Hunkering Down To Avoid Cross-Selling

In private practice, every so often the partners get excited about marketing. When that happens, the word trickles down to the grinders that it is time, once again, to feign at least a moderate level of interest in business development. I say “feign” because I still remember just how difficult it once was for me to get excited about trying to bring in new work when I was already working seven days a week.

I remember times in my first few years of practice when I would incorporate a company and feel duty-bound to recommend a shareholder’s agreement to the client. At the same time, I would secretly hope that the client would not want a shareholder’s agreement, because God knows when I was going to be able to find the time to draft it.

What provokes the partners to go on the marketing warpath is usually a period of slow billings. Most lawyers who have been around the block a few times know that the partners will lose focus as soon as they get a few new files in, and most of the time they can be waited out.?

But sometimes it gets serious. Associates and junior partners can recognize when that is happening when they find themselves in department meetings led by marketing consultants who are talking about things such as “low hanging fruit.”?(The first time that happened to me, I was so clued-out that I thought that it had something to do with marketing to farmers.)

Anyway, it usually does not take long until everyone is being told that they have to be “cross-selling.” Someone will quote a statistic about how much easier it is to sell to existing clients instead of finding new clients, and everyone will nod their heads about how cross-selling is the answer.

Cross-selling sounds easy enough. Think McDonalds. A client comes in to ask you to draft a confidentiality agreement and you say, “Would you like an estate plan with that?”?

In practice, it is actually difficult to get lawyers to cross-sell.?Here are some of the reasons why:

1.??????In order to sell an area of practice, you have to know something about it. As a corporate lawyer, I used to be able to sell wills or employment contracts because I knew just enough about them to explain to clients why they needed them.?Nowadays many lawyers are too narrowly trained to be able to do that.

2.??????You can only cross-sell effectively when the client trusts you and knows that you are putting their interests before your own. I learned that the hard way when a new tax lawyer joined our firm and I immediately recommended him to my best client before I figured out that he was not the best tax lawyer in the world. Or even within ten blocks of our office in Mississauga. The client forgave me but told me to never let it happen again.

3.??????Lawyers do what they are paid to do. Many firms want lawyers to cross-sell, but do not make it financially attractive for them to do so beyond some namby-pamby assurance that “it will be taken into account in compensation.” If firms want their Associates to cross-sell, they have to offer them a real incentive.

4.??????Here is the biggie: In order to cross-sell, the lawyer with the client relationship has to be willing to introduce their clients to their Partners and Associates in other areas of specialty.?Therein lies the rub. I knew a real estate lawyer who thought about this as follows: “I have a huge client base. I make good money. Theoretically I could make even more money if I expand the services that the firm is offering to my clients, but that would mean that I have to introduce my clients to my Partners and Associates. If I do that, there is a risk that the clients will like my colleague more than they like me, and I may ultimately lose the client originating credits. Then I might make less money. Or the client might be so dissatisfied with my colleague (especially if we lose some litigation) that they might take all of their business away from the firm.?And then I will make even less money.?I think that I will play it safe and just do their real estate. If someone is going to lose some litigation for them, overcharge them or otherwise annoy them, let that person be at another firm.”

Things happen in cycles in law firms. Eventually the cross-selling initiative fizzles out. Then some time goes by while the partners get excited about something else. Everyone will forget all about cross-selling. And then one day, the chatter about low hanging fruit and cross-selling will start up again and those in the know will hunker down and wait it out again.

This article was originally published by Law360 Canada, part of LexisNexis Canada Inc.