Rafte & Company Blog

Building a law firm or professional services firm often depends on relationships, and the rules of professional ethics dictate how those relationships can develop. Traditionally, the process of getting new clients has been a bit similar to a courtship, and law firms, in particular have customarily waited for the phone to ring.

Meetings would follow during which the firm and the client would get to know each other's businesses and decide whether working together would be a good fit.

A convergence of market dynamics is changing this, however, and Rafte & Company can help law firms and other professional services firms grow through this change. We provide the following services:

• We help define the firm's vision for the future We design and implement the technology infrastructure necessary to modernize firm processes
• We help strengthen the firm's business development engine
• We assess the firm's work flow process and design improvements to maximize efficiencies, boost productivity and enhance profitability
• We assist the firm with accessing accounting data to better manage the firm
• We help the firm navigate the marketplace to identify growth opportunities and become more competitive We work with the firm’s managing partners to develop their leadership team

We gather and evaluate feedback from clients to help the firm continuously improve.

Companies are increasingly worried about unpredictable legal expenses, as illustrated by the findings of 2005 Litigation Trends Survey from Fulbright & Jaworski L.L.P. The survey of more than 300 corporate counsel found that the number one message they would like to deliver to their outside lawyers was, "control costs," a sentiment shared by more than a third of respondents. Amazingly, cost containment outpaced the desire to tell outside lawyers to "win cases," "get results," "be proactive" or other similar case-oriented messages.As companies look for ways to reduce legal expenses, more of them are paring down the number of law firms they work with. This means increased competition among law firms and, more often than not, the customer is issuing a request for proposal (RFP).

If traditional business development was like a courtship, this new way of securing clients is comparable to an arranged marriage.

Determining that the RFP process enables them to more objectively compare what each firm has to offer, businesses are turning to this tool with more frequency than in years past. They are seeking answers to the following questions: What’s your expertise? How much experience do your attorneys have? With what big cases has your firm been involved? What is your fee structure?

While law firms are asked to answer such questions in writing before there is any hope of a face-to-face meeting, savvy firms approach these questions as a starting point.

When a firm responds to an RFP, they can set themselves apart from other firms by demonstrating that they understand the prospective client’s business and the underlying interests and market pressures that are driving the business.

When most professional services firms do what they think is market analysis, they only look at part of the big picture.  This causes them to end up analyze the wrong information and leads to the wrong conclusions. They say, “Let me take my top 10, 20, or 50 clients to examine how they spend money in these particular types of services that happen to line up with the kind that I offer.”

However, looking at how clients have spent money historically does not take into consideration the ongoing evolution or the occasional revolution in that client’s market. How has their market changed? How does the client need to be changing and, therefore, how does the law firm’s service offerings need to change in order to serve them better?

A good example of market revolution is in asbestos litigation. A firm might have looked at that trend several years ago and come to the conclusion that all of the companies in that market spent a lot of money on asbestos lit support, so building out services in that area would make sense.

The only problem is that the litigation in that arena had pretty much run its course. All those cases have been settled and the future spending in the area has nothing to do with the historical spending.  Building new teams that specialize in the area and new service offerings would not give them the results they need.

Instead, they should be looking at the market they serve and say, “What’s driving that market? What kinds of industry changes, market changes, competitive positioning are our clients going to be doing within that market? And given that is their future, how do we need to respond to that?  How can we add more value to our relationship with our client?”

Another great example of market revolution is the upheaval that has occurred in the music industry. Its slow response contributed to the rise of the file-sharing phenomenon and the ambivalence among the major players to technology advances has significantly changed the power structure in the industry. Five years ago, how many would have guessed that Steve Jobs and Apple would be among the most powerful forces in the music industry?

Law firms and other professional services firms need to dig in and understand emerging trends, competitive forces, and changing industry regulations, in order to help their clients and prospects identify their own company’s opportunities and threats. Once you understand what’s happening in their market, and what is likely to happen in the future, you can interpret how to add more value to the relationship.

An excellent way to understand your client’s world is to open up the dialogue about it.  Have your clients in to talk to your leadership at retreats. Discuss and understand what your clients’ strategies are for success.  Conduct regular executive account reviews to highlight how your firm serves the client now and in the future.

Business development has changed. The days of a big company working with a dozen or more law firms on various issues are gone. So are the days of having one “rain maker” responsible for the firm’s business development success. The trend is to have a handful of partners who really get it and solid plans in place to support their efforts.

Can you continue with the status quo?   Not if you want to be viewed as a partner of the client. Having a good set of contacts isn’t going to get you through an RFP process. Only client-focused market analysis and effective marketing plans that align with your firm’s vision of the future will help you do that.  Rafte & Company can be your partner to clarify your vision, align critical growth initiatives, and integrate processes within the current culture of the firm.