Many law firms have created client development teams in the hopes that this team might be the best tool available to drive revenues and offer a more client-centric approach. However, as client demands continue to grow, your ability to understand the expectations of the client development team and find a way to measure their success is critical to future growth.
I moderated this panel at Legalweek 2023 alongside Jardanian Josephs, Global Director of Legal Operations at Reed Smith, and Justin Hectus, CIO at KP Labs and Kessal, Young & Logan. Read below for our key insights into defining success in client development for your own team — using lessons learned from the software world.
What is client development?
Client development is a relationship-building and nurturing practice to help you earn new business and retain or expand existing clients. Applied to legal, client development isn’t just about marketing and selling your law firm, it’s about truly serving and caring about your clients to ensure they get the most from your services.
And according to Thomson Reuters Market Insights, only 27% of law firm clients say they are asked for formal client feedback by their firms. This means law firms are missing out on a tremendous opportunity to hear from clients about their satisfaction with the services provided and if they’re meeting (or exceeding!) expectations. Being a highly-skilled law firm is just the price to pay to get your foot in the door — continuing to nurture those relationships is becoming a growing expectation and opportunity to stand out.
Client development lessons learned from the software world
From my perspective and experience, I believe software companies, particularly startups, are a great use case in figuring this out. The first objective of a startup is to find “product-market fit.” Product-market fit is the process of finding the target customer that is willing to pay for and use the product a company is building. More broadly, you could approach this from two different perspectives: figure out what service you provide right now and find the ideal customer to buy that service, or if there’s an ideal customer who you already know you want to service, figure out what they want and provide that service.
When I observe law firms, and also because we work with law firms every day at Litify, I’ve seen that lawyers are artists by trade. They practice the art of law and haven’t always figured out the business of law. And generally, that’s the perspective they’re starting from: here’s the practice area we excel in, or here’s my area of expertise, and this is the service we’ll offer. But when I think about client development, it’s shifting that perspective to go beyond that initial practice area, and ideally, take a holistic, coordinated approach to serving the needs of the client’s business. At the end of the day, your clients have business problems, not legal problems, and by changing this mindset, you can better harness your practice’s capabilities in a way that’s problem-based, not just practice-based.
Qualification can be challenging for any company, including a law firm. When you take something as nuanced as the practice of law and you entrust it to a business development team that might not understand all of it to sell those services to clients, you might end up in a situation where expectations don’t quite match up.
“One of the biggest challenges in client development is knowing what is “good business” and what is “bad business” — and it can be hard to differentiate between the two. One of the useful processes we put in place, and I’ve seen this at many law firms too, is a qualification process. When a potential client comes to us, we ask a series of questions to help indicate if it’s the right client, and if they’re a good fit for our services.” — Jordanian Joseph, Reed Smith
Aligning your firm with the right clients, and then aligning those services with clients’ goals by identifying and servicing their needs is a key element in client development and success. So, too, is adding value to clients’ services.
If you can add value to situations, you end up benefiting from them. And if you don’t define value, and the entire relationship is predicated on price rather than results or value, that relationship can go south incredibly quickly.
Difficult conversations with a client will almost always arise. And if your foundation is built on trust and value, it can make those difficult conversations much easier. It doesn’t make them easy, but it makes them easier. If your entire relationship is based on price, those conversations never go well because what ends up happening is finger-pointing. So, going back to qualification, it’s incredibly important to first ensure a potential client is bought into the value you can provide to their business.
“Clients measure value in different ways. Sometimes they want to see predictability or transparency. Price is of course generally an important factor, but it’s taking the client beyond that to see good quality service and proven results. A lot of clients even have a scorecard where they can rank you on your performance, and if they don’t, be proactive and ask questions and get that feedback. Understand what their expectations are and what your value proposition is and put your firm in a position to leave every meeting having communicated that value.” — Jordanian Joseph, Reed Smith
Customer relationship management (CRM)
Now, I don’t want to suggest that a CRM system is a silver bullet when it comes to client development, but having a system in place, such as a Salesforce, can support those efforts. A customer relationship management software is all about centralizing your client information — your data — into a single place. And this source of truth enables you to set processes and targets around client outreach to ensure that your team is coordinated in their efforts and following the same playbook.
“One of the benefits of having a system is that you end up centralizing a lot of rich data. A CRM system will help make sure you’re getting in front of your clients in a methodical fashion by tracking tasks and deadlines, like when you realize ‘oh, I haven't spoken to so-and-so for a while,’ or ‘I set a target to bring this client in and that date flew past me.’ So using a system and doggedly interacting with that system to push toward those targets are really key, and can extend beyond just client development, to just good business practices in general.” — Justin Hectus, KP Labs and Kessal, Young & Logan
Ultimately, from my perspective, client development can come down to timing, so being visible to your clients and communicating with them often is important. It’s not just a technology solution, but also a people, process, and culture solution, and it takes a lot of dedication, focus, and effort.
Beyond client data, CRM systems can also provide insight into those processes. For example, you’ll be able to see that 90 days after signing an NDA, you often to expect to have your first project with a client, and after a year, you tend to move into a second practice area. Getting insight into the benchmarks surrounding your successful clients helps you to build a plan around them and to measure the ROI on your engagements.
Wrapping it up
One of the most effective strategies I’ve seen for client development is starting with a list of what you would define as your most successful clients. And ask yourself, “what is it that they loved about working with us?” You’ll start to see patterns in the data — maybe there’s a particular practice area you’re really excelling in, you tried a different pricing model, or a new way of delivering service. Document everything that made those clients successful, and then operationalize that across the entire business.
"Figure out exactly what people want and give it to them. Actually ask people about the story they want to tell at the end of this project, and work backward from there to ensure you can tell that story at the end. Give that story to them as much as you can and as fast and often as you can. And be singularly focused on that.” Justin Hectus, KP Labs and Kessal, Young & Logan