Mike O’Horo, Co-Founder of RainmakerVT, a legal business development consultancy, wrote in a recent blogpost that: “Law firms should emulate their corporate clients and hire experienced full-time professional salespersons and team them up with content-expert partners”. Mike’s blogpost was written in response to a question on the LinkedIn Group International Professional Services Business Development. The question was: “What is your sense of the future of law firms accepting sales divisions?”
Mike explained that: “the salesperson [would] serve as the decision-process expert, vetting opportunities and keeping things moving toward a decision, and the law partner serves as the content expert for the eventual solution. This sales model has performed very well in other knowledge-based industries, where domain experts aren’t salespeople.”
Mike concluded that: “The barrier to this model is that nothing would do more to institutionalize clients, which would seriously compromise partners’ ability to take them to another firm.”
In the group discussion, I responded to Mike that I’d performed that role, for an AmLaw 100 law firm – in Europe (and do so now in various measures for my current law firm clients). I am a lawyer, but my focus is exclusively in new business development. I work the entire sales cycle, from identifying the prospect, to securing the meetings, to participating in meetings with relevant partners, to writing the proposals, to in some cases helping to locally nurture the client relationship, to in rare instances – collections. The only thing I don’t do for my clients – is bill hours.
Traditional law firms face new, efficient competitors
Global competition in the legal services sector is increasing every day. Traditional law firms will in the future face increasing pressure from competitors who will not hesitate to adopt professional sales divisions. Legal Process Outsourcing (LPO’s) companies, Alternative Business Structures (ABS’) in the UK (whose market impact will also be felt overseas, including America), among others – will continue to eat away at more of the business that traditional law firms have previously assumed were there’s alone.
Jordan Furlong, Partner at Edge International and Senior Consultant at Stem Legal Web Enterprises recently outlined “the emergence of new competitive and disruptive forces that are mounting increasingly formidable challenges to our traditional assumptions and understandings about legal work.” Toby Brown, Director of Strategic Pricing and Analytics at Akin Gump recently outlined in detail how LPO’s in particular are coming after law firm market share, [and are moving] up the value chain.”
Indeed, as Katy Dowell recently reported in The Lawyer Magazine in the UK: “In January, [UK ABS law firm] Irwin Mitchell looked outside the profession for an executive chairman to drive its development in the post-Legal Services Act environment, appointing former PricewaterhouseCoopers vice-chairman Glyn Barker. This appointment is an example of how seriously non-traditional legal services providers are focused on staffing their organizations to wrest more market share from traditional law firms.
The adoption of social media, the creation of internal efficiencies, alternative fee structures and up to date technology are frequently cited as necessary for traditional law firms to adopt to compete effectively in the future legal marketplace. Traditional law firms will also need to professionalize their business development efforts, including adding sales professionals where possible, in order to effectively compete.