Hosting an event - success is more than filling a room

In recent months I've spoken and written a great deal about measuring ROI, or return on investment, as law firm leaders continue to face tough choices about where to spend the firm's hard-earned capital.  One question I'm asked frequently is whether hosting an event is a good idea for generating visibility with existing and potential clients, or for demonstrating subject matter expertise that will influence a buying decision. Many organizations operate as if the notion of hosting an event is self-evidently a good idea, but some achieve extraordinary results while others can barely fill a room. Our intent here, then, is to provide a framework for identifying the relative benefits of hosting an event. How can we turn an event into a means for generating revenue? What distinguishes a good event from a poor event, or a great event? In many law firms it's not uncommon for several groups to compete for limited resources to support their pet events. Should the seniority of the requestors or the relative investment potential dictate the resource allocation?

It’s All About ROI

Measuring the investment return of any marketing initiative can be an elusive goal. Rarely can we draw a direct line between a marketing activity and a prospect’s subsequent buying decision. Law firm marketing is no less challenged than marketing in other fields in this regard. Consider that few studies have found, and certainly the intelligent among us will never admit, that seeing a television advertisement for, say, a luxury automobile leads directly to our buying decision. When queried, we refer to a reputation of safety and solid engineering; the roominess of the interior and how it suits the number of family members; we quote the gas mileage and refer to amenities such as the on-board computer and heated seats, all of which we scrupulously researched and compared with the features offered on alternative vehicles. Similarly, few of us will admit to finding a doctor or lawyer in a Yellow Pages ad or directory, except perhaps those who have relocated a great distance and have yet to establish a local referral network. Yet there are a lot of television advertisements on every station, all day every day, from these companies and many more purchase newspaper and Yellow Page ads. Are these business owners operating under a mass delusion, throwing their hard-earned money away in a futile attempt to influence our buying habits?

The operative word here is influence. Few marketing tactics summon a call to action so intense that targeted buyers drop everything and rush to make a purchase. Well, maybe late-night infomercials drive this behavior, but that results from a mystical combination of repetition, hypnosis and foreign accents to which none of us is immune! The rest of the time, advertising and other marketing activities are designed to influence our buying behavior, little by little, impression by impression, forming in our minds a good feeling that we come to associate with the product or service offered. We don’t buy the luxury vehicle because we expect this will lure the attractive and much younger companion portrayed in the commercial. We buy, in part, because of the feeling of vigor and youth these commercials conjure in our minds. The more we see of this marketing, the more we associate the product with these good feelings. No single tactic will necessarily have us leaping for our wallet, but the combined impact of many tactics, particularly a coordinated campaign of different tactics over time, will influence our buying behavior. So for our purposes here, we'll look at how to assess the relative influence of one event over another, in order to derive some measure of return on investment, or ROI.

Why Host?

First let's clarify why we’re hosting an event, such as a breakfast briefing on recent regulatory or legislative changes in a specific industry, or an open house for a new office location. In some cases, the objective is merely to increase visibility with a target audience, perhaps existing clients we haven't seen in some time. Sadly, while it’s considerably less expensive and onerous to simply pick up the phone and arrange a catch-up lunch with a valued client, many lawyers will go to great lengths to indulge their introversion and avoid the potential for rejection ... so let’s host an event! To be fair, it's not a bad idea to host a non-business social event merely to stay in touch with clients with no pending matters or to meet potential clients. Sports outings, whether in the sky box or on the links, are often suitable for this purpose. So long as expectations are managed and there isn't a belief that a million-dollar engagement will result from this glad-handing, this sort of event can be helpful. From an ROI perspective, this is an investment in long-term visibility with minimal expected return and a cost significantly higher in dollars than the equivalent in lunch dates. Less expensive lunches that are never scheduled obviously generate a much lower Expected Value than more expensive social events that fill a room.

But what about the business-oriented event, where we unabashedly present some meaningful content designed to demonstrate our domain expertise and influence buying behavior in clients or potential clients who ostensibly need our services? There is a great deal more in play here and there are clear metrics to help distinguish between worthy events and wannabes. Most skilled event planners employ an event project plan that captures all the salient details, expectations, deadlines and costs for the event. The first hurdle is simple: If your event planner operates without a plan and/or if the lawyers are too busy to plan well in advance and provide necessary details, then don’t bother! It is quite obviously a touch more challenging to make such bold statements to law firm partners who are insistent on hosting an event, but only the partners who are foolish with their hard-earned capital will skip, or allow their partners to skip, this critical step. Establish a best practices planning model for your firm and stick to it. If you can't or won't invest the time to plan ahead, then take whatever expectations you have for the event and reduce them by half, and then half again.

Planning

A typical event plan will identify the target attendees and the desired demographics. For example, our conference room or hotel ballroom size may dictate that we can host 50 guests, plus a modest number of partners and firm personnel, leaving us a comfortable margin before we reach the fire code limit of 75 occupants. Then typically we identify the right attendees based on the subject matter and we send invitations, tracking RSVPs until we reach the desired number, allowing for the inevitable no-shows. Poor response rates can be indicative of weak marketing, but just as often result from insufficient notice or a topic that's no longer timely. Law firms that regularly present cutting-edge topics operate events like a well-oiled machine and inevitably outdraw those that deliberate and procrastinate until the topic is played out.

Sooner or later a partner will submit a last-minute request to host an event on an aging topic. While it may be politically untenable to simply say no, a review of the event metrics after the fact may prevent repeat offenders. A relative measure that can prove helpful is revenue footprint, or the total revenue associated with the clients (or former clients) in the room. Simply identify the historical, current or expected billing revenue of the audience. Events with a higher revenue footprint typically warrant more time and attention. Events that result in half-empty rooms, with marginal clients on hand, suggest that key clients found more compelling distractions for their time.

Measuring Value

But the value of hosting an event is better measured by the realization than by the potential. Through experience, some event organizers will establish a revenue target, a figure that clients or prospects in attendance are expected to generate in the coming months. As we’ve discussed, the event might be just one of several market tactics put forth by the firm to influence a buying decision, but for our purposes here we’ll count it. (More statistically rigorous approaches apply different weights to the various marketing tactics to deduce relative influence.) It’s also necessary to establish a sufficient time horizon, say six months, within which we expect the event to influence the opening of a new matter.  Keep in mind that some opportunities take years to materialize, so there's no standard time period within which to track influence.  A mid-sized law firm in the southeast periodically presents well-regarded legal updates on the shipping industry, and the firm has taken to assigning a revenue objective for each event. As an example, it might expect the October briefing to generate $250,000 in new matters within six months. Note that this refers to the total expected deal size, not the actual billings by that date.

Establishing a Target

By establishing a revenue target, it becomes a lot more palatable to establish an expense budget. A common lament of event planners is the mandate to produce a high quality event but with a very limited budget for necessary expenditures. Of course it's important to be prudent, but in context the event expected to produce $250,000 in revenue can probably withstand the extra $50 tray of canapes. The key is to identify which expenses improve the potential revenue. Hosting the event at a small, out-of-the way boutique hotel might cost less, but hosting the event in the centrally located downtown University Club might improve attendance by 50%. Good event planners will develop expertise over time as to which variables have an impact on the top line, typically by tracking multiple variables and analyzing which of these variables are present at events which have turned out to be more lucrative.

The mechanics of tracking revenue are fairly simple, though typically not automated. For the clients who were in attendance, the marketing team monitors new matter openings over time. When a new matter is, or appears to be, connected to the topic of a recent event, they will confirm with the billing partner and establish an expected matter value. The team reports monthly on the accumulated revenue generated by each event, highlighting those in which revenue exceeds expectations and revenue falls significantly short of expectations. With each cycle the team becomes better at establishing appropriate revenue targets.

As you might expect, if we’ve established both revenue and expense targets, it's no great leap to establish a profit target. And this can become the great equalizer when comparing the viability of competing events. Should we host a series of bi-monthly events that in aggregate will generate $800,000 in revenue at a cost of $72,000, or should we host a much larger event that costs $150,000 but is likely to generate $2 million? A large West Coast law firm has hosted a very elegant, all-expenses-paid weekend away outing for key clients that combines some business with a lot of recreation, and this event sucks up most of the marketing team’s available bandwidth for months and incurs huge expenses. The return, however, is minimal. As it turns out, the profit margins generated by the firm’s East Coast office for routine breakfast sessions tend to be more appealing, albeit in smaller portions. The firm audited its own performance and determined that it might generate more billables by expanding the breakfast briefing program to more offices and practices and doing away with the gala weekend event. However, firm management hasn’t yet pulled the trigger because it ascribes some of the gala investment to the aforementioned "staying in touch," which has understandably lower expectations.

The Bottom Line

This is the essence of law firm marketing ROI: making informed decisions where previously there were no data. If firm management wishes to deploy limited resources in an efficient manner, it’s helpful to know which events generate revenue, which attract key clients or targets, which are profitable and which are not. If firm culture encourages each practice group to plan its own events without regard to the financial performance, that’s fine too. However, the ability to make strategic decisions with the firm’s capital is fast becoming a competitive differentiator and increasingly business-savvy practice group and firm leaders should be pleased to know that measuring event ROI is not as elusive as it once was.

A version of this article was originally published in my Leadership in the Law column for Marketing the Law Firm, an ALM publication.

Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

THE Conference to attend: Pricing, Practice Innovation, Project Management

Join me in Chicago in October at P3 Conference hosted by the Legal Marketing Association.  Regular readers know that a consistent theme in this space is the role of established business practices in a modern law firm. While it may have been possible in the past to operate a law firm as a hobby in between billing hours, and it may have been possible to generate handsome profits without regard to the client's perceived value, and it may have been possible to ignore standard business metrics because the phone always rang, the modern law firm leader and the modern law firm must adapt.  As clients increasingly look to extract cost savings from the legal function and improve the predictability of outside counsel expenses, it's critical for law firms to change with the times:  strategic pricing, alternative fee arrangements, project management, leadership training, cost accounting, return on investment and other micro-economic lessons are necessary components in the modern leader's toolkit.  The Legal Marketing Association has combined these topics into a multi-day conference designed to provide comprehensive education and to provide networking opportunities for those whose daily duties involve these topics.

The P3 Conference will commence on 30 September 2013 and concludes on 2 October.  Registration is limited and filling fast, so don't delay in confirming your attendance.  The registration fee is exceptionally affordable given the depth of the content and the quality of the speakers.  If you're not a member of the Legal Marketing Association, join now and benefit from favorable member rates.  While most LMA members spend their days providing marketing and business development services in or to law firms, many new members are in-house counsel, law firm partners, law firm finance and pricing professionals, technology experts, consultants and providers of products and services to the legal profession.  LMA is unique in that all stakeholders are full members... no "haves" and "have nots" in this association of like-minded professionals!

For insights into the genesis of the conference, directly from the desk of the conference chair and one of the founders of the modern law firm pricing movement, visit Toby Brown's excellent article at the 3 Geeks law blog.  For full details on speakers and topics, visit the LMA P3 conference website.  Click here to register.  And be sure to stay at the fantastic Wit Hotel in Chicago, and join us for a drink at the famed rooftop bar overlooking the Loop.

I look forward to seeing you there!

Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

Measuring ROI in a law firm - even if it's possible, does anyone care?

Many organizations do a poor job of measuring the return generated by their various investments.  As a result, many initiatives fail to deliver impressive results even while the organizations as a whole are performing well.  Imagine a professional sports team that measures only wins and losses and ignores individual statistics such as points scored, penalties assessed or defensive lapses.  How do the coaches know who needs help?  How does the general manager know who to reward handsomely with a new contract?  How do the players know what skills to hone in the off-season?  Obviously a quality sports team will focus on a myriad of individual elements that, combined correctly, produce wins, and, combined poorly, tend to produce losses.  Measuring the return on investment (ROI) of our various expenditures should be viewed in the same light.  After all, if we don't measure how well or how poorly our many initiatives are doing, how can we improve our performance?  As the late legendary Coach John Wooden used to say, "Failure is not fatal, but failure to change may be." I conduct workshops on this topic regularly to different audiences, including law firm technologists, marketers, directors of finance, partners and in-house counsel.  While the ROI discussion may vary depending on the stakeholder, there are a few common themes.

Measuring ROI may not require heavy math, but it very likely involves stepping out of your comfort zone.  The classic example comes from the advertising world where the creative types at agencies devise compelling advertising that catches the eye but may not provoke buying behavior.  As one CEO scoffed when presented with a visually rich and quite expensive campaign idea, "I don't care about creating art, I care about moving units."  In a law firm, a technologist may feel upgrading to the latest voice-over-IP phone system is long overdue, but given the considerable expense and time needed for a firm-wide upgrade, it may require a financial analysis plotting the cost of maintaining an older phone system against the cost and benefits of the upgrade.  A law firm marketer asked to produce a client alert for a news item that every competitor discussed weeks ago may have to (gently!) push back by demonstrating that the optimal window to maximize "click though rates" has long since passed.  ROI discussions often involve the mastery of different dialects to make the case to others.

ROI is a relative measure, not an absolute measure.  In a basketball game if Joe pulls down 5 rebounds per game and Andre pulls down 6, who gets the coach's praise?  What if we learn that Joe is 6 feet tall and Andre is 7 feet tall?  If all other factors are neutral, we should expect Andre to significantly out-rebound his shorter peers.  In this light his performance is not very impressive.  If a law firm hosts a seminar that draws 15 people, is that good?  If we invest $2 million in three lateral partners and they deliver $2.5 million in new billings in year one, is that acceptable?  There is often not a specific hurdle past which everyone can objectively state that "We achieved a successful ROI."  It's only by comparing the ROI of an initiative to alternatives that we can ascertain whether the ROI is acceptable or not.  If the 15 attendees of our seminar represent top-level decision makers at target prospects, this might be a much better investment than a larger event with 90 client attendees representing staff lawyers with no input on outside counsel selection.  What if we delayed implementation of a key client program by two years in order to invest in our lateral recruitment, but even a conservative estimate of our cross-selling forecast suggests that we could have generated $5 million in new billings from existing clients?  Were the lateral recruits such a good investment after all?  Good organizations compare the relative ROI of various initiatives and the best ideas must earn the capital investment.

ROI can only be measured over time.  Law firms generally operate on a cash accounting basis, which involves counting revenues and expenses one year at a time and distributing excess (a.k.a. profits) to partners annually.  This forces a one-year-at-a-time mindset, whereas most businesses operate on an accrual basis, which makes it much easier to consider investments over a longer period.  Imagine the junior partner, looking to improve his networking at the country club, who takes a golf lesson.  At the end of the lesson if he hasn't dropped his handicap from 30 to 5, he typically doesn't quit in disgust because he recognizes that improvement takes time.  Yet this same partner may sit on a cost-cutting committee that votes to "eliminate the trust & estates practice group because last year it wasn't as profitable as other practices."  But simple analysis may indicate that 35% of our highest-revenue litigation cases come from companies whose CEOs are T&E clients.  And of these CEOs, 60% were T&E clients first, indicating that the T&E practice is an effective feeder for the litigation group.  Removing this feeder skyrockets the "cost of sales" for the litigation group, instantly eliminating any savings from disbanding the T&E group.  Your mileage may vary, of course, but only by studying trends over time can we make these connections.  By viewing ROI as a snapshot in time, we tend to make flawed decisions.

There's so much more to say on this topic and it's particularly needed now, as law firm leaders are scrutinizing expenses across the board and struggling to find the right formula to generate profits.  One universal challenge is that measuring ROI forces us to address sacred cows, those pet expenditures that we just know are good ideas but that no one can prove.  Telling a partner that he cannot continue to invest in a luxury sports box is a lot more challenging for the executive committee than laying off secretaries, after all. But the bottom line is that measuring ROI allows us to make informed choices about where and how to spend the firm's capital... even if some of the final decisions are dumb ones.

For legal technology readers, feel free to join me as I conduct a webinar with ILTA on August 7, 2013 at 12 PM ET on this topic.  For more information and to register, click here.  Others can click here to read a recap of a recent presentation I delivered to legal marketers in Chicago, thanks to Sania Merchant and the National Law Review.

Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, click here or contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

Improving the Certainty of Legal Budgets - a Collaborative Workshop

It's law firm annual retreat season and I've been traversing the country presenting to practice groups and entire firms and preaching the importance of predictability in legal budgets.  As one client wrote to me afterwards, "Thank you for making 'predictability' our new buzzword!"  My perspective is somewhat unique, as I explain how using budgets can improve the quality of the legal work product, improve client satisfaction and generate greater profits for the law firm.  Who wouldn't want to achieve these disparate and elusive outcomes simultaneously?  Well, quite a few, as it turns out.  Many lawyers raised on the billable hour continue to feel that any approach other than maximizing hours is a slippery slope, destined to result in increased risk and lower compensation.  They could not be more wrong, and as regular readers of my articles can attest, I can demonstrate this in terms that even math-challenged lawyers can embrace! There are quite a few tactics and tools to help in the creation and fine-tuning of legal matter budgets.  In fact, I will be participating in a collaborative workshop on Thursday, May 16, in Washington, DC, where groups of in-house counsel and outside counsel, along with colleagues from the law firm marketing and finance departments, will work together on strategies and tactics to develop legal matter budgets.  What information is necessary?  How much information should law departments share to help law firms craft an RFP and a budget?  Who's responsible when something unexpected occurs and the budget no longer reflects the scope of the matter?  And so on.  If you've struggled with these issues or others related to legal matter budgets -- and honestly, who hasn't? -- then join us.  The workshop is produced by TyMetrix, and here's the workshop agenda:

Opening TED-Style Discussion: Emerging Trends in Buying Legal Services—Law firms and corporate law departments will collaboratively examine key elements and challenges that arise when budgeting and forecasting the business of law. The group will discuss what current tools that exist to improve planning and the factors that must be considered, such as average matter durations, total costa, rates, and staffing allocations for matters by timekeeper role, phase, task, and geography.

Workshop Collaboration: Improving the Certainty of Budgeting and Forecasting—Hear and discuss new ways corporate law departments and law firms can improve the certainty of budgeting and forecasting in case study exercise with peers. Groups will examine a real-life legal challenge and develop a proposal that is acceptable to both the firm and the corporation.

Workshop Results & Discussion: Scope, Baseline, Benchmark, Value—Upon conclusion of the group exercise, there will be a collective presentation of the workshop findings mapped to four defined pillars—Scope, Baseline, Benchmark, Value—that provide a blueprint for better budgeting and forecasting for both law firms and corporations.

TyMetrix LegalVIEW^® Forums are peer-to-peer content driven sessions designed to exchange ideas and best practices related to an emerging trend in the buying—and selling—of legal services.

Join me in Washington, DC on May 16 by registering here.  Enrollment is free, but come prepared to roll up your sleeves and contribute.  If you can't make this session, there are two more in the series this year:  July 11 in Chicago ("Sourcing Legal Providers in a Changing Business Environment")and September 26 at Terranea Resort in Rancho Palos Verdes, CA ("Negotiation Strategies for Corporations & Law Firms").

Each session generates best practices in the form of a white paper which is available to all.  Here is the white paper that was produced after the workshop held in February, Establishing Value-Based Pricing and AFAs.  See this synopsis by Dr. Silvia Hodges.

Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, click here or contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

Closing Skills of Successful Rainmakers... and other Myths

I was recently invited to present at a law firm retreat on the topic of closing skills, presumably in the hopes that my remarks would magically transform reluctant partners into willing rainmakers.  As the partner in charge of retreat planning said to me, "We need to give our weaker partners a shot at carrying their own weight, otherwise we need to make some changes."  Before agreeing to present at the retreat, I asked the partner if the successful rainmakers would be in attendance and open to new ideas as well.  He assured me that attendance was mandatory for all, and if I needed help the successful rainmakers would be happy to contribute anecdotes of their own successful techniques.  We then proceeded to talk basketball, as we both shared an interest in an NBA team that was likely headed for the playoffs. When I delivered my remarks at the retreat, I included a number of basketball analogies.  Yes, I know, sports analogies are trite and overused and often gender-biased.  But the quote providing the theme for my remarks was offered by legendary UCLA basketball coach John Wooden, whom I've quoted previously, and has wide appeal:  "It takes ten hands to make a basket."  In short, my goal was to bust the myth that rainmaking is a skill akin to scoring in basketball, that a successful law firm simply needs more scorers to thrive.

The reality is it takes a coordinated effort between lawyers who are successful at networking and generating visibility for the firm, and lawyers who can not only successfully understand a client's business challenges but create custom solutions to address the challenges, and lawyers who deliver the legal work necessary to achieve the desired outcome, and lawyers tasked with managing the project and ensuring that it stays on track and on budget, and lawyers who continually communicate with the client to minimize surprises and stay abreast of new developments, and staff professionals who provide support for all of the above, and so on.  This is not unlike a basketball game in which one player boxes out the opponent and secures a rebound, and another player pushes the ball up court, and another player sets a screen to free a teammate, and another drives to the basket and draws the attention of several defenders, and another player spots up in the corner so when the driving player passes the ball he takes, and makes, the open shot.  Beautiful basketball is a team sport, and so is running a successful law firm.

Not only are there no magical words that will transform reluctant rainmakers into gregarious, glad-handing, back-slapping master networkers, there is no certainty that finding, or developing, such skills is a guarantee of success.  Here are five common myths about rainmaking that we can dispel right now, with corresponding suggestions for alternate approaches:

Rainmaking is not the same as networking.  While being visible in the community of clients and potential clients is important, it's only one facet of rainmaking.  Some lawyers enjoy, or at least can tolerate, the cocktail and conference circuit, and the visibility is undoubtedly beneficial.  But simply becoming known is only part of the equation.  And there are many ways to become visible, including authoring scholarly articles on substantive legal matters, blogging about emerging trends of interest to clients, using social media to become known "virtually" in the desired circles, speaking at client events, volunteering on charity boards alongside potential clients, and much more.  There are opportunities for lawyers of all personality styles to successfully generate visibility.

Rainmaking is not the same as asking for the business.  There are countless sales books on closing techniques, most of which are helpful when you've run out of kindling for your fireplace or lighter fluid for your charcoal grill.  But as guides to successful professional tactics to win business, most do more damage than good.  When's the last time you, as a consumer of goods and services, felt great about a purchase in which you were manipulated to buy something you didn't need, or paid a price greater than necessary?  Closing techniques are about manipulation, but successful consultative selling is about matching the benefits of your offering to a client's stated needs.  If your lawyers are meeting a lot of prospective clients but not winning new engagements, it's likely they need work on asking questions to better understand needs, not making clever statements to entice the prospect to buy.

Rainmaking is not the same as discounting.  In every sales organization, there's always a sales manager or executive we call the "hero."  She's the one that demands all of her salespeople remain firm on price but when a sale has to be made, often at the end of the month or the quarter, she will offer the brilliant insight that only a seasoned manager of special talents has, and promise a steep discount to close the deal.  These heroes are toxic.  The salespeople aren't allowed to use the same tactics and the clients know it, so savvy clients have the patience to wait until the hero is called in.  Law firms that employ undisciplined discounting to win work erode profitability and create internal price pressure because clients accustomed to discounts from practice A will demand it from practice B.  If your primary tactic to win work is lowering the price, then your rates are either too high to start or you haven't demonstrated sufficient value to the client to justify your expense.  Organizations that don't perpetually rely on discounts focus on quantifying the cost to the client of not acting, and quantifying the benefits of a favorable outcome, and quantifying the value the firm can bring in delivering the desired outcome.

Rainmaking is not the same as growing top line revenue.  Whether it's winning new engagements or recruiting laterals with a portable book of business, many law firms focus on new revenue.  As the old saying goes, all revenue is good revenue.  But like many old things -- eight-track tape players and wooden skis come to mind -- we should stop using it.  What this approach ignores is the cost of sales.  Any analysis of law firm finances demonstrates that it's far more efficient, and far more likely, to cross-sell services to existing clients than to sell new services to new clients.  Yet most firms put far more time and energy into selling services to new clients while ignoring effective methods to delight and retain existing clients.  And no matter how many times we hear that clients treasure law firms that provide predictability, we fail to make the connection that excellent lawyers who rely on deep subject matter expertise to manage legal projects tightly are as critical to retention (and revenue) as those who bring in new engagements.

Rainmaking is not the same as generating profit.  Too often firms focus on top line revenue without regard to the cost of delivery.  If I can earn $5 million in new fees, but it takes $6 million to deliver the legal work, this is obviously a bad idea -- yet many jump at the opportunity, presumably under the delusion that what they lack in profit potential they can make up with poor math skills.  Even if I can deliver the legal work for $4.5M and generate $0.5 million in profit, it may still be a bad idea if those same resources devoted elsewhere could have delivered $1 million in profit.  Managing legal projects profitably has as much (if not more) to do with service delivery than rates.  If the client will only pay $1 million for legal services that once generated $2 million in fees, the savvy firms find ways to lower the cost of delivery so as to turn a profit at the lower fee level.  The clueless firms continue to hunt for dumb clients willing to pay double the market value, possibly by coercing them through clever closing techniques.

Managing a modern law firm is challenging, just as making the playoffs is difficult for a basketball team in a competitive league.  Those basketball teams that identify the various skills of their players and combine them together in unique ways to maximize strengths, minimize weaknesses, and exploit opportunities presented by competitors, tend to win more games and championships than those teams who believe recruiting top scorers is the key ingredient for success.  Law firms must also recognize that rainmaking isn't about clever closing techniques or finding that elusive client willing to pay far more than anyone else for a service.  It's about maximizing all of the firm's resources to find, win, and keep clients, and this requires everyone to contribute.  And while many contributions won't appear on the stat sheet after the game, champions know that it takes the entire team to win.

Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, click here or contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.