At an IBA conference on legal business, in Vilnius, Lithuania, on 4 May 2012, I have an opportunity to make a presentation summarizing Walker Clark research on the structure and financial performance of law firm client bases. One of several key points from that research is that the most profitable use of a partner’s time usually is to market the firm’s services to existing clients. The return on investment can be greater than any other partner activity: at least 8-to-1 in firms where we have measured it and, in some firms, as high as 16-to-1.
Most law firm partners agree that cross-selling is important to creating sustainable long-term growth. But that acknowledgment usually is quickly followed by the observation that their firms do not do it well enough — or, in some cases, at all.
I have observed three frequent reasons why law firms — and especially law firm partners — don’t cross-sell well:
- Lack of a cross-marketing plan. Just as marketing requires a plan, so does cross-marketing. A firm’s cross-marketing plan should document the target clients, the services to be introduced to the client, and which partner or — better yet — team of partners will be responsible. Developing a cross-marketing plan takes time, but the cost of not having a plan is much greater in terms of lost opportunities.
- Lack of cross-marketing incentives. In many firms, there is no significant direct incentive for a partner to sell work for other partners to do (and get all the credit for the fees). This is especially a risk in “eat what you kill” compensation systems that reward only direct fee production. If you and your partners are not cross-selling, consider whether there is any financial incentive to do so, other than a vague “rising tide raises all boats” benefit.
- Lack of a cross-marketing culture. Firms that have a “my client” culture, rather than one of “our client,” will find cross-marketing difficult — even if plans and incentives are present. This is because cross-marketing is dependent on partner commitment more than any other factor. Don’t expect the marketing department to do it for you.