The art of product development at law firms
To thrive, law firms continually need to add new clients that can grow over time to become strategic accounts. In addition, new or revised firm strategies require a law firm to rethink what the client base should be three years or five years in the future: which clients must remain on the rolls and be nurtured, and which existing relationships must be launched and expanded.
Law firms are getting better and better at building existing-client relationships. But opening new doors continues to be a challenge for lawyers, who just are not great cold callers. Fortunately, we know of keys available that open new doors quickly and which do not violate lawyers’ sense of professionalism.
Years ago, accounting and consulting firms, which are many years ahead of law firms in terms of sales, sales management, and key account management, discovered that a solution developed for one major client – one that took many hours and a small fortune to create – could be a fit at many additional clients. The significant investment of time and treasure to solve the first client’s problem could be employed at little incremental cost to solve similar problems for clients two, three, four, five, and so on.
Here’s a real-world example of this kind of product thinking. Several years ago, one of the top global accounting firms was asked by a client with operations on several continents to see what could be done to reduce its global tax burden. Some of the firm’s top tax-planning partners devised a complex new structure that involved multiple transactions over several years; sequential private letter rulings from tax authorities such as the Internal Revenue Service; and lobbying-propelled regulatory changes. When complete, the multiyear effort annually produced scores of millions of dollars of reduction to the global tax liability of the client. The technique became known in accounting and legal circles as “the sandwich” or “the black box,” and it represents one of the first professional services products of the contemporary era.
Once in place, it was easy for accountants to send an e-mail or make a phone call to other potential users of the solution. The “script” for such outreach went something like this: “We just completed a major assignment for a client whose business line and global structure are not unlike yours. As a result of our work, this company has realized annual tax savings of $74 million dollars and – because the solution was developed in concert with regulators and tax authorities – it involves very little controversy. I’d like to tell you more about this solution that may also fit your company. May we get together soon to discuss how this idea may benefit your company as well?”
That’s a pitch that any lawyer and professional can – and should be willing to –deliver. And it is a meeting that just about every client and potential client will gladly accept.
Not every client solution can be successfully productized, and not every one of them merits “product treatment.” However, law firms that wish to outperform their competitors in efficiently acquiring new clients and growing existing ones should give additional serious consideration to “product development” or “solution development,” a practice that has been in place at accounting and consulting firms for a long time now.
Here are some suggestions about how to develop and expand a product mentality:
- Have your “product” or “solution eyes and ears open. Rightfully so, lawyers love to talk about their and their teams’ accomplishments, wins, and innovations. Law firm professionals who are on the informal product development team – which is to say, sales and business development professionals, communicators, marketers, practice group leaders, and others – should train and remind one another to be on the lookout for ideas that can be “productized.”
- Scan the narratives on invoices, particularly for large, noteworthy engagements, to gain insights into what individual lawyers and lawyer teams are doing that may be leverageable for other clients and prospective clients.
- Be open to all sources of product ideas. New solutions emerge from all areas – litigation, regulation, compliance, transactions, intellectual property, and others, but also – importantly – from service and efficiency improvements designed by staff professionals.
- Put a new lens on reports about clients’ wins that are shared in internal communiques, lawyer-rating submissions, and in external communications channels. As you write, edit, and distribute news about wins, take an extra moment to consider where else the successful solution fits.
- Carve out time in practice group meetings to seek out information about technical developments and legal strategies that might be a fit for other clients and prospective clients.
Members of LawVision’s Business Development, Sales, and Growth Practice have product-development experience gained at Big 4 accounting firms and other multinational commercial-sales enterprises. For more information on ways to begin product development, contact Steve Bell, Principal, 202.421.5988.
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