Why Business Development Is Every Lawyer’s Problem

Episode Notes

Transcript

Above the Law – Thinking Like a Lawyer

Why Business Development Is Every Lawyer’s Problem

05/26/2020

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Intro: Welcome to Thinking Like a Lawyer with your hosts Elie Mystal and Joe Patrice, talking about legal news and pop culture all while thinking like a lawyer, here on Legal Talk Network.

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Joe Patrice: Welcome to another edition of Thinking Like a Lawyer. I am Joe Patrice from Above the Law. We are back yet again and today we are — it’s starting to be a little bit warmer outside, it’s nicer than it has been. So not that we can go outside or anything, but hopefully all of you at home are having nicer days, maybe you will get a little bit of a chance to enjoy at least standing outside for a second or two.

With that I was going to transition I suppose into our conversation of the day by previewing it a little bit. We are going to talk a little bit about how lawyers do business. We often think of lawyers as professionals and practitioners, which obviously they are, but for many lawyers and one could argue all lawyers being able to be the master of the business side is critical and it’s one of those areas that maybe we didn’t know we wanted to handle or be a part of when we went into this profession, but it’s a reality.

I mean sometimes you just have to be on top of the revenue that’s coming in and also on top of the costs that are going out. Which brings me to the question, are you trying to cut costs, because you are not alone. In today’s climate a five-figure e-discovery bill per month is steep. Don’t pay that. Use Logikcull to reduce expenses and control your discovery process. Get started today for only $250 per matter and they will waive migration costs from competing platforms. For more information, visit logikcull.com/ltn. That’s logikcull.com/ltn.

That took a little bit of work to try and make that seem like that was natural, but hopefully I pulled it off for the rest of you.

But yeah, we are going to talk about business development and that’s why our guest today is with us, David Ackert from the Market Leaders Podcast is going to talk — we are just going to chat about the business side for a little bit.

So welcome to the show.

David Ackert: Thanks so much Joe. Great to be here.

Joe Patrice: Yeah. So I guess you do have a podcast, so let’s begin with the podcast kind of cross-promotion. So obviously everyone listening knows us, tell us a little bit about your podcast and what you cover over there?

David Ackert: Sure. So the Market Leaders Podcast has been around for a couple of years now. We typically will interview business leaders and thought leaders around the topics of marketing and business development, primarily in the legal sector, so we will bring in Chief Marketing Officers, we will bring in consultants and the topics that we talk about range from how to develop business in the current climate, which obviously it’s gotten a little harder than it might have been four or five months ago.

Joe Patrice: Oh, no kidding.

David Ackert: Yeah, yeah, in case you hadn’t noticed there have been some changes lately, but we will also bring in people who will talk about institutional business development initiatives within larger firms or how to motivate lawyers to think more around their sort of business development mindset, orient themselves around how to keep key relationships top of mind for smaller firms, I mean there really is quite the gamut that we go through.

Joe Patrice: Yeah. In my intro I kind of hit on something that I just hadn’t thought of, but as the words escaped my lips I thought about it, which is we think of lawyers and business development as kind of the province of somebody who runs a firm, maybe the province of a partner, but it’s really something that at all levels of being a lawyer you have to kind of think about the business side, even as you start out.

And so that’s why a podcast like this that talks about the — from different perspectives how business works is kind of so critical. And I hadn’t really thought about that, I only — like I mean, it’s how we always are, we always think of the business side as something that the rainmaker worries about, but it’s not true, it’s kind of always there for you.

David Ackert: Well, I think especially lately, and when I say lately I guess what I mean is the last 10 years since the economic downturn there has been a recognition across the industry that the model of well, there is the rainmaker or there is the group of rainmakers and they sort of feed everybody else, that model is no longer one that you can rely upon. If your rainmaker is lateraled out of your firm or they retire or whatever or something happens that kind of jeopardizes that revenue stream, then the rest of the firm is very vulnerable.

(00:05:07)

So I think lawyers are starting to recognize that everybody has to dip an oar into the water on this boat and do what they can. Now, some are obviously more capable or more interested than others in developing business, but at the end of the day your practice is your practice and you can’t expect other people to take responsibility for its growth if you won’t.

Joe Patrice: Yeah. And you mentioned people lateraling or retiring, and that’s why it’s worth it, even if you are out there listening to this and you are a law student or young associate saying well, maybe this is something I want to learn about down the road, learning the best practices and building relationships and understanding how they work is something you may want to start doing now, because at a certain point somebody is going to leave and it’s going to be on you to retain that business and build upon it. So these are all lessons that are timely.

David Ackert: Let me dive into that just a little bit, if I may Joe, because I want to make sure that we aren’t sort of speaking at such a high and broad level that it just becomes overwhelming to someone who is perhaps earlier in their career.

So if you think about it sort of like a funnel, right, when you are at the early stage of your career, you are at the top of the funnel and you are really looking at producing as many connections and relationships as you can at that point, whoever has the broadest network really wins at that level, simply because the people who are in that demographic are not yet decision makers, they are not yet people who can engage your services in any meaningful way, and candidly you are probably not at a stage yet where you can command the level of authority that you will be able to as you near partner level in your career. So this is the time when you want to cast a wide net,

And so no one is expecting you to bring in any business at that point in time, but there is an expectation and it’s just sort of smart business, smart networking to keep in touch with the people who you have met in law school, the people who you knew in maybe your undergraduate work, the people with whom you have developed good relationships, don’t let those relationships atrophy, because five or ten years from now you are really going to be glad that you have kept in touch with them as some of them, not all, that’s why we are talking about a funnel here, some of them are just sort of going to stay at the top end of that sort of framework, if you will.

But as you move through your career there is going to be a short list that emerges and these are the people who are now in a position to engage your services or refer your services and it’s a little awkward to reach out to them and say hey, I know I haven’t talked to you in 10 years since law school but I am up for partner or I just became partner and suddenly I have to do business development, that’s a really awkward point to sort of rekindle a relationship, right? So you want to maintain those relationships as you are moving through those early stages in your career so that they are going to be there for you when you need them.

Joe Patrice: Yeah. So one of the things I kind of previewed is that lawyers — I mean we talk about technology and lawyers not being able to understand that a lot, but it’s also true that lawyers often struggle with that business side of it. It’s not — they did — we went to law school because we were told there would be no math. All of that business side is just a different skill set than what I think a lot of people went into law school thinking they were going to do.

So with lawyers not always being the best at it, why do you think lawyers have these sorts of struggles?

David Ackert: Sure. Well, there has been a lot of research on this. I don’t know if you are familiar with or if you have had Dr. Larry Richard on this show before, but he is a psychologist who has — he is also a JD and he has studied the psychology of lawyers for many decades and in Dr. Richard’s findings there are four key personality traits that set lawyers apart from the general population and he has identified this through what he calls the Caliper Personality Profiling, which is essentially a personality test that he has run on thousands of lawyers now over the years.

And these four key personality traits include urgency, so that is to say lawyers have a higher sense of urgency than the average person. They are very results-oriented, they seek efficiency and economy, often at the cost of innovation or process and they can be perceived as impatient or brusque or as poor listeners.

If you are in a environment where you are being billed and you are billing in six minute increments and efficiency is one of the values that not only your clients appreciate, but internally your firm is heralded as being a priority, of course it’s going to feed into that characteristic and that behavior.

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The second characteristic is autonomy. So lawyers tend to be people who approach challenges on their own time, their own terms, they are more comfortable being in a position of adviser than learner. There tends to be that lone wolf syndrome that can emerge. And so people who are attracted to the practice of law have a much higher autonomy characteristic than the average person, but when it comes to resilience, the ability to sort of try new things and keep going back to the drawing board, so to speak, and sociability to show emotional vulnerability and build new relationships, lawyers rank much lower than the general public.

So these four characteristics make a lot of sense in the context of practicing law, but they are particularly challenging when it comes to developing business. Someone who wants to develop business and create a robust professional network and be able to compel another to engage their services, they are going to do poorly if they have too high a sense of urgency because business development is a long game. It takes years to convert a relationship into a client.

And if they have a high sense of autonomy they are going to have a hard time cross-selling or working as a team, creating a client team within their firm. If they have a low sense of resilience, then business development is nothing if it isn’t a matter of trying over and over again to find opportunities where someone can become your client and sometimes you reach out to them and they say no, and if you are too thin-skinned about it, then you might not go back later when the answer could have been yes. And of course sociability, it all comes down to relationships.

So these are ways where the people who tend to be attracted to the practice of law find themselves at a disadvantage. Now, of course there are the rainmakers, those outliers who just have it in their DNA, but they are in a very small pool of the population when it comes to the legal profession.

And so other lawyers have to sort of find their way through this uphill battle that is, as you point out, not necessarily what they signed up for when they went to law school.

Joe Patrice: Yeah. I mean I practiced in white collar so I tried to meet as many criminal people as I could at all times.

David Ackert: I am sure it had nothing to do with your extracurricular activities.

Joe Patrice: Right, yeah, no. So we mentioned the — you mentioned the financial crisis and I guess now we have got another one, so maybe we should say the last financial crisis, but have you noticed that there’s been an uptick or anything in lawyers’ interests in reaching out and getting help on this sort of stuff since that’s happened, as maybe kind of like the old movie studio system that as with the financial crisis that maybe some of those old models have broken down a bit and people are more interested in learning.

David Ackert: Yeah, I wouldn’t call it an uptick; I would call it a surge. I mean at my company we provide business development coaching and training and we have software programs that we license into law firms. And so not only are we seeing this in terms of lawyers really registering in droves for our webinars that provide techniques where they can learn how to develop business more effectively either in general or specific to the COVID landscape, but also on our software platforms, we see the spike in the data. They are logging in more now. They are looking at how they can manage their relationships more aggressively than they have before.

And I think it just comes with the anxiety of I just don’t know what to expect now. Before COVID, things were pretty predictable. I have a good base of clients and they are going to call with needs and they are going to do it at a fairly regular clip and sure, I can be proactive and grow my practice or I can just coast along and I still have a pretty good practice.

I mean that’s one of the good things about being a lawyer is that once you get to a certain position in your career, there is quite a bit of stability in this industry. But I think that that assurance that things are going to move in a predictable fashion has really been taken away from lawyers in the last few months.

And so we are seeing lawyers get a lot more, I would say anxious, I would say proactive, and I would ultimately say on some level, a little healthier when it comes to thinking about business development, simply because to the extent that one rests on one’s laurels even in the best of times, they are not going to be able to harness the full potential of their practice.

Joe Patrice: So you mentioned software and tools, I think for some folks it might be hard to wrap their heads around what kind of a program helps me have a connection with somebody. I go to a baseball game with them, I get that, what is it about software that makes that work? So kind of that client relations management stuff, can you explain to folks how that all works?

David Ackert: Sure. Well, I think software is not going to help you deepen a connection with another person, but it is going to help you with the primary challenge that lawyers have with business development, which is not so much proclivity, it’s really follow-through, its follow-up, right?

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I mean lawyers have friends who they’re comfortable talking to no matter how introverted they may be, and so it’s not a matter of, well, I just don’t want to talk to anyone, right? It’s usually that I have a very short list of people with whom I’m comfortable being sociable, and I just don’t want to go out there and schmooze and be a serial networker and expand that network, but I’m fine talking to this short list of people, clients, may be colleagues at the firm, maybe some referral sources.

The challenge is that they just get so busy managing a busy practice, the administrative burden that comes along with it, never mind the billable hour requirements that these relationships sort of fall through the cracks, and suddenly a lawyer picks up their head and says, wow, I’ve been neck-deep in this case or this trial or what have you and I haven’t been very good at reaching out to the people in my network who make the biggest difference to the growth of my practice.

So they end up in kind of this reactive dynamic where if someone emails them or calls them with a need certainly they are responsive to that but they are only servicing the matters that fall in their lap for the most part; so very reactive.

The lawyers that are more proactive are ones who are using some sort of system and maybe it’s old school and it’s just an Excel spreadsheet or it’s a paper list somewhere, but there are also software platforms that will send you a tickler, a reminder, hey, you really ought to reach out to Mary, you haven’t talked to her in three months and you put her into the software as a key relationship.

And so the software that we have is called Practice Pipeline and it really helps lawyers manage that shortlist. It’s not a CRM database with everybody and their mother, and all of their phone numbers and all that stuff in it. It’s just who were the most important relationships to my practice and how do I make sure that I’m keeping them top of mind so that those relationships don’t end up going dormant.

Joe Patrice: Yeah, no, it’s just one of those. Back to the technology thing I feel as though lawyers don’t understand how technology works when it’s the obvious stuff sometimes. So the kind of non-obvious, this is here to help you understand. The connections that you yourself have, like you brought that connection into the process, the software is there to help you understand that you have it to kind of respect what you’ve already accomplished.

David Ackert: That’s right.

Joe Patrice: Yeah.

David Ackert: To manage an existing asset if you will.

Joe Patrice: Yeah. Well, so the last thing I want to talk about is kind of the flip-side. We talked about people lateraling and retiring, and there was an era that came up four years where firms were a collection of fiefs in a lot of ways where I have the relationship with this client and somebody else has this relationship.

So how do you kind of balance that as you’re seeing talking to people in the industry? How is that getting balanced between the firm who has an interest in cross-promoting clients and spreading it out through all of the different vectors that they can service, and the attorneys who have very real business interests, especially in this world where people are getting laid off and so on in being very proprietary about their own relationships and how does that play out? I don’t know if this is kind of more of a general what have you heard as you’ve talked to market leaders over the years.

David Ackert: Sure. Well, it’s funny you’re asking this question because I just conducted a poll on a webinar that I was running this morning with, there were about a 140 participants from law firms all over the world on this webinar and we asked this very question about – first question we asked, to what extent is cross-selling and collaboration a priority at your firm?

And on a scale of 1 to 5, we mostly got 3s but a fair number of 4s and 5s as well. So firms recognized that it’s important for the lawyers to institutionalize their clients, those clients become more profitable for the firm and the more things that we are able to do with a client, obviously the more we can build them, the more we can become instrumental to their success, the more we have that trusted advisor-relationship with them as a firm.

But of course as you point out, many lawyers who don’t necessarily have that team-oriented mindset are reluctant to do so because they fear that it’s going to hurt the portability of their book of business and then of course, there’s just the trust issue. If there’s somebody at my firm who I don’t have a lot of trust in their competence or if I just think they’re going to try to steal my client or what have you, I’m going to be reluctant to bring them in and cross-sell my client over to their practice area.

So there is this inherent tension that can often occur, even though firms have the right rhetoric. They prioritize collaboration as being something that’s important that we really want to be doing more of this, we should be doing more of this.

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And I think the key to moving this needle, I think there are some lawyers who simply are not a great fit for the collaborative model and it’s important for firms to recognize that and no matter how hard we push that agenda, they’re never really going to step in line with it and that’s okay, right, to the extent that your firm, its culture will allow for some variety there then it’s not necessarily good or bad to cross-sell, but there is something to be said for, sort of, do you want to really play the long game and create a family at your firm and maximize the potential of your client base or do you want to play more of a short game where you’re kind of hoarding these relationships and you still leave the back door open if you ever want to bounce away to some other firm.

I think at the end of the day, it’s important that the firm puts forward the right culture that really suggests that collaboration isn’t just something that we talk about but something that we really mean and we’re here to support the lawyer in opening up their trusting nature, if you will, with the firm and with their colleagues and that we’re going to look out for them.

And I think it’s also important for firms to put initiatives in place that assist a collaborative mindset to be engendered among the partners. So that has to do with compensation, that has to do with creating social bridges that go beyond just the annual boondoggle where we all go to a golf course and get drunk and call it a retreat. But to really create those alliances within the firm so that people can start to make decisions, not just based on the firm’s strategy but based on the relationships. Again, it goes back to the sociability factor, the relationships that they have at the firm.

Joe, if you and I are at the same firm and you’ve become a good friend and I’ve gotten the point where I trust you, then of course I’m going to bring you in on this or that matter simply because I know you’ll have my back. But if I don’t trust you, and I’m a little bit skeptical in terms of my own nature anyway and the firm tells me I should cross-sell with you, I’m going to have a pretty good excuse for why, now it’s not the time.

Joe Patrice: Yeah, it seems a very delicate line and I could see how people really have to — I guess it’s that firms really have to sell their partners on the idea that they aren’t trying to screw them over, is really the nice way of saying it, I guess because —

David Ackert: No, I think that’s right.

Joe Patrice: Yeah, I mean, it’s blunt, but yeah.

David Ackert: No, no, look, I mean, you cut to the chase with that and I do think that compensation can really help or hinder that process because if you’re sending a mixed message where comp doesn’t really reward collaboration meaningfully then of course people are going to serve their self-interest and they are just going to bill on their own clients and look at that short-term reward and call it a day.

Joe Patrice: Yeah — no, I mean, it’s very interesting always to get into these sorts of questions. I talked before I do some consulting with people who are trying to lateral, and yeah, it’s always a concern. It is how much is this firm going to support me and be a platform that allows me to grow, versus how much are they going to just nab with my portfolio, the second I set foot there and leave me now kind of beholden to them and unable to move in the future if something goes wrong and it’s very delicate and from my experience it really is the firms that do the best are the ones who can — because everyone’s pushing cross-promotion really. I mean, they get the value of it, but it’s the ones who can — you used the word “meaningfully”, and I think that’s right. I can meaningfully communicate that I do think this is important and not because I’m trying to take money out of your pocket but because I think we can all survive and thrive.

David Ackert: Sure. Yeah, I think that at the end of the day it’s a mutual trust fall when done well where both parties just choose to lean into it and hold for the possibility that it’s going to work out, that’s when it works well. Obviously they can look for signs that they may have to pivot that position, but if this is a — I’m not going to tip my hand until you tip yours kind of a dynamic, the whole process takes a long time and one or the other party is going to run out of patience.

Joe Patrice: Well, thank you for joining today. So David Ackert from The Market Leaders Podcast, where else can people find you? You’ve got writings, places and so on.

David Ackert: Sure, well, we author a lot of research on a variety of business development-oriented topics. You can download our white papers at ackertinc.com. You will also find an overview of our various coaching and training programs, and our software platforms all at ackertinc.com, and if you do have the bandwidth for one more podcast in your life, then certainly you can find us wherever you listen to podcasts at The Market Leaders Podcast.

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Joe Patrice: And I’ve been hearing — well, I did a little virtual conference a little while ago and one of the takeaways that we got from it was that more people are taking on more podcasts. For me, it’s been a little bit more difficult because I always listen to during my commute, so I don’t have that anymore, so it’s been more difficult, but apparently according to the survey we had, more people are taking on more podcasts in this era, so.

David Ackert: I certainly have been. I’m taking these daily walks, which is a luxury I never gave myself before COVID and part of how I fill my time is listening to podcasts, among them yours.

Joe Patrice: Oh, there you go. So yeah — so this is the time. So that’s another podcast for you to add to your queue.

And so thank you all for listening. You should be subscribing to these podcasts, giving them reviews, not just stars but also writing some stuff about them to help us with the algorithms that dominate our lives. You should be reading Above the Law as always, you should follow I am @JosephPatrice on Twitter. You should listen to the other shows and the LTN network and The Jabot which Kathryn Rubino, who occasionally is here as a co-host hosts, and with all of that thanks also to Logikcull for sponsoring and we will check in with you again next week.

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