YOU ARE ONLY YOUNG ONCE: Business Development for the Associate Lawyer

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1 ABA Section of Litigation Joint Committees CLE Seminar, January 19-21, 2012 You're Only Young Once: The Do's and Don'ts of Developing Business as a "Young Lawyer" YOU ARE ONLY YOUNG ONCE: Business Development for the Associate Lawyer By Sharla J. Frost, Managing Partner Powers & Frost, L.L.P. Houston, Texas sfrost@powersfrost.com Congratulations. You are a newly minted (or recently minted) lawyer. You have a license, an overwhelming set of substantive assignments, an inflexible requirement for documenting your time, expenses and CLE requirements. However, you are doing an excellent job of balancing each and every one of those tasks. Just as you realize that you are in fact Master of the Universe (the male pronoun working better for the gender non-specific aspects of this description) your supervising partner advises you that you must present the management committee with a detailed outline of your business development plan for the next twelve months and an analysis of the anticipated profit percentage attributable to those clients whom you will generate as part of your business development program. What? Business development? That was not a portion of your law school curriculum. You clearly recall that the social contract explained that as an associate you were to give best efforts and all your waking hours to handle legal matters for clients who had been provided to you by the firm. There was no provision requiring you to do the work and provide the clients. Alas, that particular version of the social contract expired sometime in the 1980s or possibly early 1990s. Legal practice today requires that every lawyer in the firm engage in business development in order to provide the firm with sufficient business opportunities to support the firm's practice. The consolidation of business organizations has resulted in fewer clients; the 1

2 proliferation of lawyers has resulted in more competitors; and, the practice of law has become more of a business. All of those factors combine to make business development, or marketing as it is also known, the additional job of all lawyers, including you. The good news includes that you are young and enthusiastic. You possess the capacity to develop a plan and a habit of developing business as a routine part of your legal practice. Unlike generations of lawyers who preceded you, the concept of self-sufficiency and business necessity exists for you as an organic part of your legal existence. Much like social scientists note that today's toddlers will be able to use computers and technology as a natural part of their lives, you will have inherent skills that your predecessors had to struggle to develop. Consider Associate Business Development to be the legal professions' equivalent of Facebook. That was the good news. Whether the remainder of the news is good or not depends on you. As with the rest of your legal career, the business development aspect of you practice depends on your level of commitment, hard work and the usual smidgen of luck. Thomas Edison said that the harder he worked, the luckier he got. You will likely find the same to be true as you become more skilled at the professional aspects of business development for your legal practice. Now, how do you proceed to integrate the business of client development into your natural process? And, how do you balance the time demands associated arising from your substantive work, your outside the office life and the additional time demands associated with having to also assist in generating the work that you and others in the firm will perform? There exist no magic answers to either the time management issue or to the mechanisms of finding clients. Like the other facts of your practice, however, application of rules, procedures and timelines will help you incorporate business development into your ordinary routine, minimizing the stress of the assignment and maximizing the return on the time investment. I suggest a multi-part approach to this aspect of your practice. And, I strongly suggest you treat business development as an aspect of your legal practice. The time has passed when the task of business development resided only in the head partner's office. Every lawyer in every firm needs to share the burden of keeping the practice going. How, then, can you play your part in that assignment? Step One: Develop a Business Development Plan Just as you would develop a litigation outline for a trial, you need to develop an outline or plan for the process of developing work and clients. As with all such overviews, you should consider your written plan to be a living document. As your skill level changes, as your focus changes, as interests evolve, your outline should be revised and changed. The outline does not have to be sophisticated. Herb Kelleher, the flamboyant and famously successful co-founder of Southwest Airlines, explained that the initial business plan for his airline consisted of the words "Dallas, Houston, San Antonio" written on a cocktail napkin and connected by a triangle. You do, however, need to give thought to what you would like to accomplish and memorialize your goals. Doing so has the psychological effect of giving a tangible form to your thoughts and a written embodiment of your plan. The internet is replete with forms that you can use as a 2

3 starting point for your personal outline. The ABA has a significant library of reference materials and resources available to assist with the paperwork portion of the plan. Whatever format you use, you need to first evaluate what your preferred practice would include: what area of law are you interested in? what type of clients do you anticipate representing? what skills do you have to provide to a prospective client? what skills do you have for obtaining work? Once you have determined the answers to those ephemeral types of questions, you can then begin the process of outlining your plan for fulfilling those goals. Step Two: Develop a Business Development Schedule (Time Management) Lawyers are trained to manage their time and cases to comply with calendar deadlines and schedules. You should apply those same skills to the management of your business development project. Sara Holtz, a noted marketing coach and active member of the ABA's Women Rainmaker's, says that there should be "no random acts of marketing." Business development activities need both a financial and a calendar budget. You should determine the amount of time you can commit to the various aspects of business development and put those tasks on the schedule. Those activities cover more than just the time spent face-to-face with individual contacts. You should keep track of the time you and your assistant spend researching information about your existing and potential clients. If you spend time reading literature related to either the substance of the conduct of your clients' business, you should track that as you would time spent researching legal issues. Unless you have a record of the time spent, you will have not have a way to quantify the time you are spending on the project. You can better manage your time if you determine how much time you can commit to tasks designed to expand your client or assignment list. Planning to take a client to lunch one a month is one thing. Putting it on the calendar, getting it scheduled, then following through is entirely another. Your calendar fills quickly. If you have space built in to your calendar for such events, you will be more likely to do them on a regular basis. Lawyers tend to accomplish those things that are on the calendar. Put your tasks on the calendar and make sure that you accomplish those things that are on the schedule. Remember, too, that there are some aspects of your business development tasks that can be delegated to your assistant, assuming that you are fortunate enough to have one. Your contact database should always be up to date, for example. While you are the one who must obtain the information necessary to do that, the actual input of the data can be accomplished by someone else. Similarly, your marketing packet should always be up to date, including any new or important accomplishments on your part. That, too, can be handled by the firm's marketing department, if you are with a large firm, or your assistant, if you are at a smaller one. Determine those tasks in your business plan that can be handled by others so that you can maximize the effect of the time you spend. For an excellent text on delegation and time management, read If You Want It Done Right, You Don't Have To Do It Yourself: The Power of Effective Delegation by Donna Genet (Quill Driver Books 2003). Whether you follow her advice or not, application of her concepts will assist you in balancing the demands of your substantive legal assignments with the business assignment of obtaining clients. Step Three: Develop a Business Development Team 3

4 Just like having an exercise partner makes it harder to skip your workout routine, having a partner or buddy to coordinate business development tasks makes it less likely you will "forget" to complete those tasks when you get into a time crunch or when you have the business development equivalent of writer's block. Your "Marketing Buddy" may appropriately be someone else at your level with whom you can brain storm, conspire, plan or cry, depending on how the process is going. However, you need more than the marketing equivalent of a drinking chum; you need to find additional team members who can provide support, guidance and insight. If possible, identify and align yourself with a more senior lawyer who can mentor you on business development. That may or may not be the supervising lawyer who mentors you on developing your skills in the substantive law. While the phrase "it takes a village" has become a tag-line for late night comedy routines, the concept still has validity. The mentor who is able to teach you the intricacies of the insurance code may or may not be the person who can coach you on the finer points of client entertainment. Your business development mentor may not necessarily be a lawyer you work with. He or she may not necessarily be a lawyer. Marketing professionals serve as coaches for many members of the legal profession. You may not be able to afford an outside coach as a young associate, but your firm may have someone on staff who can provide professional support for your business development activities. Remember that your marketing department or your personal assistant can be invaluable members of your business development team. Not only does effective time management militate towards use of their time to assist you with your efforts, simple logic makes the assistant your most valuable team member. Your assistant knows your schedule, your strengths and your accomplishments. He or she can help you research information on potential new clients, ensure that you follow through on information to be provided to colleagues and help you track the materials that you have sent or need to send to clients and contacts. If time permits, you can train your assistant to help you identify potential clients from publicly available materials, then assist you with the arrangements necessary to get an appointment with the appropriate person at the company. Use the resources you have: the best available one is the one already vested in your success your trusty personal assistant. Step Four: Develop a Business Development Goal We are all familiar with short, medium and long term goals. You should use that framework for identifying your goals for business development. Those goals can be specific: "I want one new client in the next 30 days." They may be more amorphous: "I would eventually like to national counsel for a Fortune 500 Company with national litigation involving manufacturing of widgets." If you are a new lawyer, your goals need to be both temporal and realistic. A Fortune 500 company is not going to hire a first year lawyer as national counsel; however, if that is your ultimate goal, you can begin to build the skills and connections that make it possible for you to achieve that goal later in your career. More tangible short and medium term goals provide a framework for realistic accomplishments. Consider, for example, that you determine that lawyers hired to represent a particular client have a track record of publishing and speaking on substantive issues. Your short term goal might be 4

5 to publish an article in the ABA Journal or in a specialty journal within the next six months and to obtain a speaking engagement at a regional or national seminar within the next year. In connection with those tasks, you should provide a copy of the published paper to your existing clients and make sure that a copy of the seminar brochure is sent by the organizing group to those corporations or other entities that you would ultimately like to have as a client. Step Five: Educate Yourself on Your Client s Business Lawyers no longer have the luxury of relying on someone else to provide the work that forms the basis of his or her practice. Clients view legal services as fungible commodities that can be handled by any number of interchangeable lawyers. In order to ensure that you have a continuing level of work, you must find a mechanism for reaching out to existing and potential clients. Just as you keep yourself abreast of legal developments, make a habit of reading business and marketing literature to understand the ways in which your clients operate their business. The better you understand their business model and the way in which they make decisions, the better you can assist them when they have legal needs. From a litigation perspective, you need to understand the risk management models and risk tolerances for each of your clients. Sophisticated clients have sophisticated obligations to their constituencies, which include shareholders, lenders, insurers and others. For you to assist them in properly managing their risks, you have to understand their needs. Add the Harvard Business Journal to your required reading list. You don't have to read it cover to cover each month, but it will give you insight into the best and most current thinking in the business world. If your practice is focused on a particular segment of the business world, find out what publication constitutes "required" reading for your clients. Add that publication (or those publications) to your list, as well. Not only will you have insight into the business issues facing your client(s), but it will also provide you a common framework for discussion. The more you know about your client's business--both specific and generally--the better you can help them. In-house counsel consistently complain about lawyers' failure to understand the business of the corporation they wish to represent. At a recent seminar, one of the speakers posed the question: "Why would I trust a piece of legal work to a lawyer who did not even research my company to figure out what we do?" The internet provides a free, almost endless source of information about companies and the business they do. Read the Annual Report from the company for each of the past five years; read the 10Q to determine what types of litigation issues the company faces; read the blogs (both for and against) the company you are interested in representing. The more you know the more valuable you can be as a business advisor. Step Six: Develop a Business Development Habit Make the business of developing business part of your regular practice. As with all things, the process becomes easier if it is a habit. Each day should include some task that is designed to contribute to your overall business development or marketing plan. The task may be as simple as sending a one-line to an old college friend who is now a business executive or it may be as time-consuming as taking a new acquaintance to lunch to discuss his or her legal needs. Different people approach the process differently; however, the successful rainmakers all have one thing in common: they continually work at developing work. 5

6 You may find that one day a week works best for you as your marketing day. On that day, you take someone to lunch or dinner; you write a series of letters to old friends and clients; you review marketing literature to find the best way to accomplish the task of promoting yourself and your firm. Daily or weekly works best for most people. Any less frequently, the tasks become too overwhelming and the time demands become too significant in the midst of all the other tasks that have to be done. Spread over a week, three or four hours of time does not seem oppressive. Concentrated in one day of a month, twelve or sixteen hours are overwhelming. Step Six: Understand the Business Development Rules The rules of ethics apply to business development, just like they apply to your legal practice. Each jurisdiction has slightly different regulations on legal advertising, contact with potential clients and the use of "marketing materials." Before you send out any written materials, you should confirm that they comply with your state's regulations on legal marketing. If you have a website, chances are that your state bar has a committee that must approve the format and content. Be sure that you go through the necessary process to obtain approval for that site. Assuming that you are at a law firm, that will likely have been done; however, if you are a solo practitioner, or the member of a small firm, you need to confirm that all necessary approvals have been obtained before you begin to provide the website information to the outside world. Hard copy materials, such as brochures, may also require approval of your state bar association. You need to obtain the appropriate permission to publish the materials if your state bar has that requirement. If you are sending materials to a potential client in another jurisdiction, you should confirm that the materials comply with both your state's rules and those of the state in which the recipient is located. In addition to the rules of legal ethics, most sophisticated business organizations have rules governing how vendors (and they consider you to be a vendor, by the way) may interact with employees in the process of soliciting business. While the business lunch is a time honored institution in the eyes of the legal community, many corporations and governmental entities forbid their employees from accepting a free lunch provided by an existing or potential vendor. Likewise, during the holiday season, many corporations mandate that personal gifts either have to be returned or donated to a specified charity. You can save yourself and your client contact a great deal of potential embarrassment by finding out the company's business solicitation policies before you engage in activities that may run afoul of the guidelines. Also, keep in mind that there are legal limits (i.e. IRS tax rules) on the deductibility of business expenses and the provision of gifts to clients or potential clients. You should talk to your firm's accounting department and marketing department before you spend the firm's money on client entertainment or gifts. Understanding the tax implications of various activities may not seem all that relevant to you now, but remember that maximizing every dollar is in your best interest. Long term, those dollars might belong to you. Further, understanding the tax implications of business expenses simply makes good business sense. 6

7 Finally, understand your firm's policy concerning approval and reimbursement of business development expenses. Most firms impose a budget on their lawyers in connection with business development. You want to ensure that you use the dollars wisely and for the maximum impact. You also want to ensure that you get reimbursed for the use of the money that is allotted to your marketing budget. Knowing the firm s policy on what can and cannot be reimbursed may save you from a very expensive lesson on what is not acceptable. Conclusion In the practice of law, clients equal control and control constitutes freedom. You have it within your power to accomplish both, but you will have to apply the same legal skills to your business development tasks that you already apply to your substantive legal ones. The most certain way for you to obtain control of your life and your work-life balance is to be the person in control of the clients whose work you perform. In order to do that, you have to find the best process for your personal manner of developing business. Once the process becomes a natural part of your legal practice, your confidence and competence will improve. You are only young once, but you can be successful for a very long time. Go forth and market! 7