Effective Client Targeting is Critical to Law Firm Growth
The lawyers and professional staff at law firms who are assigned direct responsibility for growing revenue are more effective when leadership provides a clear sales strategy, or at least the ground rules for generating one. Absent such guidance, the firm’s revenue success is dependent on the outcome of random, perhaps disconnected pursuits. Without a sales strategy, opportunities for synergy and efficiency across the firm are reduced. And with no strategic sales roadmap, every potential client of any stripe is fair game, leading to a very real chance that the firm ends up with clients that are not the best fit for what it really wants to become.
Sales strategy should be driven by the firm’s master strategy. Fortunately, most law firms already work hard on the latter. Frequently, they look to a five-year horizon and identify aspirations for client-service excellence, brand recognition, talent management, maintenance of culture, commitment to community, and other lofty endeavors. With just a little thought and effort beyond that, a firm’s overall strategy could provide sales guidance that would save money and dramatically improve revenue results.
Here’s why. In a very real sense, a law firm can be defined as its current client base. Firms organize themselves around and hire appropriate talent to serve these clients. In proposals and promotional materials, the firm cites (and hopefully acquires testimonials from) its existing clients. Competitive law firms and potential clients refer to the law firm with words such as, “You know – X Company’s firm.”
Extending this line of thought, a law firm’s strategy can be thought of as the plan that will help it transition from its current client base to the client base it desires to have five or 10 years into the future. A couple of examples are in order:
Several years ago, a Big 4 accounting firm implemented a somewhat-controversial strategy that called for, among other aspirations, the firm to focus almost exclusively on service to, and pursuit of, Global 1000 companies (at least those where conflicts did not interfere with this objective). This statement let everyone in the firm know where to invest their time, effort, and resources: either protecting and expanding relationships with existing Global 100 clients, or initiating and developing relationships with such companies that were not yet clients. (Non-Global 100 clients would, of course, be welcomed, however the firm would sanction only minimal investment in acquiring them).
More recently, as part of its overall strategy, an Am Law 100 firm identified its sweet spot as the middle market, specifically companies in a well-defined handful of industries, in specific geographies, and with annual revenues of $150 million to $2 billion. Again, the strategy provided clarity that allowed marketing and sales professionals, and revenue-generating partners, to focus with great precision. In this instance, the guidance led to the identification of 3,000 companies nationwide that fit the criteria; only about 10% of them were current clients.
Because these firms received clear strategic guidance from the top that identified the desired client base that would exist at the end of the five-year life of the strategy, it was possible to:
- Identify the individual buyers within the companies
- Cost-effectively provide research and business intelligence about each
- Focus advertising and promotional efforts
- Efficiently manage client relationship tools and efforts across new and potential clients
- Reduce expenses related to entertaining prospects — often an exorbitantly expensive line item
When the targeting goal is clearly defined, progress can be easily and meaningfully measured….and achieved. In short, aligning sales guidance with your firm’s overall strategy works!
Law firms, understandably, want to be widely known. To the firm owners, it just feels good. However, achieving this is very expensive compared to a more focused investment. Law firms don’t need to be world-famous. Achieving effective growth through the pursuit of a targeted client list is a more valuable end goal. Being well-known primarily to the companies that will define their futures is a much more effective and efficient way to grow.
pro tips for developing your firm’s sales strategy:
- Include those responsible for generating revenue in all strategic exercises
- Track and share progress toward acquisition goals between strategic exercises
- Take pride in being well-known to the 100, 500, or 3,000 companies who are well-aligned to help your firm grow
- Eliminate spending on mass-marketing. Instead, invest in CRM and sales-collaboration tools that allow your firm to intently focus on selected targets, and which help pursuit and service teams communicate, collaborate, and report. SalesForce.com, SugarCRM, and Intapp are well-established players. A new entrant into the field, NEXL, uses AI to eliminate manual data entry, thus offering a more automated and much more cost-effective option.
Fahrenheit’s Law Firm Growth Team collaborates with law firms to increase sales to new and existing clients. Our work helps your team develop effective sales strategy, improve processes, and sharpen skills to drive profitable revenue to your firm. Here is an overview of our team and how we help law firms grow.
Let’s talk about accelerating growth at your firm. Contact us today! Experts@FahrenheitAdvisors.com.
About the Author
Steve Bell helps professional services firms generate profitable new revenue by expanding existing client relationships and acquiring new clients. He supports firms as they develop practical client-development strategies. And, he helps firms improve marketing and sales functions such as positioning and branding, communications, new media, competitive research, CRM, direct sales, sales training and coaching, and more.