across a wide spectrum of interests but they are never engaged in business conversations with a spouse or friend that happens to be a VP at a regional company, or Operations Director at an international company.
Partners who have worked their way to that role and are great attorneys, but do the legal work generated by someone else.
Are your employees a cost or are they an investment?
When investing in the growth of your firm, how much of a return would you see in that investment if everyone added incrementally to the bottom line?
How to start:
Identify who you are and who you are not: Most attorneys that I speak with generate 80-90% of their business through referrals. Identifying what clients are a better fit for another firm and referring them to that firm is a HUGE head start on receiving business in return. It also protects your brand on the work that you do. You have a better chance of doing work well that you do all of the time than simply “taking whatever comes through the door”.
Facilitate asking questions. You can have anyone in your firm ask an open ended question of a contact and one that usually opens the flood gates. What does your business do? How many people does your company employ? What are your company’s goals for this year? Over the long term? Has your company acquired any companies over the last year? Who uses your products/ services? Are you a publicly traded company? Who handles your legal issues internally?
Messaging. It is crucial for an organization to have the same message. Having someone stating that the firm can or cant do something or represent something that is a stretch, even with the best of intentions, can damage everything and drive wedges in relationships internally and externally.
Communication process. How does a contact become a lead and a lead become a client? Who at different levels of power within a firm needs to be involved for levels of commitment. For deals over X size that will involve X resources who needs to sign off.
Habits of rainmakers. If 20% of the firm is generating 80-100% of the business, what are they doing right? Facilitate lunch and learns. Accountability partners. Create an environment where everyone is encouraged to prospect without fear of a client being stolen by someone else in the firm. Nurture trust and a team approach to client development. Remember the internal referrals.
When your investment begins to pay off you still may lose some to another firm. You just might have more work than you know what to do with working with a close knit group of people that has each others best interests in mind.
Written by Andrew Wilcox, Andrew@Wilcox-legal.com, 850-893-8984
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