Client Retention and Acquisition“Winning Teams Draw Fans”

Enhancing the Bottom LineOSBA Annual ConventionMay 14, 2004

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Clients are the “Fans”

If your fans are buying tickets, little else really matters. Improving the efficiency of your office operations, increasing utilization, reducing expenses, etc. should be secondary to increasing profitable revenue.

It is much easier (and more profitable) to retain a season ticket holder than to find a new one.

The cost of pursuing and securing a new client far exceeds the cost of keeping an existing client.

Leading the league in home runs or RBIs is not enough.Just being a great attorney is no longer enough to attract and retain clients.

Fans Have Many Choices

• Today, clients are smarter about buying legal services.– Know more about us.– Demand better service.– Expect more freebies.– Keep pressuring price points.

• Trends suggest law firms face uphill climb.– Large law firms moving “down market,” Smaller firms

moving “up market,” and middle-sized firms getting squeezed.

– Clients pressured to do more in-house.– Convergance continues to gain momentum.

And the Fans Are NOT Happy

• 59% of 137 companies* fired or were planning to fire one of their law firms last year.

• And the #1 reason was…Cost Management Issues

• Other reasons mentioned in order of frequency:– Lack of responsiveness.– Overworking projects.– Quality of legal work.– Mishandling one or more critical matters.

• Growing influence of “service and relationship management.”

*4th Annual survey (conducted by the Association of Corporate Counsel and Altman Weil) of CLOs attending the ACC Annual Meeting in October 2003.

Fan Loyalty is Weakening

• 69.6% of companies have hired a new law firm in the last 12 months.*

• 15% more companies are hiring new law firms.• Companies are shaking up their roster of law firms.• Deep cuts are being made in the amount of work put

out to bid.• Client satisfaction declines in the face of increased

spending.

*3rd Annual Strategic Review and Outlook for the Legal Services Industry 2004 (conducted by the BTI Consulting Group, Inc.).

Time to Change the Clubhouse Rules

• Rule #1: Everyone in your organization needs to:

Think Business Development• Rule #2: Keep your existing clients happy.• Rule #3: Expand your “footprint” (cross selling) as

appropriate.

• Rule #4: Find new (and profitable) clients.

Rule #1: Everyone Needs to Think Business Development

• Everyone has a role in Sales, keeping current clients happy, cross-servicing, and finding new clients.

• Sales is not intuitive to most law firm personnel, but everyone has a role:– Receptionist sets the mood and tone of an office.– Support staff represent the entire firm when they interact

with the client.– Paralegals often have the most frequent client interaction of

all firm personnel.– Clients buy based on emotion but their chemistry with the

attorney(s) is key.

Rule #2: Keep Your Existing Clients Happy

• Great work does have its rewards.• Your clients are eager to help you help them

succeed.• Focus on efficiencies for each and every

client.• Leverage every opportunity to communicate.• Ditto for feedback.

Rule #3: Expand Your Footprint (Cross Selling)

• Clients want to work with fewer outside firms.• The easiest and most cost efficient sale is to

your existing customer base.• Clients are paying you to learn about their

organization, customers, and suppliers, as well as the industry in which they operate.

• Find the opportunities for your firm to bring value to your client.

Rule #4: Find New (and Profitable) Clients

• Recognize the excitement of getting a new client.

• Focus on those opportunities where:– You can compete,– You can win, and– You want to win.

• Target, Target, Target.• Stop the wandering; Turnaround early when

you face a dead-end.

A Good Manager is Hard to Find; But Find One Anyway

• Find the sales and marketing talent and make every effort to use it.– Existing marketing staff.– Successful and insightful attorneys and staff.– Organizations, associations, peers, business

contacts, etc.

• Ask, Listen & Learn.• Challenge everything (Sales and Marketing

are moving closer together).

Winning Teams: More than Just Having the Best Players

• Client Teams for doing the work have been around for ages; Client Teams for business development are gaining momentum.– Pressure by Firm management to institutionalize client retention

and development.– Competitive pressure to offer more and to be more creative (and

value oriented).– Increase effectiveness while reducing costs.– Clearer vision of the client’s needs and preferences.

• The best teams are not always a collection of the best players.

• Cultural shift for law firms.• Keep the focus on the client’s needs.

Guidelines to Help You Win

• Everyday, do something to help your client retention and acquisition efforts.

• Contact your clients and ask what you can do differently.

• Ask a prospect what they like and don’t like about the law firms they are currently using, or have used.

• Define what you do and who can benefit – then share it with the world.

• Network with a purpose.• Base your plans on your ability to implement.

www.hahnlaw.com

Thomas D. SmanikDirector of Business DevelopmentHahn Loeser + Parks LLP3300 BP Tower200 Public SquareCleveland OH 44114-2301216-274-2406tsmanik@hahnlaw.com