This is the second installment about The Lawyer Magazine’s Fourth Annual Business Development Conference on February 10-11 in London, which I chaired. Previous presentations focused on strategy during a downturn, especially the opportunity presented by the availability of lawyer time.  In my presentation, which focused on return on investment for specific marketing strategies, I outlined the differences between marketing sales and service, the three components of business development (see chart). I then noted the key drivers of strategic BD were demonstrated in a recent Altman Weil survey of corporate counsel: 

• 80% are concerned with outside legal costs

• 75% of corporate counsel will implement budget cuts in 2009

• 35% of that category will cut budgets by more than 10%

At the same time, US-based law firms have already experienced their largest drop in per partner profits, up to 10% in many firms.  Some firms are experiencing bad partner behavior as a result, including work hoarding, disbanding teams and internal competition.  In many firms, this has resulted in lowered commitment to strategic BD and downsizing of BD staffs. To counteract the negative effects of this behavior, I recommended that firms focus the majority of their efforts on the top 10% of their clients; segment their markets by existing or new clients and existing or new work, with a strategy for each segment; determine ROI to the extent possible for each tactic used to focus spending; be more discriminating in choosing which RFPs to respond to; measure and communicate results; and differentiate themselves by acting upon client feedback.  At Altman Weil, we have found that the latter tactic can generate up to 10 times return on investment, a number that was agreed upon by many in the audience who had conducted client surveys.    In his presentation “Client Relationship Management—Adding Value and Making a Difference,” David Pester, Managing Partner of UK firm TLT Solicitors and 2007 “Managing Partner of the Year,” made the case that clients are more discerning about buying legal services and will no longer subsidize inefficient outside counsel.  As law firms are limited in the extent to which they can raise rates and margins erode, they will be forced to become more efficient. Using a mnemonic device, Pester said that clients are looking for: 

• Cost control

• Competence

• Commerciality (knowledge of the client’s business)

• Compatibility

• Capacity

• Credibility

Pester said that client dissatisfaction with outside counsel stemmed from problems with cost, responsiveness/service delivery, perception of value, “siloed” practice areas and lack of awareness of client needs and priorities, including additional services that the firm could provide.  Added value in client relationships consisted of knowing clients, being collaborative rather than undermining the client, making the client successful and having a succession plan for handling the client’s account when the senior lawyer steps down. For those who thought that branding discussions were dead or dying in the current climate of austerity and pragmatism, Pester presented a very useful model.  He said that 30% of a high performing brand was based upon a clear and compelling promise made up of one promise, one message and one design identity.  The remaining 70% was based upon law firm behavior and the client experience that matches the brand promise.  He concluded by stating that a successful brand will be driven by the six “Cs” bulleted above.  One of the final presentations, delivered by Lance Sapsford, Head of Business Development for

UK firm Addleshaw  Goddard, included a very useful chart that contrasted law firms from other professional services firms: 

Other Professional Sectors	Law Firms
Focus on business	Focus on the law
Board level credibility	Lack board level access
Visible value	Invisible value
BD in the front line	BD as support
Understand profitability	Focus on volume
Deliver to client objectives using specialized expertise	Deliver the law
Brand	Brochures
Client feedback	Don’t need feedback

While admitting that some law firms had caught up with accounting and other professional services firms—or at least were making efforts to do so—Sapsford said that most had a long way to go.  Fortunately, good models for great client service exist in other professions and law firms just need to acknowledge that the templates are applicable to themselves as well. 

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