How to Structurally Incentivize Cross-Selling

Cross-selling or cross-marketing, the process of collaborating with your colleagues to sell additional services to existing clients, is a hot topic for law firms.

When done right, it can yield tremendous benefits, from growing your book of business and generating revenue to deepening relationships with clients by meeting more of their needs and increasing their trust in you and the firm.?

So…why doesn’t cross-selling happen more often?

Here’s the reality: the benefits may be obvious, but building a consistent and effective cross-selling program is no easy thing.?

There are plenty of reasons why this is so.?

An attorney in a given practice area may not be comfortable discussing other areas or may not be familiar enough with the firm's full capabilities.?

Some attorneys may struggle to identify cross-selling opportunities, adjust their working methods, or feel reticent to pass off long-term clients or billable hours.?

The list goes on.?

However, one of the most common reasons that firms fall short of cross-selling potential is that they simply fail to set up the proper structure to incentivize it…and that can mean significant missed opportunities for everyone.?

So, where to begin?

The lowest hanging fruit is a happy client of your firm.

Your clients already know and trust you. They’re happy with your work, they send you referrals, and they send you checks. So they’re more likely to trust your firm with additional legal needs beyond your expertise.??

In theory, everybody wins: You, your colleagues, your client, and the firm.?

The problem is that it just doesn’t happen without incentives.?

Law firms always talk about how they have a collegial environment, how they hunt in packs, and how everyone works together as friends.?

And, of course, if you have a client your colleague can serve, you’ll be happy to introduce them to that client, at least if you’re a nice person and you’re feeling generous, and you’re not too busy that day…

But you can’t just rely on that sort of generosity in practice.?

At a firm that doesn’t structurally incentivize cross-selling, the best way to make the most money for yourself is to sit at your desk billing your clients — NOT walk over to a colleague's desk and bring them some business.?

This becomes even more true the larger the time commitment.

Sure, you might be happy to take lunch or go to a two-hour meeting out of the kindness of your heart.?

But what about twenty lunches? What about a four-hour meeting?

What about a three-day conference, a flight to California, or a trip out of the country?

No matter how generous you are, without a financial incentive, you are forced to start saying no at some point. On the other hand, a solid cross-selling incentive structure can be your firm’s secret weapon.?

One way to encourage cross-selling is to adjust origination credit allocation.

In the traditional model, origination credit is assigned by client.?

So, if you brought in a client in 1992, you get the credit every time somebody at the firm works on that client, whether the matter relates to real estate, corporate, or litigation.??

This generally works great for the person who brought in the client 30 years ago, but there are better ways to incentivize those who do the work today.?

Therefore, there are also methods for sharing origination credit between individuals.

For instance, the split may be based on a percentage — if two attorneys collaborate, they might each receive 50% of the credit rather than one person from 30 years ago getting all the credit.?

Similarly, if two attorneys attend the same meeting, they may come to an agreement between themselves about how to split credit and then let management know what they’ve decided.

Some firms set a minimum credit threshold to ensure that everyone involved in cross-selling receives due recognition, even in cases where the credit percentage might be smaller.?

Other firms split credit by matter rather than who was responsible for the first engagement.?

That means that every time the client gets sued, buys a company, buys a building, or otherwise opens a new deal or case, the firm assigns a new origination credit to a new person for that matter.?

So, if you secure a corporate case at the same meeting where your colleague secures a litigation case, you are each credited for your respective matters.?

That way, everybody who goes to the meeting can win in some way, and attorneys are incentivized to work together and actively seek cross-selling opportunities.?

Even better: some firms make cross-selling an integral part of their compensation formula.

Instead of only rewarding origination and hours worked, these firms aim to bake cross-selling into their overall strategy fundamentally.

This could involve bonus pools, weighted metrics, quotas, recognition programs, or other methods, such as giving attorneys a grade for cross-selling which goes into their yearly compensation.?

The ultimate goal is to motivate collaboration through concrete, structural financial rewards instead of relying on everyone being nice. And for someone nice, who works at a firm with an excellent culture to begin with, this could be just the extra little push they need.

You might be astounded at how much extra business it can bring in.?

Clients care about collaboration.

This also aligns well with clients who want more from their law firms than ever before. They value law firms that demonstrate depth and breadth of expertise and can provide comprehensive service offerings.

Clients also seek simplicity, cost-efficiency, and a streamlined vendor base — meaning they will likely prefer a single firm that can cater to various needs.

Introducing your clients to additional resources and streamlining their legal service can help you forge long-lasting relationships, and you possess a valuable asset in accomplishing this: Your connections.?

But at the end of the day, leveraging those connections must be worthwhile.?

Does your firm reward cross-selling?

Without clear structures and financial incentives, you, your colleagues, and your firm could leave significant opportunities on the table.?

If that’s the case for you, moving to a new firm could also be a way to increase your compensation and grow your book of business quickly.?

Let’s schedule a call to discuss your situation and needs.?