Marketing Techniques for a Family-Owned Law Firm

FAMILY BUSINESS, CASE NUMBER 11: THE HURST AND HOWARD FAMILY LAW FIRM

THIS CASE PRESENTS PERSONAL MARKETING TECHNIQUES FOR A FAMILY-OWNED LAW FIRM

George Hurst and Raymond Howard met in law school in Boston in 1970. They often studied together and through them, their wives got to be good friends. Both law students were from Cape Cod as were their wives.  Law school can be a tedious three years with a massive amount of reading and vigorous classroom challenges. (The television program, Paper Chase, well portrayed the law school classrooms of the 1970s).  Students were subjected to a barrage of questions from aggressive professors and humiliated if they were not prepared or did not quickly know the answers. It was supposedly a process of weeding out candidates. It was not unusual for only 70% of the first year students to graduate. One cranky law professor explained that if a student could not handle pressure in a law school classroom, it was questionable if they could ever competently represent a client in a courtroom.

Both George and Raymond survived the three years and took both the Massachusetts and Maine bar exams. Maine was interesting to them as each of their families had vacation homes in Maine. George’s family had an oceanfront property in Boothbay Harbor and Raymond’s family had a cottage on Sebago Lake in southern Maine. The two couples had long discussions about where they wanted to live, work and raise the children they were hoping for. Both George and Raymond applied to be associates in several Massachusetts and Maine firms. Both students received offers from two firms, one in Massachusetts and one in Maine, but not the same firms. Their plan to practice together was not going to happen, but they both decided to move to Maine and work in the law firms in Portland that made them offers. George was placed in the real estate department of an 80-person law firm and Raymond went into a general business practice in a 15-person law firm.

Their early years of practice offered some great moments and many anxious ones, as they had to experience many first-time client, colleague and partner situations. All new associates had the same goal of making partner. In the 1970s, the time to become partner in most firms was roughly 5 to 6 years and each associate received compensation in the years leading to the partnership equal to all associates who entered the firm at the same time. These were great years as both families expanded with two children each, two girls for George and two boys for Raymond. Both families lived in Falmouth just outside of Portland and joined the Portland Country Club where many of their clients belonged.

In January of 1979, George was asked to come to the office of the firm’s senior partner and was delighted to learn the partners wanted him to join the partnership. George first called his wife with the news and then called Raymond. George was excited to tell his best friend that he was admitted to the partnership. Raymond tried to sound happy, but finally had to say that at his meeting, fortuitously on the same day,  he was not given good news as he had been passed over in favor of the son of one of the founding partners of his firm, a person he did not respect. The tradition in the Portland firms was once passed over, that person would forever be passed over. George consoled Raymond as best he could but knew how he must have felt. It was a bad day.

That weekend George and Raymond made the decision that they wanted to have their own firm and would take the next six months to plan how to do it.  It was fun to clandestinely meet and talk about what would be needed. They would need to find office space, hire a secretary/receptionist, purchase research materials, find clients and somehow make their wives feel comfortable with this decision. The wives were very anxious as the financial stability of an established firm with a regular paycheck would be lost. They started to save every penny that they could and alerted their families that they might need some short-term help.

The firm of Hurst and Howard came to life 9 months later, in September of 1979, with an office in an older building on Congress St. in Portland. They traded the building owner some legal services for the first four month’s rent and found a part-time receptionist or secretary who was willing to go to full time whenever asked. She was asked at month three, as George and Raymond were able to attract several very good clients from friends made at the Portland Country Club. They were careful not to solicit clients of their former firms, mostly for the practical reason that Portland was a very small city and the legal profession was protective of their firms and each other. After all, George and Raymond were really not Mainers.

Luck and hard work are great companions. George and Raymond worked very hard and developed the reputation as the law firm businesses should go to.  They were also lucky to receive client referrals from their former firms when those firms had conflicts.  By 1998 they had 32 partners, 26 associates and 12 paralegals. Two of the associates were George’s oldest daughter and Raymond’s younger son. They became a family business—actually a two family business. By Maine standards, they were a large law firm and one that had grown faster than any other firm.

Businesses, including professional firms, go through stages of growth and at the end of each stage need to look carefully at their management structure, personnel policies and strategies for the future. George and Raymond felt worn out. They had held onto almost all the firm’s management responsibilities while each still producing over 2,000 billable hours a year, the firm standard. All was going well, except profits and partners’ incomes had started to slide. George and Raymond decided to spend a weekend off site with five of their most trusted partners to discuss the firm’s issues. They discussed stimulating partners and associates to develop more business, changing the management structure, considering a new compensation system and beginning a conversation about leadership succession. It was not a coincidence that these seven partners brought in over 90 percent of the new business and still maintained above average billable hours and dollar volumes produced.

The weekend discussions were long and mostly productive. They decided to take individual issues and assign them to two person teams for analysis and report back in two weeks with recommendations. They also authorized each team to seek outside help if needed but asked that George and Raymond approve any expenditure.

Raymond and Colleen, a ten-year partner also specializing in corporate law, were assigned the task of developing a plan to motivate other partners and all associates to bring in new clients.

George and Jack were assigned the task of reviewing the firm’s compensation system and recommend changes, if needed.

Two younger partners were assigned the task of looking at the firm’s management structure, system of adding partners to the firm and what to do about non-performing partners.

Raymond and Colleen met each noon for the next three days, first to look over statistics of who actually had developed each of the new clients in the last two years and, if possible, to see how it was done.  It was no surprise that George and Raymond accounted for a little over 60 per cent of the new clients. When Colleen (who had much more modest new client production) asked George how he did it, he did not have a real answer. He said “they just call.” It was obvious that some kind of new client record needed to be maintained to show how each client actually came to the firm. The more important question was to figure out a way to help other partners and associates to be successful at developing business. Raymond certainly did not want to ask other law firm rainmakers for advice but in the middle of the night had an idea. He would talk with David Reed, a local tax accountant who was a well known rainmaker, first for the accounting firm he spent most of his career with, and now with his family business consulting firm. Colleen agreed as she knew David and had referred several client family businesses to him in the past year.

Raymond and Colleen met privately with David and told him they needed help stimulating most of their other partners and all their associates to get new clients for the firm. David smiled and quickly said that the previous day he met with George and Jack who had asked him to look at the firm’s compensation system and make recommendations for changes. David said this might fit all together but he would need to think about it. David wisely asked if Raymond and Colleen had any specific suggestions. They asked that David meet with the partners and associates in two separate Saturday morning meetings which they would make mandatory.  They wanted the partners in one meeting and the associates in another (old fashioned law firm separation). They said Saturday at 8:00 AM as they did not want to lose any billable hours and perhaps gain some as the lawyers might stay a few extra hours and do some client work. Raymond was an aggressive individual and emphatically stated that he wanted David to just “tell them they have to bring in clients” and then tell them how to do it. They never even asked what this would cost so David knew they were very serious.

David had never done a professional sales seminar before. He had been to several Dale Carnegie programs for his own professional development but knew most of what was presented there was for confidence building. One plus was that he had not met many shy lawyers in his career.  He spent many hours trying to decide how to approach this assignment. One initial question was whether to do the compensation assignment first or do the selling seminars first. He decided to investigate the current compensation system and think about what might be needed. Before giving any advice, he would make the seminar presentations to see what responses might be and to see if  responses gave him any ideas for the compensation system. He expected it would but always best to find out.

David enticed his business partner Tim to assist him with the selling sessions as they started to call them. Tim was a great sales person so they divided up the assignment. Tim was not an early morning guy and the idea of giving up a Saturday of sailing was not welcome either but he was a professional so David knew he would do a great job. David also asked his son, David Jr., to attend the meeting as he also worked with David and Tim. Tim was quick to note to David that the lawyers will blame them for having to show up at 8:00 on a Saturday morning so the audience would not be warm and fuzzy.

They were not. Raymond had told everyone that the meeting was to teach them to sell professional services. Who went to law school to be a salesperson? It was a foreign idea to most. They were professionals and the quality of their work should speak for itself and lead to clients, a somewhat naive perspective.

The first Saturday session was for partners. David knew all of them and many had been clients of the accounting firm where he spent most of his career.  Raymond started off by introducing David, Tim and David Jr. (who sat in the audience as his dad had asked) saying that David Sr. had developed over $100 million in new clients over his career and was going to tell the group how it is done and how they can do it also. David knew that the amount was exaggerated but liked the sound of it.

David started slowly as he wanted to warm up this difficult audience. His intention was for this to be a session they would talk about for weeks. He knew not to start out by asking questions as more likely than not the lawyers would just sit there and let any questions remain unanswered and all would then start off with difficulty. David used the following outline in planning the session and to follow as he and Tim made their presentation. He knew it had to be predominantly a presentation as interaction would be almost impossible to achieve with this group and methods such as break out groups could be a disaster. David and Tim used the following outline as annotated for this purpose.

                                                                   SELLING PROFESSIONAL SERVICES

I.   BACKGROUND

 A.  The legal and accounting professions have only relatively recently allowed the direct solicitation of clients and advertising to seek clients.

      1.  Prior to the regulatory permission clients were mostly gained the old fashioned way: doing good work for existing clients and enjoying their recommendations to friends and business associates. Many lawyers and accountants wish that was still the system and many act as though it is, not from personal ethical views, but because they either do not want to actively seek clients or do not know how to seek new clients

2.  PROBLEM

   Since some lawyers actively solicit clients, including your clients, and many law firms engage in advertising campaigns, the firms who do not so seek new clients in such ways are left at a significant disadvantage.The result is such firms cannot grow at a pace equal to the pace of the expenses to operate their firms.  The further result is that either the current and future partners earn less than their peers and less than they used to or the firms do not survive.

  1. Your firm is not growing as it needs to and you, as partners, are not making what you used to.

    2.  Last year you only added one new associate in an attempt to control costs.  That is really not the answer.  The answer is to attack the problem: lack of growth. That is what we were retained to help with.

ATTITUDE

Professional selling is a matter of individual attitude. Planning, research and selling skills all help but without ‘attitude’ not much will happen. You have to want and need to gain new clients. Waiting for the rain makers in the office to provide you clients will not be enough. A few new rainmakers and every partner creating some sprinkles is what is needed.

What is ‘attitude?’  Sure some would say a state of mind but that is still not enough. In my family, my son who is sitting there with you and I take a selling attitude to a very high level.

Embedded in our minds is the motto of “GAIN ONE NEW CLIENT EVERY WEEK.”  Yes, a new client every week. How serious do we take this?  Yesterday afternoon, when David Jr. stopped by home,  after a week-long assignment in Bangor, he sheepishly said that he had not acquired a new client that week. He knew what I would say, and I did, “The week is not over yet.”  With a little discussion, we decided to have dinner in a small restaurant in a nearby town where we knew the owner, a guy David’s age. Before we left the restaurant, David Jr. had fulfilled his weekly task of gaining a new client as he does every week. It was small engagement,  business and personal tax returns, but we knew the new client would mention David’s name to customers and friends, especially after he heard what David could do to reduce his income taxes. We have a second motto of “EVERY NEW CLIENT BEGETS FIVE MORE CLIENTS.”  Try it. You will see that it works.

How does David Jr. do it? Let’s demonstrate an example. We are tax consultants. We look for high wealth individuals and businesses of all sizes for clients. We get some of our clients from other professionals such as attorneys and stock brokers who refer their clients to us. I did not prepare David Jr. for what was about to happen except that I asked him to make sure he had his phone handy. I asked who the managing partner of the largest law firm in this city was. The answer came quickly. It was “Ralph.” My next question was then be if anyone knew the phone number of Ralph’s firm. That answer also came. I then asked David to call Ralph, hoping he would be in and make an appointment to take him to lunch in the next two weeks to talk about professional careers. David was surprised but called. The Saturday morning receptionist answered the phone and David asked for Mr. Ralph. She asked who was calling and he was put through. David was polite, thanked Ralph for taking the call and made his request and received a positive response with a time and place. The room of sophisticated lawyers were amazed.  They started to warm to the occasion and wondered what might come next as a surprise. They were not disappointed.

Oh,  it is only fair to confess that David Jr. as a teenager, had been Ralph’s lawn care provider and that Ralph did not really know whether it was David Sr. or David Jr. on the phone until he heard the voice. The audience did not know all that, so the desired effect was achieved – pure amazement!

SELLING TECHNIQUES FOR PROFESSIONALS

If the right ‘attitude’ for you is to gain a new client every week, you have to really work at it.  First you have to have target clients. That will differ significantly by your personal type of practice. Then you have to decide how to contact the target client. You can write letters until you are blue in the face and it will almost never do any good.  Professionals write because they do not want to hear the word “NO.” Investigation and research is also good and needed, but do not waste a lot of time. You are just postponing what really needs to be done. Put your shoulders back and call to get an appointment just as you just saw David do. When do you call? Never on Monday, and never on Friday afternoon. Monday is every professional’s worst day. You already know why. Friday afternoons speak for themselves. Call on Tuesday at 8:00 AM. All you want to do is get an appointment sometime the following week or the week after. Once you get the appointment, get off the phone. You achieved your goal. Most people you call will want to know why. Be vague in what you say but positive such as. “I have watched your business success and would just like to talk with you about how you have done it,” or “I have clients in businesses similar to yours and have several ideas that could really help you. I would like to talk with you about these opportunities.”  You get the idea.

You need a list of 20 target clients and target referral sources.   Every Tuesday morning you call until you get three appointments. Always have at least three appointments scheduled ahead of you. When one drops off, get another. Every week you need to have three appointments with the goal of getting at least one new client. There are no carryovers.  If you get three new clients in one week that does not mean you can skip three weeks. This is foremost a matter of discipline.  You know the rest of the details:  a nice note following the meeting, follow up on all promises, set the stage for providing the service you offered and then do good work.

You all probably have people who refer or could refer clients to you. The referral game is a game of reciprocity. They will refer if you will refer back, and they will refer if you personally use their services. Therefore, look to only people you would recommend comfortably because they are as good at what they do as you are at what you do.

Can you have only one referral source in each of the other professions?  No.  I have accounts with three stockbrokers and all three refer business to me.  My largest account, of course, is with the broker who refers the most business. He is good for at least 10 new clients each year (20% of the goal of one new client a week).  I have three insurance people and your firm is my firm.  So be nice to me as I am a client.

THE FIRST MEETING

Here is where you need a plan.  You know what you do best.  You can guess what your target needs.  So spend most of the lunch listening.  Get the target to chat about his/her business.  You can be certain they know why you are there.  The fact that they accepted the appointment and showed up shows they are receptive to some kind of a pitch.  They are ‘pitched’ by salespeople all the time so they know how to say no or verbally escape.  As they talk, you almost always will find an opening to talk about helping them.  They are about to renew their office lease.   They have some personnel issues and a weak HR person.  They have not updated their estate plan for 10 years.  They have decided to get a divorce.  They are considering expanding into Canada.  Whatever it is ,find it and gently pounce.    Ask to look over their current lease; offer to introduce them to your employee benefits partner; offer to introduce them to your estates and trusts partner; offer to guide them through the divorce process by sending them a checklist of the information you need to begin; offer to introduce them to your international law person and mention that you know an accountant, David Reed, who helps clients with over the border issues.

You got the client.  Oh, a client a week is a client a week for the firm.  It does not just have to be a client for your specialty. Cross-selling is great!

SELLING AT A BUSINESS MEETING

You are now getting the idea.  I have gone to many bar association meetings and have been amazed at how good the turnout is. I never go to meetings of accountants unless it is for continuing education. Why would I want to go to a meeting attended only by my competitors? What a waste! Lawyers who want to sell their services should go to meetings of accountants, physicians, insurance professionals, trucking association meetings and meetings of the Association of General Contractors. Go where the clients are and go as a speaker. Offer to speak at every organization where there are multiple potential clients. A speaker has instant credibility. Use the opportunity to show your stuff. Take lots of business cards.

Let’s turn up the heat a little.

Two weeks ago I was invited to a bank dinner hosted by a Boston bank for its clients in Maine and influential individuals. It was on a Tuesday night at a nice restaurant. I have a standard plan for such a meeting. I always arrive early, especially when I do not know who is attending. The early arrival allows me to look over the name tags and see who is coming. I then pick four individuals who I want to talk with hoping to get their permission to call their secretary to set up an introductory meeting. I have learned that four is all I can handle in one evening. I then go into the dining room and look at the tables to see where I am sitting.( I have to use a little different technique with name tags which have a table number on it). Then I find where one of my targets is sitting and move his seat to a seat next to me. I have captured target one – done.

Next I go to the cocktail reception area to see which target comes in first. When he or she arrives, I go to the bar next to them and walk away with them in conversation. Done.  I have captured target 2. While talking with target 2, I watch for the next target to come in. Usually they have already come in, gotten a drink and are talking with someone else. I wait until they go for a refill as I do not want to interrupt  a conversation. I follow them to the bar and walk away with them in conversation. Done. I have captured target three. Getting the fourth target is the hardest. Sometimes I have to wait until the end of the dinner meeting and walk out with them in conversation. Done. I have captured target four. It was a good night.

TO BE CONTINUED:  SPECIAL SELLING TECHNIQUES FOR WOMEN , SEMINAR SELLING, BOARD ROOM SELLING, USE OF THE HYPOTHETICAL AND SPECIAL THOUGHTS FOR THE ASSOCIATE SESSION

 

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David Hawkes (aka David Reed) is a tax, financial planning, family & small business consulting expert. He has worked with thousands of clients and saved them millions of dollars in taxes over the course of his career. David is also a former minority shareholder of the Boston Red Sox.