It’s no secret that I’m somewhat sceptical about the reality of cross selling in law firms. To put it bluntly, cross selling isn’t well practised by lawyers. Which is a shame, because the benefits are actually there for both the client and the law firm. For a client with a variety of legal needs, doing business with a single diversified firm is highly convenient. It’s an inherent advantage that clients can address business needs simply by tapping more deeply into the capabilities of providers whom they already trust, reducing the need to shop around. Clients can also achieve greater economies of scale themselves with legal service suppliers—reducing several different cost areas at once and qualifying for more comprehensive price plans.
For the law firm, expanding relationships with existing clients who already value the firm’s capabilities is a panacea of sorts. Get cross selling working, and you get organic growth. Get it working and value is driven.
But the reality couldn’t be further from the ideal. Cross selling within law firms is broken. And given the marketplace is as tough as any of us have seen, law firms need to be asking why they are failing to deploy this potentially potent weapon into the field of battle.
Well, if it is broken….
The evidence of failure is hard to dispute:
Firms made up of service line ‘silos’ which engage their respective markets separately and which lack knowledge of other partners’ practices. Remuneration systems rewarding ‘lone ranger’ behaviours. Underlying barriers caused by mergers, acquisitions and incompatible legacy systems. The general unwillingness amongst partners to share clients, whether through fear of ‘losing’ them or just sheer selfishness and self-interest.
Add to this the very nature of the partnership structure, with decisions typically made by consensus, this all often culminates in the cross promotion of services becoming a topic of delayed decision-making and abstention.
How to fix it
Too many firms pay lip service to cross selling. Yet the concept itself is relatively straightforward. As a marketing objective, it’s merely about selling an existing or new service line into existing clients. Quite often, 80 percent of business comes from 20 percent of clients. Listing services bought in, analysing the gaps and assessing the needs for those 20 percent of clients is a good place to start.
Asking the question ‘what do our clients buy that they don’t buy from us but we could profitably supply?’ is often all it takes.
Implementing and ensuring it happens is the crux. If a firm is truly serious, an organisational system should be put in place, driven by the management board, to facilitate the process straight from the top.
An ‘opportunities board’ – an organised and entrepreneurial board of partners – should be created, sufficiently senior to control the purse strings and to incentivise and influence other partners and lawyers.
The opportunities board will:
Overcome barriers to cross selling
Often the constraints are client ‘hugging’, a general lack of incentive towards cross selling, interpersonal friction between teams and departments, lack of motivation, organisational barriers such as old IT or legacy systems, dogmatic internal policies, inadequate marketing skills, practitioner career competition and lack of mutual trust. The board would need to ask:
1) What are the firm’s current constraints against cross selling?
2) Can the barriers be reduced or removed?
3) What incentives exist for cross selling to occur?
4) What are the risks involved in cross selling as perceived by practitioners and other members of the firm?
5) Can these risks be eliminated or reduced?
Proactively manage opportunities
It would be the board’s remit to leverage the knowledge and relationship assets of the firm’s professionals. They would need to be committed to doing this. They could make it their primary function. They would need to be focussed on sales. They would need to meticulously track potential engagements and the revenues that could be expected. They could focus on creating a pipeline, derived from leveraging relationships and cross selling service lines into clients.
Demonstrate exemplary knowledge of the firm’s capabilities and expertise
The board must lead by example, being aware of all the services that can be offered to the client. They must have access to the complete register of practitioner qualifications, experience and capabilities. They must be of a ‘marketing mind’; they must be able to bolt together relevant service offers which meet an actual or latent client need. The board must be capable of developing an internal communications strategy to effect cross selling. They must also be capable of conducting and evaluating client potential. The board would need some technical and analytical support as clients’ needs are often established superficially by the most basic of parameters.
Ensure focus on relevant targets
The board would be responsible forcreating an analytical system to identify the major characteristics of good, regular clients e.g. size of company, method of operation, type of activity, forms of purchasing or whatever characteristics are appropriate. The profile is then applied to prospect firms so that those conforming most closely to the best client profile can be identified and flagged as priority targets. It’s a relatively simple but extremely useful and valuable analysis.
Develop a cross selling plan
This will be based on the spectrum of problems and opportunities that the board has identified and their clients’ priorities. They would need to ask tough questions. Where can we best meet client needs? What opportunities can our capabilities most help clients address? Where can we use our expertise and industry knowledge to further develop clients’ needs? What opportunities should we pursue that will put us in a stronger position than the incumbent or other competition?
Conclusion
It’s usually the human elements that present the greatest barriers to effective cross selling. There’s usually little or no reward for the individual or team. Their first priority is to meet their own quotas, not someone else’s, and to service their own clients to the best of their ability. Internal rivalry for promotion and its associated rewards can well militate against enhancing an internal competitor’s performance, even when it would have been positive for the firm. Those partners involved in the servicing of clients may, indeed usually, have reservations about ‘exposing’ their clients to other parts of the firm that may not perform to what they regard as a sufficiently high standard, and thus even lose the client for the introducer.
But the industry is in a state where it can no longer be about the individual and their objections (however passive or vocal).
The fact is, firms need to permanently evolve in all areas of the business to reflect the ever-changing needs of their clients. A board designed to lead the discipline of change management and to uncover opportunities must be incorporated into the culture of the business. But critical to this success is ensuring that a firm doesn’t abandon its core values as perceived by its clients, as it develops. Firms must be prepared to do things in a different way to achieve ongoing success. If firms are to survive – and thrive – they will need to engage their workforce at all levels, which can only make for a more collaborative and successful approach.
