Law Firm Cross Selling Basics

by Timothy B. Corcoran on May 24, 2010

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In today’s vignette, let’s react once again to search engine key words that have led recent visitors to my blog.  Law firm cross selling is a search term that quite frequently appears in my search logs.

Most lawyers perceive cross selling as the other guy’s job.  “I told them what I do, now it’s their responsibility to introduce me to their clients.”  This is a waste of time, whether due to apathy, or busy schedules, or — in large firms in particular — the inability to really know what everyone else does.

So many firms, or the firm’s marketing team, create elaborate Intranet sites and internal newsletters where success stories are published and deal lists and practice descriptions are housed, so that each lawyer may spend time perusing his or her colleagues’ area of specialty.  But no one really does this.

Let’s assume for a moment that there is no financial disincentive, such as a compensation system that rewards isolationist behavior or at least fails to reward collaboration.  These systems exist, but like wallpaper they’re a big pain in the neck to remove and replace, so they remain.

Why, then, do so many lawyers fail to go out of their way to cross sell?

First, many lawyers are bad at math.  If every lawyer is more fully utilized, and we’re doing more work with existing clients (or, in other words, our cost to acquire new work is lower than it would be to seek new clients) then the firm overall will be more profitable and all shareholders will benefit.  Instead, many tend to focus on their personal performance and origination.

Secondly, many lawyers fail to recognize that cross selling is MY job.  If I want my colleagues to recommend me to their clients, then they need to know what specific problems I solve, and what specific triggers or flags should lead to an introduction.  Vaguely advertising that I do real estate work is less specific than educating my colleagues that, for example, any client with distressed assets in need of protection or disposal, or clients conducting an acquisition that includes real assets with unknown liabilities, should speak to me.  It’s incumbent on each of us to educate our colleagues about the top two or three problems we solve, and how to identify one of these problems in the making.

Yes, yes, I know that if we limit it to two or three problems, then we’ll be completely overlooked by our colleagues when a separate but equally lucrative issue comes along, and since we didn’t identify it they’ll recommend that their client seek another law firm with more relevant experience to handle it.  Or so we think.  Have you ever gone to a steakhouse with a vegetarian? She doesn’t starve! Or to a seafood restaurant and ordered a steak?  Just because we promote one or two or three compelling ideas doesn’t mean we can’t or won’t provide services outside this range.  So narrow it down, make it easy, and trust your colleagues to know you also do other work in this field.

Finally, cross selling requires familiarity and trust.  We’ve heard the maxim that clients buy from people they like and trust.  This applies within a law firm too.  So make time to get to know your colleagues.  I’ve been in law firm practice group meetings where two partners had never met in person, yet they practiced in the same group for a couple years, and presumably attended the same annual practice group offsite meetings, but their schedules had never really coincided.  In today’s growing law firm, it’s hard to get to know everybody.  But try.  Work from another office periodically.  Pick two or three colleagues you don’t know, even if your clients have never had a need in this area, and take them to lunch this year.  When traveling to a client site, if there’s a satellite office nearby, drop in and walk the halls.  Your colleagues will refer business to you when they trust you, and they won’t generally trust you until they know you.

This is also why every law firm retreat I’m asked to organize includes some pub time, or golf time, or spa time.  This is sometimes eliminated due to cost or optics, but in fact it’s critical to spend time off the clock with your colleagues.  Work the room, get to know people.  You’ll be amazed how frequently your name will come up in their client meetings when they know you, know what problems you solve, and how to spot the issues when they arise.

Good luck!

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{ 2 comments… read them below or add one }

Timothy B. Corcoran May 27, 2010 at 1:23 pm

Great question. First, I think we’ve all met a lawyer or two who hoards their clients for their own selfish reasons. Some wish to remain portable, so the clients are theirs and not the firm’s should a greener pasture appear. Some just enjoy the silo environment of a modern law firm, working independently from their colleagues but happy to share overhead costs. In both of these cases and others like them, there’s a fundamental impediment to collaboration embedded within the fabric of the firm. Are these lawyers truly partners in anything but name? Or is the partnership merely a convenient business form that suits their purpose, but doesn’t really drive collaborative behavior?

I don’t have any particular inside perspective on the recent law firm dissolutions, but I can tell you as an educated observer that when a firm is held together by little more than financial ties, the firm falls apart when these financial ties weaken: “What, our lender is asking us to personally sign for our collective liabilities? I don’t know enough of you, like enough of you or trust any of you enough to put my net worth at stake, so no, I’d rather dissolve than truly get into the boat with you during this time of crisis.”

On the other hand, the firms comprised of people who truly enjoy working with each don’t have to work so hard to find opportunities to collaborate.

To be clear, there’s a lot of middle ground. Even with desire, one needs structure to make it happen. As I mentioned in the post, it’s critical to put the lawyers in a room with each other regularly… sometimes with a business purpose (practice group meeting, annual partner retreat, client team, etc.), sometimes with no purpose (lunch for all partners whose name start with M-R, golf outing, etc.). It may seem like unnecessary overhead during tough times to fund playtime, but it doesn’t have to be expensive to be effective.

The finance department can also help. Many CFOs will report on the amount of inbound and outbound (or import and export) work each practice enjoys. But few will break this down into more detail to reflect (a) how does the profit margin contribution from internal referral compare to overall firm margin, or the margin from new clients, or (b) what’s the impact if we each improved our internal referrals 5% or 10%… and how does this compare with the costs associated with acquiring net new clients? Lawyers tend to limit their math to the usual metrics of WIP, realization, utilization, PPP and so on. A good CFO can open eyes about the impact of alternative approaches.

Finally, trust is elusive. At times it comes, probably not surprisingly, when partners know each other better, even if this familiarity doesn’t contain a scintilla of new information about their colleagues’ practices or depth of experience. Trust can come without familiarity, but it requires a firmwide effort to, among other things, deliver and sustain a consistent level of quality, hire to certain standards and promote to certain universally-held standards.

Have you ever tried to find the name of a McKinsey partner (for those who don’t know, McKinsey is a global and renowned management consultancy)? They don’t advertise their consulting partner names. They advertise their credibility and their approach. When you hire McKinsey, you get a consistent approach and quality no matter who delivers it. The McKinsey Way has taken years to develop but it’s now part of the firm’s DNA. And McKinsey is larger than most law firms, so while partners may not be familiar with each other, they trust that their their colleagues maintain these standards. A rogue partner who hoards clients, who can’t or won’t cross-sell won’t be tolerated.

There’s nothing wrong with a law firm that operates as a loose collection of silos, if that’s the intent, despite the inefficiencies. However, it’s those firms that operate as a loose collection of silos even as they present themselves internally and externally as a full-service, well-oiled, integrated operation that get into trouble.

Laura Gutierrez May 27, 2010 at 12:12 pm

What about attorneys who are unwilling to “share” internally? I’ve heard marketers say that some attorneys would rather refer to outside attorneys than refer in-house, for one reason or another. How do you (1) get them to meet attorneys in-house that they may otherwise not meet; (2) get them to understand that giving someone else work inside your firm helps the entire firm (depending on the billing structure); and (3) get them to trust their peers with their client’s work?

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