Maximizing Client Growth: Working Smarter, Not Harder

What if we told you that you could work smarter, not harder to increase your law firm’s profitability? And that it’s not as hard as you might think. Focusing on these three areas can help you grow your law firm’s client relationships and revenue.

Prioritize Client Retention

The Pareto Principle, or the “80/20 Rule” as it’s more commonly referred to, is a theory that claims 80% of the output from a given situation or system is determined by 20% of the input. In other words, 80% of your law firm’s profits come from the top 20% of your clients.

When it comes to increasing law firm profitability, focus on client retention over new client acquisition. This means focusing on client relationship management over client development. New client acquisition requires more investment of time, money, and patience.

According to Harvard Business Review, acquiring a new customer can be five to 25 times more expensive than retaining an existing one, depending on the industry.

Additionally, conversion time can be anywhere from a few months to several years and generally, fewer than 10 percent of prospects will develop into clients.

Another astounding statistic from HBR suggests that increasing customer retention rates by 5% can increase profits by 25% up to 95%. We know that’s a wide range, but it underscores the importance of how increasing client retention can significantly increase profitability.

So again, focus on client retention and relationship management over new client development and acquisition.?

Identify Opportunities for Cross-Selling

Maximizing cross-selling opportunities is a pivotal driver for client growth within a law firm—the “low-hanging fruit” of client retention, if you will. And if you do it effectively, it doesn’t have to feel like selling.

When you think about cross-selling, think about adding value and solving client challenges. Be a valuable and go-to resource for your clients and their companies.

And be strategic. Ensure your efforts align with firm goals and target clients with the greatest cross-selling potential. Evaluate your network to cull targets based on strength of relationship and decision-making authority.

To do this well, you need to really know your firm and your clients.

Get to know your firm cross-practice, cross-location, and cross-level. More often than you might expect, attorneys aren’t aware of the full scope of services and strengths across their own firms—this is especially true in larger firms and firms operating in multiple locations (or remotely). Lawyers are busy and client work takes priority—we know—but making time to stay abreast of firm news and capabilities is crucial.

Here are a few quick and easy ways to engage with your firm:

• Follow your firm on LinkedIn.
• Keep up with your firm’s intranet and internal communications and meetings.
• Subscribe to firm newsletters and insights.
• Share firm and client opportunities and successes firmwide.
• Seek out opportunities to collaborate across practices and teams.
• Develop industry-focused groups comprising experience across practice areas.
• Use your marketing and business development team’s knowledge and resources.

It’s also incredibly important to know your clients—and their industries. You can’t add value if you don’t fully understand your clients' needs and business objectives. Checking in with clients regularly to stay abreast of company news and objectives is key.

Here are a few simple ways you can keep up with your clients to strengthen relationships and improve client service.

• Leverage LinkedIn—follow your clients' companies and connect with key stakeholders.
• Create Google Alerts to be notified of relevant company news.
• Solicit client feedback on a semi-annual basis to assess client satisfaction and identify needs and opportunities.

Focus on Solving Over Selling

You may have heard us say this before, and we’ll continue to say it, because it’s true and it's paramount to effective marketing and business development for lawyers and law firms.

Unless you’re in sales, most people don’t enjoy selling or receiving an unsolicited sales pitch. Cross-selling and maximizing client growth should be about adding value to existing relationships by efficiently anticipating and meeting clients' needs.

According to BTI Consulting Group, only 19% of clients see law firms investing in the relationship, and only 19% of clients view their primary law firm as an excellent source of new ideas. The numbers aren’t great, but this leaves an opportunity to be a trusted advisor and problem solver for your clients.

Strive to understand what motivates your clients and what keeps them up at night. Think about ways you can make their jobs more efficient. What services does your firm offer that could fill a gap in legal services?

Knowing your clients and their industries enables you to help solve their challenges by proactively sharing relevant industry news and insights. Subscribe your clients to your firm’s newsletters, blogs, etc. Make sure they’re receiving the latest updates about your firm and its capabilities firmwide.

Create Accountability

So, there you have it: a few simple ways to work smarter, not harder to maximize client growth and your law firm’s profitability. Now you just need to make sure to hold yourself accountable. Write down your goals and track your progress.