A Preview of The Future of Law Firm Marketing
Many business leaders (lawyers and others) work with me because they know I spend a significant amount of time testing and researching media formats to deliver messages to specific target audiences.
My job is to focus on attracting clients to your law firm in the most effective and efficient way both now and over the long run. In my role as a strategist, I gaze out into the future and work backwards to build systems and processes that help you attract clients.
At the beginning of next year I am going to produce a report that will outline my thoughts on successful client attraction and relationship development strategies for the next 3 to 5 years.
The report is be titled: The Valtimax ® FutureKast ™.
Today I am sharing some of the thoughts that will go into that report. This “stream-of-conscious” approach is a competitive advantage for you because you can (if you choose) take advantage of this information a full 3 months before it is released to the rest of the world.
This is just another one of my gifts to you for being a regular consumer of my information.
You can listen to this action-packed podcast on the player below. If you’d like, click on the link and download it. You can then compare it to the report when it is released in January.
Here are three other articles you should read if you want to stay on the cutting edge of relationship development and client attraction.
Are you a law firm leader? Here are ten qualities that separate great leaders from those who merely survive their time at the helm:
If you need some background on my philosophy on matching message, audience and delivery system (media), listen to this podcast:
Most attorneys are horrible at communication strategy. Here is a primer on message development and marketing communications:
Five Articles to Help You Make More Money as a Lawyer
Each week I put together a summary of the five most popular articles I shared with my readers (I send out links to over 50 law firm marketing and business strategy articles each week on social media.)
These articles are the ones that resonated with my audience (as measured by total social media interactions).
Read them and take some form of action.
Here are the five articles that received the most engagement from our readers this week:
This is both an article and an audio program and it provoked quite a reaction. Lawyers are generally not strategic thinkers but these six questions really bring out the need for focused thought about the future of your law firm.
Read the article and listen to the included audio and if you have trouble answering any of the questions, reach out to me right away. This article, more than any other in long time, generated the most direct contact (telephone calls and email) to my office.
Don’t be baffled by law firm business strategy. Do your homework and answer the six questions that predict your future.
I stirred up a little controversy this past week when I sent around an article about developing your marketing based upon client action and not based upon branding.
It’s not that branding is all bad. But for entrepreneurs, it makes more sense to focus on getting the audience to take direct action.
As food for thought, I offer you Five Things to do Before You Build a Brand
Too often I see lawyers sign up clients, do lots of work, and wait for their money. This is a horrible business practice. If you need a refresher on why you’re in business and how to improve your cash flow, watch this video.
Our offer for a f-r-e-e law firm marketing CD was so well received we ran out in minutes. This article continues to be one of the most popular and it gives you great insight into how successful lawyers think and act.
If you missed out on your copy a few weeks ago, there is still hope. Follow the link to the Million Dollar Lawyer Secrets page of my website and we can get you some of the fresh copies of the CD we just received. (If this CD was a book, it would be in it’s 50th printing!).
Get the CD today. I even cover the cost of the shipping.
This article stimulated some thought and heated conversation on social media. The reason: Most lawyers don’t think about the kind of law firm they want - let alone how to get it. Read this article and then decide what kind of law firm you want to build.
These five articles contain excellent insight but the key is for you to take action based upon the new information you discover.
Take a few minutes right now and pick one of the strategies listed above and take action.
Six Strategy Questions That Predict Your Future
There are six questions that will predict the future of your law firm. These questions portend your future income and your ability as a business leader.
If you cannot answer any of these questions or if the answer to just one of these questions makes you uncomfortable, you need to focus on your business strategy.
Listen to the audio program I recorded that discusses the importance of these questions and the strategy you develop to help shape your future.
Question 1: How does this end?
When you build a business you strive to develop something that increases in value as time passes.
Most businesses build up equity and the owner can sell them when it’s over. Professional practices can also be sold if they are built properly.
The challenge comes in setting up your exit strategy as early as possible. Why? Because you must create the market for selling your law firm.
Question 2: Where is your leverage?
There are three primary points of leverage for a law firm. They are: People, Processes and Practice (training and development of the people with whom you work).
What is your strategy to develop leverage?
Question 3: What is the lifetime value of your clients?
The most difficult way to grow is to find new clients over and over. Yet that’s what most lawyers focus on.
How deep are your client relationships? Is your law firm positioned to take advantage of the trust clients have placed in you?
Question 4: What is the predictability of your income?
How much will you make tomorrow? Next week? Next month? Next year?
If you know where your clients are and how to develop deep relationships with them, along with their lifetime value, you can easily predict your income.
Question 5: How difficult is it for a competitor to duplicate your business model?
There should be enough barriers to entry to discourage competitors from entering your practice area. Look for things that are difficult, develop a practice based upon them, and find ways to systematize your practice.
Question 6: Is it possible to plug someone into your systems and have them replicate your success within one year?
If you cannot plug someone new into your business model, that is a sign you have nothing of value to sell.
You may think these questions are not applicable to you. You may think you cannot address these issues because of the practice area within which you work. You may think it is too late for you to shift your strategic focus.
If you think any of these things, you’re wrong.
The time is now to review your business strategy through the lens of these questions.
If you struggle with the answers. reach out to me. I can help you think through these things. For an investment that can be easily recouped by attracting just one new client, I can work with you to develop a strategy that will allow you to create a bright, prosperous future.
Visit Dave Lorenzo Private Client Experience for more details.
Five Business Functions of a Law Firm
There are five business functions in every law firm. As the leader of the firm you have a responsibility to focus on all of them.
Unfortunately, most attorneys don’t. This limits their income, leads to overwork, and forces them to compromise their lives, their health, and their earning potential.
Take a look at each of the five areas of focus for a law firm leader. Give yourself a grade on each of them.
The Practice of Law
This is everything you learned in law school plus everything you trained for as well as all the research you do. In a typical law firm, this makes up ninety percent of the activity of the law firm owner.
Given the fact that law firms in the United States must be owned by attorneys, it is unsurprising that law firm leaders gravitate toward this part of their practice. This is where your training lies. This is where your experience lies. This is where your academic career has taken you.
Unfortunately, focusing on this area is a recipe for disaster. It distracts you from running your business.
What else is there to do?
There are four other areas where the return on investment of your time, money, and attention will lead to greater results.
Few people in business give much thought to strategy so it is unsurprising that few law firm leaders give thought to the topic. What do we mean when we discuss business strategy for law firms? Here are a few strategic items:
- Selecting a Niche: Many lawyers have broad practices that encompass divergent practice areas. While this can work, it is difficult for anyone in the firm to become a thought leader. That’s where business strategy comes into play. Selecting an area of focus allows the lawyers in the firm to differentiate their offerings and position themselves as experts.
- Formulating Fee Structure: Everyone knows fees play a huge role in law firm profitability but they also play a role in the marketing of the firm. Fees can be a strategic advantage and they can help with messaging.
- Creating a competitive Advantage: What makes your law firm different from everyone else who does what you do? You must provide your clients and prospective clients with a clear answer to this question. Coming up with that answer is business strategy.
How much thought have you given to these three areas?
They are a small sample of the strategic decisions you must make on behalf of your law firm.
If you think about marketing at all, you probably think about attending a few networking events and maybe speaking at your local chamber of commerce. These tactics are effective if they are part of an overall plan to attract new clients but if you view them as isolated and discrete activities, you will be wasting your time.
Here are three (of the many) things to think about when it comes to the client acquisition activities in your law firm.
- Attracting New Prospects: How do prospective clients think? How do they make decisions? What is most important to them when selecting a lawyer? Who, in most cases, makes the decision to hire a lawyer in your practice area? How can you get in front of that person as often as possible?
- Convince Prospects to Invest Trust: Once you get in front of the right person, how can you convince him/her to invest his/her trust in you?
- Diversity in Acquisition Tactics: If you want to be certain you attract clients in any economy and at all times, you must have dozens (if not hundreds) of ways to attract and engage prospective clients. This requires constant generation of new ideas and constant testing.
Clients are people. They require care and attention. Providing them with care and attention will lead to a deeper relationship that will help you make more money with less effort. That requires your focus as a leader on several things, three of which I have outlined below.
- Maximizing Client Lifetime Value: Your relationship with your client doesn’t end when you finish his/her first matter. That’s just the beginning. They have dozens and dozens of people they can refer to you during their lifetime. There are many different matters you can handle directly for them. How will you maximize this value?
- Maximizing Lifetime Value of Referral Sources: The people who refer you business may lose interest in sending business your way. They may forget about you. They may think you do not care about them. How will you stay relevant to them and remind them to send you business for the rest of their careers?
- Leveraging Capability: Your team has certain strengths. You can leverage these strengths to develop business in a way that enables you to profitably serve more clients. You must constantly work on ways to leverage your firm’s capability.
While you practice law who is running the business? Don’t think this is a full time job? Here are three (of the fifty or so) things you need to think about.
- Day-to-Day Operations of the Law Firm: As your law firm grows you will hire more people. These people will need to be managed. You will also have processes and systems that must be managed and refined. You will need to continuously increase the efficiency in your firm. This is part of the day-to-day operation of your law firm. Someone must focus on this or it will destroy your profitability.
- Financial Management: You are in business to make money. Your law firm is a business. Someone needs to make sure the bills get paid, the clients get billed, and you put more into the bank than you take out.
- Risk Management: There are many opportunities to make a mistake in the practice of law. If you do not spend any time assessing and evaluating your activity, you will stumble into a hornet’s nest of liability. Thinking about, and acting to avoid this liability is part of the role of a law firm leader.
This just skims the surface of the leadership challenges you face as someone who owns a law firm. The complexity of this undertaking (the role of owner) is stressful enough without adding to it the fact that you are also a full time employee of this business.
The minute you begin to realize this, you can take steps to move forward. Being a full time lawyer and business owner is never going to allow you to achieve your earning potential.
Put another way: If you continue to practice law, day-after-day, you are simply investing in a full time job for yourself.
If you are ready to take the next step and become a business owner, I can help.
Click on the link below to receive my free CD on building a business that enables you to live the lifestyle you deserve. This CD will help bring these issues into focus and it will provide you with some solutions to the stress and overwhelm you currently face.
Your future is too important to leave in the hands of someone else.
Limit Risk in Your Strategic Marketing Plan
There are three areas of strategic risk for a lawyer looking to grow his practice. It doesn’t matter if you are a solo practitioner now, if you want to advance beyond the ranks of a solo and develop a law firm that enables you to make a great living and live a great life ® you must embrace diversity in your marketing mix for your law firm.
I’m not talking about ethnic, racial or other sociological factors. I’m talking about diversity in the form of revenue and how that revenue is produced. You must incorporate diversity into your law firm marketing plan in the way you deal with clients, employees and marketing tactics.
Let’s take a look at each of these and formulate a plan for addressing the risk associated with them.
It is tempting to work with a few clients as possible. After all, it is easier to invest your time and attention in a handful of clients. The prevailing belief is: Direct attention from you will result in a deep relationship and enhanced client lifetime value.
In reality, diversifying your client base is the key to long-term growth. You need to spread your revenue over as many different clients as possible. The ideal number for maximum amount of business from one client, I order to mitigate risk, is somewhere between 10 and 20% of your total revenue.
While some practice areas will always be subject to economic fluctuation, maintaining healthy client diversity will protect you from much of that fluctuation.
As your law firm grows you will need to hire employees and associates. These folks should be responsible for the bulk of the legal work in your law firm. If you want to grow, your team should be able to execute 80-90% of the work necessary from client intake through to closing letter.
This is a constant evolution and solo practitioners never adjust to it. But if you want to build a law firm that produces seven-figure revenue and can someday be sold, your involvement must be in a high level strategic capacity.
As your firm grows and evolves and the work is transitioned to other attorneys and staff, there can be the tendency to shift the bulk of the work from you to one other associate. This can be dangerous. A good metric to help you stay on track is 20%. This means, make certain no one employee is responsible for more than 20% of the firm’s work, client relationships, or billing.
Again, in small law firms, this can be difficult, but this is the goal.
Marketing System Mix
Small law firms are often dependent on one form of media for attracting their clients. The internet and search engine optimization are a perfect example of this. Many law firms invest their entire marketing budget in this area and the minute a change is made to a search algorithm, their client flow is stifled.
The rule of thumb I provide my clients is the rule of 10%. This means your clients should come from at least 10 different sources, with no one source making up more than 10% of your client attraction methodology.
Here is the marketing mix from one of my prosperous clients:
Percentage of Revenue Last Year by Media
- Search Engine Optimization – 9%
- Bar Journal Advertorial – 4%
- Direct Mail to Referral Sources – 8%
- Email Newsletter – 3%
- Client Direct Referral – 10%
- Attorney Referral – 10%
- Networking Group 1 – 7%
- Networking Group 2 – 8%
- Charitable Group Leadership – 6%
- Internet Advertising (ad words) – 5%
- Banner ad on industry website – 3%
- Printed newsletter – 2%
- Direct mail to cold lists – 2%
- Speaking engagement referrals – 5%
- Social media direct referral – 4%
- Personal networking group (created by this firm) – 10%
- Business originated by staff – 4%
A few things stand out:
First: The number of different marketing methods is impressive. This particular law firm has one person who is dedicated to managing marketing activities and that person handles execution for about one third of the initiatives listed above. The remaining 2/3 is executed by outside contractors and freelancers.
Second: The attorney in the above scenario is the CEO of this firm. He oversees the work and approves all client correspondence and interaction but he rarely executes any of the day-to-day legal activity.
This firm has two senior associates, two junior associates and two paralegals. The firm does do both transactional work and litigation. They have three primary niche markets and they produce close to $3 million in revenue each year.
Finally: It took three years of continuous improvement to get the marketing to this level. When I started working with this client 80% of his business came from two sources.
What Does This Mean for You?
Your law firm must constantly work to diversify all activity. Putting all your eggs in one basket has never been a good strategy. Set up your systems. Then hire people to manage those systems.
Here are some additional articles that will help with this process:
This is a great primer on diversifying your client base. In this article we discuss the three types of diversity and why each is important.
This article answers the oft-asked question: How much Time Should I spend on law firm marketing. The answer may just surprise you.
This is the post most attorneys find when they search for “How do I get clients as a lawyer.” It contains some great information on attracting clients and it will help you get started.