The Future of Business Development in Law Firms
Although this post is aimed at law firms I think it also applies to most professional services firms: if you have to create a revenue stream, have a job to do as well and see change on the horizon read on.
The law has an unusual number of change drivers swirling around at the moment: the legal services act, the economy, alternative suppliers, technology advances, outsourcing and alternative billing to name a few.
With this amount of uncertainty people tend to either drop into the Pit of Paralysis and do nothing or, worse still, move into the Den of Denial and pretend everything is just peachy. Neither of these options is very helpful so what about a third alternative: take action!
You can do a range of things but the most powerful is to get complete control over your revenue pipeline. That means building a production line (“ah, that’s why he’s put that picture in”) that is systematic, organised and above all controlled which generates new clients and another which generates revenue.
When I work with lawyers I find that they are more than happy to share their pipeline of business with you but when you examine the detail you find that between 80% and 90% of the business opportunities are from existing clients. Great but where is the growth coming from and what happens if you lose a big client?
When you explore the new client pipeline further you see that the vast majority has originated through referrals from contacts, existing clients or intermediaries. I love this because it is efficient and proves you must be doing a good job but the problem is that you are relying on something you have very little control over. Referrals should be the icing on the cake for new client generation.
So what to do? Well here are some things you can do for a start: -
- Analyse your revenue streams: how much from known clients and how much from new clients?
- Analyse you new client pipeline: where have they come from?
- Rebalance your revenue stream: aim for 70% from existing clients and 30% from new clients.
- Create reliable new client sources: I suggest social media, showcasing and direct targeting as three effective alternatives.
This is just a three minute blog post designed to make you think about the situation and generate some small remedial actions. We are currently compiling a more comprehensive white paper on the subject. If you want a copy when it is published please contact us and we will email one over.
The world is moving on and it is far too dangerous to look back and see your future through the eyes of the past. It has got to be better, and more scary I’ll admit, to look forward and set about building a more secure world for yourself. Fear should always be the other guys problem.
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