Jeff Berardi, Chief Marketing Officer for global law firm K&L Gates, wrote a very thoughtful and thought-provoking piece about developing an effective sales function in a law firm published in JD Supra.
Mr Berardi wrote that “lately [he’s] noticed that there has been a lot of talk about the creation of true sales functions within law firms.” He wrote that he’d “like to caution the legal industry about possibly having a knee-jerk reaction to the latest business development trend du jour, perhaps in response to the serious and ongoing challenges of a global market that has produced flat or lower demand for legal services in recent years.” He provided “some general thoughts about the development of a sales function within a law firm, which include some concerns [he has] considered and confronted over the years in [his] role as the head of marketing and business development for a large, globally integrated law firm.”
Berardi outlined four key concerns, which I will enumerate below. With each — I’ll seek to provide the best answers I can which I hope will assist in the understanding of how law firm sales can be effectively established and nurtured within a law firm.
1. Incentives and Rewards
Berardi outlines that “In order to develop a sales function within an organization, you must be able to properly incentivize and reward salespeople. This holds true for the field of law just as it would for companies in other industries. Herein lies the first, and perhaps most challenging, hurdle to overcome.” Berardi cities the time and complexity involved in the sales process. Often long and involving many – he indicates it can be hard to determine how to compensate law firm sales people effectively.
My response to this concern would be that a law firm sales function is a long-term strategic decision a firm makes. It therefore isn’t a role where a short-term commission structure is the best system to put in place for the role. Instead I’d argue – view and compensate the “sales people” (for lack of a better way to put it) as sophisticated practitioners akin to hybrid lawyers/business developers. I enumerate the ideal characteristics of the role here in an interview with LegalTrek CEO Ivan Rasic. These hybrid professionals can be compensated effectively by salary (if an employee) or retainer (if independent consultant) – and payed an annual bonus, reflective of the firms appreciation of their contribution and reflecting business generated – as determined by firm management. There are a variety of permutations compensation can take. However flexibility and flux in remuneration – isn’t something that would be alien to a person in this role. Law firms can view the role and those who fill it – accurately – as flexible, open-minded, driven and capable. They’ll therefore be open to creative solutions.
2. The Perils of Creating an Intermediary
Berardi outline his experience as reflecting that “some clients would find it odd and off-putting to be contacted by a salesperson, or to have such a person in a meeting with a law firm under consideration. Will that perception change in the future? Perhaps, but I do know that at the moment it isn’t a generally accepted practice by clients or by law firm lawyers.”
I would argue that it depends on who is the salesperson. I have argued before and state now – that the ideal salesperson in a law firm is a hybrid lawyer/business developer. Capable of sales yes, but also highly adept at digesting large amounts of actionable intelligence about the subject matter expertise the firm maintains, and then capable of translating that expertise into language clients understand and deem valuable as a means by which they can retain the firm to achieve their objectives. This takes gravitas, tenacity, high levels of creativity — and diplomacy. Clients in my experience are less concerned about who the person is that’s contacting them – but rather the message that’s being conveyed and how it’s conveyed. Done well, it would I suggest address Mr Berardi’s well stated concerns.
3. The Shift Away from Marketing/Branding
Berardi writes that “it is important to maintain an appropriate balance between the support of both marketing and business development activities. One is not more important than the other. I agree. Both can work very well together. Today however marketing is the far and away predominant means by which law firms seek to generate new revenue. Precious few firms utilize sales pipelines. Properly integrated with marketing efforts – they can make a monstrous difference in how much top-line revenue is generated for a firm year-on-year.
4. Changing the Culture
Berardi argues that “some forms of radical change can consist of such a shock to the system that the organization cannot thrive or ultimately be successful.” I wholeheartedly agree. I believe strongly that a sales function in a law firm can become a veritable invisible presence. The “salespeople” operate in the background like sophisticated political aides. Always ensuring their clients (the firm lawyers themselves) are the prime focus of the client-facing effort. When one teams subject matter experts with discreet, efficient, adept, diplomatic and loyal salespeople – the firm culture will change imperceptibly by the presence of the salesforce – whose focus will be service – not stardom.
Jeff Berardi’s observations about how a sales function might be integrated into a law firm are very well taken. But I would also note that, in recent years, both NewLaw and legal startups have been utilizing dedicated sales efforts as a means to grow market share. Therefore, traditional law firms — with rare exceptions — may be the last business model in legal services to not have adopted sales operations as essential components of their operations. I’ve sought here to provide a brief overview of my thoughts on the subject, having myself operated an overseas sales pipeline for the greater part of a decade for an AmLaw 100 law firm – and now operating or advising on the adoption of cross-border focused sales pipelines for other law firms. A sales pipeline can in fact be integrated into a law firm of any size, taking into account each firms unique and often delicate culture. Indeed, a law firm sales pipeline, operated effectively, can not only provide a firm with a source of new revenue – but also act as a long-term strategic balancing element in an annual revenue focused industry.