Attorneys have told us about some 30 business development challenges they face, including: pressure to reduce fees, poor ROI on firm-sponsored events, disappointing net realization rates.
They also give away intellectual property during business development (in an attempt to impress prospects), use networking time inefficiently, and lose clients because they don’t cross sell within their firms.
What’s the common thread here?
Simply put: Like many businesses we work with, they don’t know how to communicate the true value of their services or products. Further, they don’t know how to get fully paid for that value. For example, even some of most successful law firms recover perhaps 92 % + of what they invoice. The net realization rate for struggling firms can be in the low 80s.
The good news is that the same consultative selling techniques that work for top performers in any industry work for attorneys, too.
Top business developers and salespeople, in our view, are the 20 percent who consistently bring in 80 percent of all new business. They outsell their less successful colleagues by a ratio of 15 to one. Make that calculation for your firm or business and think about how absolutely essential top performers are. What would the impact be if even one walked away?
How do top performers outsell their less successful colleagues, regardless of the profession or business? They do two things to stay on top: They behave in specific ways that their colleagues do not, and they use a proven process customized for their practice areas and markets. It’s not magic, and it can be learned.
Why are law firm net realization rates surprisingly low? Here’s what we see happening.
Attorneys: 1) Reduce their rates or hours even before a client asks, either because they under-value their own work or they don’t believe the client will appreciate its value. 2) Ask their firms to “write down” work they’ve already performed or work in process. 3) Discount their fees to get a new client or to keep a current client.
Clients: 1) Want to negotiate lower fees right off the bat. 2) Ask for a discount afterthe work is completed. 3) Challenge the amount or nature of the work performed.
We’ve helped attorneys and other business developers at all levels realize much more revenue much more consistently. We can improve the skills of your firm’s attorneys to acquire new clients, to increase business from current clients, and to increase the dollars actually flowing into your practice.
Is your firm’s net realization rate as high as it should be? Are your attorneys receiving the fees they’ve earned or are they leaving money on the table?