Editor's note: This is the sixth in a weekly series from The Legal Intelligencer examining how law firms adapted during the last two years and where they are headed as the economy recovers.
If there has been only one result from the shift in how law firms have conducted marketing and business development initiatives in the past two years, it's that general counsel's lunch calendars have become increasingly crowded.
The shift that began before the recession and was only exacerbated during it was the move from a branding and marketing focus within law firms to one much more intent on business development. That has lawyers looking to get closer to their clients both in an effort to keep the work they already have and find new sources of business from familiar places.
Jim Hassett, founder of LegalBizDev, has been doing sales training for about 20 years and focused the last five years of that on attorneys. The recession has resulted in three noticeable changes in marketing and business development as far as he is concerned.
First, value has become part of the selling process in a way it really hadn't been before. That is in turn driving the other two shifts, which are a focus on more defensive marketing to current clients and a continued move away from marketing and toward business development, Hassett said.
Unlike most other businesses, law firms had traditionally devoted many more resources to marketing than business development or selling. That was mainly because lawyers didn't want to sell and decided to have others do it for them by suggesting a marketing department create a brochure or fancier website, he said. But marketing and selling require two different mindsets, often not found in the same person. Marketers are planners and thinkers and sales people are doers, Hassett said.
"I think that one of the things that's changing is lawyers are coming around and understanding that [selling is] really something they have to do themselves," he said. "You can't hire somebody to do your pushups as people say."
With billable hours not being as robust, giving lawyers more time on their hands, attorneys should be filling that gap with business development, Hassett said. But that doesn't mean all attorneys need to be sellers.
Hassett is admittedly biased toward sales, but said he doesn't think law firms -- particularly large ones -- need to adopt a model based on the need of every partner to be a salesperson or they are out.
"If I were a chairman of a large law firm, I would want to create a structure in which some people could be highly rewarded without bringing in business," Hassett said, "Not everyone is good at it."
Hassett said he worked with a rainmaker at a 500-lawyer firm recently who was very good at bringing in business and brought in even more after training. When Hassett asked the attorney why he couldn't just devote five or 10 more hours a week to business development, the attorney said his firm would frown upon him not billing a certain amount of hours.
"He was doing less selling because they were forcing him to be a service partner too," Hassett said.
If firms embrace service partners as a way to make billable hour targets, the attorneys who excel at selling can bring in that much more business, he said.
More important than the shift to business development or even defensive marketing is the focus on value, Hassett said.
Most other industries have already gone through a shift from social relationship selling, in which you befriend and entertain the client, to value-relationship selling, in which the client can explain to its board the value this vendor provides, Hassett said. But that is just now starting in the legal industry.
When asked what value really means, Hassett said it means a buyer has to feel that what he or she is being charged is worth it.
Typically that is done through reducing prices and Hassett said there is no simple answer to how to add value beyond that except for genuinely understanding what a client needs and how to provide it.
Rate reduction is not a sustainable business model if firms are looking to continue to make what they historically had. But if lawyers are willing to "make a sensible living," then price reduction might be the best way to provide value.
"The definition of how much you can make as a lawyer is going to change for a lot of people," Hassett said. "So far it's just [been] felt by young people the old people fired and now there's not enough of them left to keep firing to keep protecting their old way of life."
In recognition of the emphasis now placed on value, Drinker Biddle & Reath created a chief value officer this year.
Drinker Biddle's chief marketing officer, John Byrne, said many of the changes being made in the business development area are really the process of law firms "slowly but surely coming into how our clients operate" through more sophisticated procurement proceeds and a focus on value-added services.
Drinker Biddle has also revamped how it handles requests for proposals, something firms are increasingly seeing more of, particularly from large clients with procurement functions already in place for other vendors. There is now a dedicated team to respond to RFPs and the firm looks to differentiate itself through the process by providing very customized responses, Byrne said.
The firm is also in the midst of hundreds of client interviews. The information gathered through that process will create client service standards.
"The days of just throwing a brochure at a potential client and saying hire us are long gone," Byrne said.
Duane Morris CMO Mark Messing said it's no secret there has been a "tidal change that has swept toward the business development side of the marketing/business development equation."
Resources aren't necessarily being moved from one side to another, he said, but to the extent new initiatives are being developed, they are geared toward things that will put the attorneys in close proximity to clients.
"That's not to say that we don't still prize our thought leadership [such as client alerts] and outbound communications and the types of things we say about ourselves in public, but those components have been stable and we've ramped up the business development side," Messing said.
The firm has tried to create more out of pre-existing groups of attorneys who already met in a regular way to discuss business opportunities. Each office, for example, would typically have such meetings, but no action plans were created out of them, he said.
Now those groups are getting market research to support business development initiatives. The meetings result in prospect lists around which action plans can be tailored, he said.
According to Messing, attorneys should be focusing on "complex solution selling," not continually talking about their own background and experience. A lawyer's credentials are simply a cost of entry, and once in the door, the attorney should learn about the client's problems and offer possible solutions, Messing said.
The RFP process is definitely something that has entered the market in a more significant way, Messing said, but he isn't sure that it's adding much to a client's decision-making process. They are being used more to lower prices at existing law firms rather than as a way to find new firm relationships, he said.
"The technique can force current firm rates lower, but doesn't appear to be moving market share that much," Messing said.
Mary Beth Pratt of MBPratt Consulting in Berwyn, Pa., said attorneys have an advantage today more so than 10 years ago when it comes to maintaining and growing market share. For years firms just sent out brochures and newsletters and held seminars. While there's no replacement for face time, Pratt said attorneys can now easily follow that up by creating LinkedIn groups related to a certain subject or making sure their clients know they author a blog on a topic important to the client.
"In one way, the opportunity to deepen relationships is better than ever just because everybody walks around with their phones in their hand," she said.
The other key thing for firms to think about on an institutional level is training young attorneys on business development techniques, Pratt said. Many firms have started this process with varying models. The interesting thing would be whether firms actually compensate based on a lawyer's ability to demonstrate those techniques, she said.
Another big part of the equation, Pratt said, is project management skills. Hassett recently created a project management training program geared specifically for lawyers because once they drum up the business, they have to know how to deliver it in a new way in order to deliver on alternative fee arrangements and an overall expectation of efficiency.
It seems the days of just learning case law and contracts are long gone as well.
The next and final installment of New Firm Order II will examine what the future holds for the legal industry.
Other Articles in The Legal Intelligencer Series (paid registration required):
Part 5: Are Law Firms Morphing Into Managers of Legal Providers?
Between new players looking to provide legal services and pushback from clients over paying for routine work, law firms potentially have less to do.
Part 4: Non-Traditional Competition Is Circling Law Firms
The legal industry is falling apart. Not in the sense pundits meant when they gave that diagnosis in 2008 as firms were hit with the harsh reality of the recession.
Part 3: Smaller Firms Still Have Big Companies' Attention
Last year, as the economy faltered, many midsize firms began to hear opportunity knocking and came to find more and more large corporate clients gathered on their doorsteps.
Part 2: GCs Waiting for Law Firms to Dance: It's Outside Counsel's Job to Change Their Business Model, Clients Say
Cephalon General Counsel Gerald Pappert doesn't know what it is like to run a legal department during law firm glory days, but after joining the pharmaceutical company in May 2008, he quickly got to the task of curtailing firms' old ways.
Sidebar: Law Departments Adapting, Too
The most noticeable change to law departments that Susan Hackett, general counsel of the Association of Corporate Counsel, has seen during the recession is the way they look at staffing -- both internally and with their outside counsel.
Part 1: Do Post-Recession Law Firms Look Any Different?
Last year, Eckert Seamans Cherin & Mellott CEO Timothy P. Ryan seemed well ahead of the curve when clients started pushing back on paying for the inexperience of first- and second-year associates on their matters, and law firms, in turn, started hiring fewer, if any, young attorneys.