Question:
I am a member of our firm's executive committee. We are a 16 attorney business transactional firm in Seattle. Recently the firm has lost several key clients and we want to know what we can do determine why this happened and what we can do to improve client retention. I would appreciate your suggestions.
Response
I would conduct a lost client survey. This type of survey is used if your firm wants to know why you have lost a particular client or group of clients. With this survey interviews are conducted (usually by telephone or in person) with clients that no longer do business with your firm. Let the client know that you are sorry that he or she is no longer doing business with your firm and that you are interested in learning from your mistakes. Understanding your client’s reason for leaving will help you make improvements for future clients. One of the greatest benefits for this type of survey is that you are often able to discover the specific reason a client left.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am owner of a four attorney firm in Amarillo, Texas. We represent both individual and institutional clients. Recently, we have had numerous complaints from clients advising us that our services took longer than expected and fees were also higher than expected. I would appreciate your thoughts?
Response:
Based upon client satisfaction surveys (telephone interviews) that we do for law firms we find that one of the biggest problems is that the attorneys are doing a poor job of managing client expectations. Your clients get frustrated when you promise one thing (timeline or fees) and the result is very different – especially when the work takes longer than promised or the fees are higher. Even though you don't structure it as a promise your clients take it that way. The key is to under promise and over deliver. I suspect that upon the initial client meeting you are under estimating the timeline and low balling the fee range. Reduce the promise – increase the - timeline and fee range and then shoot to deliver under that range. This will do wonders for improving the client relationship.
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Question:
I am the owner of an estate planning firm in Oklahoma City. I have four associates that work for me in addition to two billable paralegals and three staff support members. I am looking for ways to improve our business development and marketing. The majority of our business comes from past client referrals and referrals from employees and friends. We spend a considerable amount on advertising which includes our website, print ads, collateral materials, newsletters, etc. We would like to do more to increase client business. I would appreciate your thoughts?
Response:
I find it interesting that you did not mention referrals from other lawyers. I have many estate planning/elder law clients that receive a major portion of their clients from referrals from other lawyers. This should be a key component of your marketing plan. Your business development and marketing efforts should address this potential referral source. You should be investing targeted time:
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John W. Olmstead, MBA, Ph.D, CMC
Question:
We are a 25 lawyer insurance defense firm in Northwest Dallas. We are managed by a managing partner, firm administrator, and director of human resources. We have been discussing the need for a marketing director. Are we too small? If we decide to hire one what should we be looking for and where should we start our search?
Response:
There is no magic size. I have seen five lawyer firms effectively use a marketing director and thirty lawyer firms that do not have one. It all comes down to your firm's specific need, what you are wanting to accomplish, and what the lawyers are willing to let a marketing director do.
While the popular title is marketing director, director of client and business development, etc. some marketing staff in smaller firms often function more as marketing coordinators and event planners. If you are looking for someone to help the firm devise a competitive strategy, lead the firm's strategic planning effort, help diversify the practice, etc., you need to look for an experienced marketing director with five plus year's experience in law or other professional service firm marketing at a director level.
If you need someone to update the website, write bios, write blogs, update social media, create brochures, and plan and coordinate events – you may only need a marketing manager or coordinator with excellent writing skills. Prior experience in law or professional service firm marketing is a plus but not required. Journalism and mass communications are popular degrees for this position.
The Legal Marketing Association (LMA) is an excellent source for finding candidates. Here is a link to the LMA job bank
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the managing partner of a twenty seven lawyer insurance defense firm in Orlando, Florida. In the last seven years we have grown from ten lawyers to twenty seven. Our firm is very dependent upon a handful of insurance companies and we are looking at ways to diversify our practice. Our rapid growth has caused us to outgrow our management structure. A few years ago we hired our first firm administrator to manage the business operations of the firm. We are now considering establishing a business development/marketing position to help focus our business development efforts. I would appreciate your thoughts.
Response:
I would start by giving some thought to your organizational structure overall. How and where does this position line up with the other management positions in the firm? Will the position report to the firm administrator or will the position be equal in stature to the firm administrator and report to the managing partner or executive committee? What will be the title of the position – marketing director, director of business development, business development manager, etc.? Will the position have assistants/direct reports? What are the position's performance expectations and duties?
Often law firms do not have a successful experience with their first business development/marketing manager. Typically this is a result of not taking the time to define the position, performance expectations, required skills and competencies, and hiring a candidate with the maturity and leadership required to be successful in the role.
Here are a few suggestions:
SAMPLE JOB DESCRIPTION
The business development manager is responsible for the management of all aspects of business development within the firm and supports business development initiatives within the firm. This management will occur either through direct activities, direct reports or delegation to subordinate staff. Responsibilities include but are not limited to:
Doing your homework upfront will pay dividends and insure that the position is successful.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the managing partner of a 16 attorney business transactional firm in Chicago. Over the last five years we have lost several core clients due to client consolidation of their outside law firms and mergers of the clients themselves. Competition is getting fierce in our market, our services are being viewed as commodities, and it is getting harder to stand out. What can we do to differentiate ourselves from everyone else? We welcome your thoughts.
Response:
Creating a competitive advantage that is sustainable over time is difficult at best. It is so easy for your competitors to copycat your recent innovations. Clients of law firms advise us that they hire the lawyer – not the firm. However, this only partly true. The firm – its image – its brand – provides a backdrop for the individual attorneys marketing efforts as well – makes marketing easier – and provides backup and bench strength that many clients require before retaining a lawyer.
In general the law firm is faced with the dual challenge of developing a reputation (brand) at both the firm and the individual lawyer level. In general – client delivery practices and behaviors that are part of the firm's core values and have been burned into the firm's cultural fabric are the hardest to copycat.
Areas in which you can consider differentiation strategies:
https://www.olmsteadassoc.com/blog/category/strategy/
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the managing partner of a 14 attorney estate planning firm in Lexington, Kentucky. We took a hard hit in 2008 when the recession hit and have just been recovering over the last couple of years. Business is up but profits are still flat. We have not raised our hourly billing rates for several years for fear that we will not be competitive and will lose out on business. However, we believe that we must increase our billing rates and are concerned. What are your thoughts?
Response:
I would bet that you are leaving money on the table and you should in fact increase your billing rates. Often I find that law firms are more concerned about their rates than their clients are. You must remain competitive for the value package (including your experience, expertise, and reputation) that you are delivering. This does not mean being the cheapest estate planning firm in town. Some of my most successful estate planning firms are those charging the highest fees.
Here are a few thoughts:
You may find that clients are not as concerned about your fees as you are.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the sole owner of a debtor bankruptcy practice. I have one other attorney and three staff members. Last year we spent $50,000 of advertising. Our fees collected were $550,000 and Net Income was around $160,000. Are we spending too much?
Response:
You are spending 9% of fee revenue. I believe that in a consumer practice such as personal injury and debtor bankruptcy you have to spend around 10% of fee revenue to get the business you need to sustain the practice. I have some practices spending 19% of revenue.
So, I don't think you are necessarily spending too much if the advertising is working for you. You have to constantly measure the ROI on your advertising and fine tune it when needed.
Also, insure that the business is actually coming from the advertising – in other words don't advertise to get business you would have had anyway or in a market that you have saturated and more advertising will not yield any additional business.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the managing partner with a 14 attorney firm in Cleveland. A friend of my just advised me that Google was coming out with a change to their search engine that might impact our website. Have you heard anything?
Response:
Yes. Google is making a change to their algorithm on April 21, 2015 that will favor mobile-friendly websites.
If your website is not truly compatible with the hundreds of millions of mobile devices out there your search ranking will be penalized. Google is drawing a line in the sand when it comes to mobile functionality and search engine results.
I suggest that you update your site as soon as possible. We are having to upgrade our site as well. Weblinx from the ChicagoLand area is doing our upgrade
Here is a link to a Google tool that will test your site.
Here is a link to other information regarding the Google update
I believe that a firm's website and it's search engine optimization strategy is a top marketing priority for all law firms and worthy of appropriate investement to keep it working for you.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am with a 17 attorney general business firm located in Boston and chair of the firm's three member marketing committee. At this year's planning retreat we discussed the concept of niche marketing and whether we should focus on a specific niche. Your thoughts would be appreciated.
Response:
A niche marketing strategy can help you stand out from the crowd by focusing on a particular segment. Here is an outline of a typical niche marketing program.
Often a niche strategy does not involve a new area of practice – it may involve delivering services that you already perform – but marketed to a specific industry group. In essence you are learning the unique needs of a specific industry group, learning their language, and demonstrating that you understand their business better than your competition. An example would by an insurance defense firm that handles the defense for a couple of trucking cases and then creates a niche around the trucking industry.
Place your niche marketing strategy carefully. It takes time, financial resources, and commitment to successfully pull off a niche marketing strategy. Don't try to focus on more than one or two niche markets and insure that the niche that you are targeting is large enough to satisfy your objectives and justify the time and resources that you will be required to invest.
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John W. Olmstead, MBA, Ph.D, CMC