Origination Credit and Cross-Selling Legal Services

Transcription

1 Origination Credit and Cross-Selling Legal Services FEATURED FACULTY: Martha Cusick Eddy, Director, NCG Strategic Marketing Kimberly Alford Rice, Principal/Business Development Advisor, KLA Marketing Associates Joel A. Rose, Certified Management Consultant and President, Joel A. Rose & Associates, Inc

2 Speaker Info Martha Cusick Eddy, Director, NCG Strategic Marketing Martha helps companies build sustainable customer/client relationships and carve out defensible market positions that offer long-term competitive advantages. In her 20 year career, Martha has worked with architects, accountants and lawyers to research and define their markets, identify powerful market and sales positions, and create sales and marketing initiatives that achieve results. In addition to her work with NCG Strategic Marketing, Martha is the Founder and Managing Director of Market Advisory Partners. With a background in market research, Martha can capture client and customer requirements, needs and wants and translate those into sales and marketing strategies that build business. Martha has worked with many market leading firms in professional services, including Hogan & Hartson, Brownstein Hyatt Farber Schreck, BBC Research & Consulting and RNL Design. Active in the community, Martha currently serves on the Downtown Denver Partnership s Marketing Advisory Council, an invitation-only position, and is a member of the DDP s membership committee. Additionally, she was president of the American Marketing Association, Colorado Chapter, and the Rocky Mountain Legal Marketing Association. In 2003, she was named to the Denver Business Journal s prestigious 40 Under Forty class. She is a U.S. patent holder and Law Week Colorado named her the top marketing expert to build your career in Kimberly Alford Rice, Principal/Business Development Advisor, KLA Marketing Associates Kimberly Alford Rice provides strategic marketing and business development services to help lawyers generate greater revenue with higher quality clients. Through focused business development skills training and one-on-one coaching programs, Kimberly collaborates with law firms and hundreds of lawyers to guide and assist them in building, growing, and sustaining a healthy client base and educates them on how to exceed clients expectations and increase revenues. For over 18 years, Kimberly served on and for senior management teams with three corporate law firms in the metro Philadelphia area where she led strategic marketing programs to develop and execute firm-wide marketing plans including individual attorney marketing planning; associate and practice development training programs; firm brand strategy/execution, and other strategic initiatives. Sometimes serving as an on-call or virtual marketing director, Kimberly has built comprehensive, integrated communication programs to produce measurable response and results for her professional services clients. She effectively works with all levels of an organization to bring an institutional awareness and understanding of strategic business development, marketing, and client service principals to enhance the efficacy of a firm s operations, increase clients satisfaction, and generate greater revenue. Among her professional activities, Kimberly serves as Editor-in-Chief of ALM s monthly Marketing the Law Firm publication, is a member of the international Legal Marketing

3 Association and serves on the Board of Directors of its Metro Philadelphia chapter. She is a member of the ABA and its Law Practice Management Section as well as the Delaware Valley Law Firm Marketing Group. In addition, Kimberly is a member of the Philadelphia Bar Association (Law Practice Management Section) and is Chair of Camden County Bar Association s Law Practice Management Committee. In other business activities, Kimberly is a member of the Camden County Regional Chamber of Commerce and ewomen Network. Joel A. Rose, Certified Management Consultant and President, Joel A. Rose & Associates, Inc. Joel A. Rose is a Certified Management Consultant and President of Joel A. Rose & Associates, Inc., management consultants to the legal profession. The firm, national in scope, is headquartered in Cherry Hill, New Jersey. Mr. Rose received a B.S. from New York University and an M.B.A. from the Wharton Graduate School of Business, University of Pennsylvania. He has extensive experience consulting with private law firms, corporate law departments and government agencies. Mr. Rose performs and directs consulting assignments in law firm management and organization, strategic and financial planning, lawyer compensation, the feasibility of mergers and acquisitions and marketing of legal services. He has extensive experience planning and conducting retreats and special expertise resolving problems among and between lawyers. Mr. Rose is a guest columnist on law office management and economics for the New York Law Journal and has had numerous articles published in the Philadelphia Legal Intelligencer, the Pennsylvania Law Weekly, the New Jersey Law Journal, The Law Firm, Inc., chapter publications of the Association of Legal Administrators and other state and local bar association journals. Mr. Rose is a contributing author of the book, Model Partnership Agreements for New York Law Firms, published by the New York State Bar Association and of the monograph The Quality Pursuit, Assuring Standards in the Practice of Law, published by the American Bar Association. Mr. Rose is on the Board of Editors of Accounting and Financial Planning for Law Firms and Law Firm Partnership and Benefits Report. He Chairs the Finance and Management Subcommittee of the Law Practice Management Section of the New York State Bar Association and the Continuing Legal Education Committee of the New York State Bar Association. Mr. Rose is a member of the Law Practice Committee of the American Bar Association and the coordinator and moderator of the Annual Conference & Workshops on Law Firm Management & Economics.

4 **Certificates of attendance and CEUs, when available, must be requested through the online evaluation.** Evaluation for Live Event: We d like to hear what you thought about the audio conference. Please take a moment to fill in the survey located here: Requests for continuing education credits and certificates of attendance must be submitted within 10 days of the live event. Evaluation for CD Recording: Please use the following link to submit your evaluation of the recorded event: Please note: All links are case sensitive CLE: C4CM provides audio conference attendees with CLE credit processing services. To expedite C4CM processing your CLE request, please complete and submit the evaluation form available from C4CM at the conclusion of the audio conference. It will be necessary to enter the following information: name of each attorney requesting CLEs with full contact information, including address, bar number, and the state in which the attorney wants credits. Each attorney requesting credits must submit an evaluation. Please be advised C4CM audio conferences are subject to approval from each CLE issuing organization and approval is not guaranteed (state bar associations in Delaware, Indiana, Kansas, Ohio, and Pennsylvania do not grant CLE credits for audio conferences). The approval process takes approximately 6-8 weeks for most organizations but can take as long as 3-4 months. You will be notified via with the final status of your CLE application. Any person applying for CLE credits must attend the audio conference from start to finish (attendance will be taken for compliance reasons). Requests for CLE credits must be received no later than two weeks following the conclusion of the audio conference or live conference. CLE credits are not available for CD recordings. If you have any questions regarding CLE credits, contact Jill Adler at x 21 or jill.adler@meeting-matters.com.

5 Welcome to today s program: ORIGINATION CREDIT AND CROSS-SELLING LEGAL SERVICES Brought to you by CCM, KLA Marketing Associates, Joel A. Rose & Associates and Market Advisory Partners ORIGINATION CREDIT AND CROSS-SELLING LEGAL SERVICES Kimberly Alford Rice, Principal KLA Marketing Associates - Cherry Hill, New Jersey Joel A. Rose, President Joel A. Rose & Associates, Inc.- Cherry Hill, New Jersey Martha Cusick Eddy, Managing Director Market Advisory Partners - Denver, Colorado 1

6 Kimberly Alford Rice For over two decades, Kimberly Alford Rice has been providing strategic marketing and business development services to help lawyers generate greater revenue with higher quality clients. Through focused business development skills training and one-on-one coaching programs, Kimberly collaborates with law firms and hundreds of lawyers to guide and assist them in building, growing, and sustaining a healthy client base and educates them on how to exceed clients expectation and attract market share. Bringing decades of experience as a legal marketer, strategist, organizational development specialist, project manager, and entrepreneur to bear on behalf of her clients, Kimberly provides practical solutions for lawyers most challenging business development issues. She serves as Editor-in-Chief of ALM s monthly Marketing the Law Firm publication, is a member of the international Legal Marketing Association and serves on the Board of Directors of its Metro Philadelphia chapter. She is a member of the ABA (Law Practice Management Section), the Philadelphia Bar Association (Law Practice Management Section) and is Chair of Camden County Bar Association s Law Practice Management Committee. She is a frequent author and speaker to business, legal and community groups on a wide array of legal marketing-related topics. What is Cross Selling Sales technique whereby complementary services are presented to a client after the client has demonstrated a desire and willingness to purchase a particular service. Strategy of introducing new services to existing clients based on their past purchases. Designed to broaden the client's reliance on the firm and decrease the likelihood of the client moving to a competitor. 2

7 Cross Selling Inhibitors Lack of Communication and Internal Knowledge Isolation between practice groups Limited communication in and among practice groups No institutional mechanism to educate firm s full capabilities. Cross Selling Inhibitors Lack of Management Leadership Unclear direction and communicated expectations to firm lawyers. Compensation structure which rewards originations most heavily. Lack of practice group leader authority and delegation. 3

8 Cross Selling Inhibitors Poor Internal Selling Short circuiting relationship-building process among attorneys. Lack of trust and confidence among colleagues. Relationship hoarding. Cross Selling Inhibitors Ineffective Selling Approach with Clients Being too me-focused instead of clientfocused. Neglecting to thoroughly understand clients business and needs. Ineffective listening skills. 4

9 Cross Selling Inhibitors Lack of Strategy Not looking for cross-selling opportunities. Overlooking cross-selling opportunities. Lack of measurement. Lack of incentives. Cross Selling Inhibitors Other Issues Insufficient client awareness. Client-specific selection practices. Lawyers not knowing or understanding business triggers for the need for their own services and those of their partners. Clients want and need to make a difference in business circumstances that are now disadvantageous. 5

10 Cross-Selling Successfully Take time to know firm s full range of services. Take steps to improve and institutionalize communications among attorneys. Establish client teams and industry groups. Communicate with clients around their business interests, concerns and needs. Take proactive steps to actively listen to clients. Cross-Selling Successfully Actively promote services to firm attorneys. Make it a team effort by sharing credit and rewarding cross selling. 6

11 Martha Cusick Eddy Worked with more than 100 law firms Market Advisory Partners provides: Strategic planning Marketing planning Business development coaching/training Marketing communications Internet marketing, including web sites, social media strategies Community investment strategies Director of Marketing/Communications, Brownstein Hyatt Farber Schreck, Director of Regional Marketing, Americas, Hogan & Hartson (now HoganLovells), President, American Marketing Association, Colorado Chapter, President, Legal Marketing Association, Rocky Mountain Chapter People s Choice, Best Legal Marketing Firm, Law Week Colorado M.A., University of Wisconsin, Madison Obstacles to Cross-Selling 1. Not Enough Time 2. Lack of Awareness 3. Fear 4. Loathing 5. No Trust 6. Where s the Compensation? 7

12 Why Cross-Selling Matters The benefits to the firm of cross-selling: Reduced cost of new business acquisition Shorter sales cycles Institutionalized clients protected from lawyer free agency Increased competitiveness Stronger firm cultures/enhanced resiliency Increased firm morale Unique Challenges for Marketers Compensation historically difficult for inhouse marketers to change Requires seat at the table Typically long-term process does firm have the internal will to overhaul the system? Some marketers charged with improving cross-selling but lack authority to create infrastructure for success 8

13 Non-Financial Compensation Be Creative Non-financial incentives to create success Internal awards programs In-firm recognition Contests Compete for gift cards, other prizes Company perks use of a company car, weekend at a resort Make it FUN! Examples from the Field Big Time Business Developer Awards Parties for top business developers Client appreciation events Business Development benefits/programs designed exclusively for team players Alternative Strategies 1 Rebrand Cross-Selling Sales in cross-selling raises fear, loathing in lawyers Rebrand as cross-introductions emphasize sharing of contacts and networks to build the foundation for crossselling 9

14 Alternative Strategies 2 Invest in the Willing Avoid big, all-firm programs that require engagement from all lawyers Big firm programs breed skepticism and bring out the naysayers Find groups within the firm who can be flexible about origination, are interested in long-term practice growth Alternative Strategies 3 Start Small Assemble small groups of early adopters Build successes Build your case for cross-selling Bring along the rest of the firm slowly 10

15 Keys to Success Keys to Cross-Selling Success Start small Right people on the right bus going the right direction Keep it simple Re-brand Invest in the willing Sell it to the firm through proven successes Joel A. Rose Joel A. Rose is a Certified Management Consultant and President of Joel A. Rose & Associates, Inc., Management Consultants to Law Offices, Cherry Hill, New Jersey. Mr. Rose received a B.S. from New York University and an M.B.A. from the Wharton Graduate School of Business, University of Pennsylvania. He has extensive experience consulting with private law firms. Mr. Rose performs and directs consulting assignments in law firm management and organization, strategic and financial planning, lawyer compensation, the feasibility of mergers and acquisitions and marketing of legal services. He has extensive experience planning and conducting retreats and special expertise resolving problems among and between lawyers. 11

16 A Well-Conceived and Administered Partner Compensation System Should: o Reward partners for their total contribution to the firm; and o Serve as a management tool to motivate them to perform those fee producing and non-billable activities to progress the firm. Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey The effects of the depressed economy have caused Managing Partners in many firms to re-think how to motivate and reward partners for their total contributions. Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey 12

17 o Going forward, where does marketing fit into firm s Compensation System? ~It has been my experience, that almost without exception, compensation and behavior, go hand-in-hand. Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey Essentially, you get what you pay for: ~For the continued financial and professional success of the firm, it is critical that Managing Partners re-examine their firm s compensation system. Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey 13

18 What Drives Compensation? o Compensation rewards o Compensation creates the direction of the firm o Tensions develop when the direction of the compensation system is unclear or only gets lip service Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey o Ideally, everyone has a role in marketing and cross-selling the firm s expertise and should be compensated based on how he/she performs. o To get maximum value from tying personal goals to marketing goals and ultimately to compensation firm management must: Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey 14

19 Know the people in their practice groups; Accept and support the idea of people doing what they do best; Be flexible enough to work with individual partners; Have a good sense of what their groups should accomplish; Discuss with individuals their specific focus; and Be involved in the compensation process Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey Partners agree on a minimum acceptable contribution. This often includes a customized model of performance (see Exhibit A). Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey 15

20 Discussion about Origination of Business o Origination of clients is of major importance in assessing compensation; although there must be adequate recognition of retention and expansion of existing client relationships. Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey o Allocation of credits to partners for originating business from a new client, proliferating work from existing clients, managing work originated by others, etc. ~ Client Origination ~ Client Maintenance ~ Matter proliferation ~ Responsible partner ~ Production partner ~ Other Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey 16

21 Changes in Origination Credit Examples o o If a client leaves the firm and another partner brings that client back. One partner brings in a client but after a period of years it is another partner who has been managing that client and is responsible for maintaining the relationship. Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey Permanency of Origination vs. a Sunset Rule o Lifetime origination o Origination for a defined period of time only Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey 17

22 Need tracking system that tracks new business development by each attorney How to allocate credit for new business/crossselling Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey Discussion About Delegation of Work to Others (An important consideration if origination credit is to be a factor in marketing and cross-selling the firm s expertise) Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey 18

23 If origination credit is involved, and is properly rewarded, the partner will be less likely to abide by the eat what you kill principle. If billable hours are a substantial measure of performance, delegation is less likely to occur, except when more working time is just not possible/practical. If billable hours billed and collected are utilized, it is a fairer and more significant basis for reward and is probably more likely to lead to delegation. Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey Major Types of Compensation Systems Parity Arrangements Lock-Step Systems Objective Formula System Subjective Systems Combination Systems Many firms use a combination of the above with success Joel A. Rose & Associates, Inc. Cherry Hill, New Jersey 19

24 ~EXHIBIT A~ PARTNERS PERSONAL PERFORMANCE PLAN I. Introduction Draft your personal performance plan using hours available for both billable and non-billable hours. Each partner is expected to work at least hours, with at least being billed and collected at standard rates. This allows hours for approved nonbillable projects. Exceptions may be granted for management, special projects, and special arrangements for certain partners. Comments: The total hours represent what we expect as minimum contributions from every partner. Billable hours represent what we expect as minimum contributions from every partner. If you propose any exceptions (up or down), please explain on the form or on an addendum to the form. Do not use unreasonably high or low billable hours on the form. Remember: We will use this as a standard to determine who is extraordinary. II. Personal Production Anticipated Productivity: Please list the number of billable hours you re expect to work this year and the dollars you expect to collect: A. Billable hours monthly Annually B. Dollars to be collected monthly Annually C. In which practice areas do you expect to work? Please list them as well as the appropriate percentage of time you anticipate spending in each area. D. Do you expect to generate any income by non-hourly billing? If so, explain: E. Non-billable hours Monthly Annually Management Marketing/Business Development Professional Development Pro Bono 20

25 III. Client Development In the margin next to each activity listed below, note the approximate time commitment (in hours) you expect to devote to the activity during the year. A. Describe how you obtained additional business from existing clients this year. What are your plans for the coming year? B. Describe how you targeted prospects this year. What are your plans for the coming year? C. Describe your participation in speaking or writing last year and your plans for the coming year (please list target forums and possible topics for articles). D. Describe your activities in community, professional, and civic groups over the past year and the activities you plan this year. How do you plan to use your memberships in those groups for client development? E. Describe other marketing activities you conducted last year and your plans for the coming year. F. I would expect my total Business Development time to be divided as follows: 1. Personal contacts with existing/previous clients 2. Personal contacts with prospective clients 3. Speaking engagements 4. Writing articles 5. Participation in professional, trade, other associations 6. Other: Total annual marketing hours: 21

26 IV. Teamwork A. How were you successful/not successful in introducing your clients to other lawyers and what changes do you plan to make in the coming year (list clients and lawyers)? B. How were you successful/not successful in distributing work to other lawyers and what changes do you plan to make in the coming year (list the types of work and the lawyers)? C. How were you successful/not successful in turning over client management to other lawyers and what changes do you plan to make in the coming year (list the clients and lawyers)? V. Quality Control A. Describe areas where you perceive weaknesses in work product quality in your practice group or the firm. How could you help to improve these weaknesses? B. Describe areas where you perceive weaknesses in client service quality and any plans you have to improve these weaknesses. 22

27 VI. Professional Development A. Describe any specific professional goals you have such as Bar Association and related activities. B. Describe any legal education that you feel you need to increase your expertise in the areas in which you now practice, how it will benefit the firm, where you will go to obtain it and its approximate cost. C. Describe any legal education that would enable you to obtain expertise in an area in which you do not presently practice, how it will benefit the firm, where you will go to get it and its approximate cost. D. If there are ways that you could assist in the legal education of others by in hours seminars or by a formal mentoring program to train other lawyers and paralegals, outline your proposal and how it would benefit the firm. VII. Pro Bono A. Identify any pro bono activities and the nature and extent of your involvement. B. If there is any business that has come from your pro bono work in the past two years, please describe. 23

28 VIII. Management A. List the management activities in which you plan to be involved and the approximate time commitment for each. 1. Executive Committee 2. Compensation Committee 3. Section Chair 4. Recruiting Committee 5. Other: Total annual management hours: B. What did you accomplish last year while involved in these activities? What specific goals for your participation do you have for the coming year? IX. Please describe your weaknesses that are recognized by you or perceived by others. A. What are your plans to improve or eliminate them in the coming year? B. With all of these criteria appropriately measured and considered, fair-minded partners should be able to agree upon the compensation of each partner. 24

29 ~ EXHIBIT B ~ COMPENSATION CRITERIA Client development Generation of new clients. Retention and expansion of existing clients. Cross-selling. Total firm commitment and production. Income generated by hours worked and through other lawyers. Value of time worked and delegated to others. Professional and community activities. -Speaking and publishing -Participating in bar activities -Assuming bar and community leadership positions -Developing good relationships with judges and other lawyers Original contributions -Generating original thoughts, projects, and programs useful to the firm. Practice management Participation in the team concept -Delegating work and client management horizontally and vertically to appropriate level. -Contributing to the equitable and efficient distribution of work assignments. -Introducing clients to other lawyers. -Participating in practice group and marketing activities. -Putting in extra time to handle workload surges. Willingness to specialize and develop additional expertise. Awareness of trends in practice to focus individual practice as needed. 25

30 Participation in training. Delegating work and supervising younger lawyers. Technical proficiency and quality. -Working diligently, competently, and getting assignments done on time. -Knowing applicable law and being able to apply it. -Exercising good judgment and being able to handle the unexpected. -Having the ability to plan and implement legal strategies and ability to negotiate. -Communicating effectively, orally and in writing. Quality service -Meeting or exceeding clients expectations -Understanding clients businesses and needs Willingness to follow firm policies -Keeping time accurately and turning in time sheets promptly -Complying with work intake guidelines -Billing at standard rates or higher -Avoiding large accumulations or work in process and collecting receivables diligently -Generating fees in excess of standard rates. 26

31 Firm management and leadership Contributions to firm management. Treatment of firm management with same importance as client work. Willingness to become more involved in management as standing in firm increases. Traits that enhance overall firm harmony and productivity. Encouraging people to work productively and creatively. Being loyal and dedicated to client and firm objectives. Willingness to develop sound working relationships with all firm members -Respecting each lawyer s professional and management judgments and good faith. -Respecting others contrasting views in a posture of respect for other people. -Supporting firm s objectives and treating clients as firm assets rather than as personal possessions. -Attending firm social and professional meetings. -Participating in firm management decisions that fall upon owners. -Participating in active recruitment of lawyers. 27

32 Seniority Consistency of a lawyer s value to the firm over time - not age alone Objective Data Billable hours Billings Collections Aged accounts receivable Aged work-in-process Realization rate Nonbillable hours by approved categories Q & A Questions 28

33 Thank you for attending today s program! 29