It is commonplace to hear that cash in the legal market is in short supply – and, with the possibility of the economy emerging from recession in the next year, firms looking to grow again will have an even greater need for cash to stay solvent. Tighter budgets aside, how does this impact on the day to day operations of business developers?
It is one of the less exciting facts of business development that it is far more expensive and time-consuming, for example, to attend networking events to get a new client’s business, than to get business from an existing client. Therefore, any firm wanting to increase sales without significantly increasing costs should concentrate on their existing clients. And the key to this – the client database.
Investing in the Database
The client database is not particularly glamorous, but it is without doubt your most valuable tool for maintaining sales while those around you suffer. Above all, the database needs to be as complete and accurate as possible. This is the only way to be sure that you are targeting the right people for the right services.
This means that the database must be cleansed and maintained, and once it is up to date, information collection should be limited at first. Too many database exercises fail because of over-ambitious collection targets. Only basic and essential marketing information need enter the database, such as contact details and services provided. Marital status, home ownership and employment position would be an excellent start for a private client database. Building a relationship is important, so home as well as work email and other family contacts may be appropriate.
Information collection is a question for individual departments and teams, but setting standards up front is a vital task. Professionals generally respond well to the concept of standards, especially when they have been involved in setting those standards. Therefore, every team should get together and set the standards of database maintenance to which they will all adhere. This is especially important for the initial client interview when, by its very nature, there is more freedom to ask wider ranging questions. Having achieved this buy-in, there can be no complaints when individuals are expected to explain any cases of non-compliance.
Certain standards will apply to all fee earners, regardless of their practice area. Information must be collected at the first meeting, using a standard form (which will have been created using the standards defined by the team). All necessary fields will be completed.
Trusting in the Database
The biggest obstacle to effective database management is a lack of trust – not of the system itself, but of the other fee earners who will be using the information stored in it. Partners in law firms are notorious for ‘hoarding’ clients, demonstrating an inherent lack of trust in their colleagues. If the firm is to develop its business successfully, this barrier must be broken down. Cross-selling is a crucial part of business development, especially when times are tough, and having a well-managed, up to date database is central to this.
Lack of trust is endemic within legal partnerships, and the issue of database management is symptomatic of this. So it is important that, when setting the standards for data collection, procedures and guidelines to usage are agreed. Data owners must have confidence that the information they provide is going to be respected. However, something as seemingly basic as the database can play an important part in overcoming this challenge – and promoting cross-selling and business development in the process. That is surely worth investing in.