Practice Management: Lawskills

What Marketing Processes do I need to understand?

......and what systems and procedures do I need to underpin a successful marketing strategy, with maximum results but minimum bureaucracy?

A successful marketing strategy is based on a comprehensive understanding of the marketing process, is built on streamlined systems and is supported by simple procedures, to produce maximum results.

Negotiating Fees with confidence

Twenty years ago a solicitor presented a bill to the client and the client paid it. Those easy days are now long gone and clients want to negotiate discounts at the start, again at the point of billing and often one final time after the bill has been delivered. Sophisticated clients are going on courses where they are trained how to negotiate fees so perhaps it is time for solicitors to think again about some more education in this area.

So what can be done? The following is a quick summary of things to think about before going into a meeting where fees might be discussed:

“How do I create and build a marketing strategy? Where do I start?”

The aim of a marketing strategy is to generate additional profitable work. Start with an analysis of where you are now and decide where you would like to be. Set realistic SMART targets - Simple, Measurable, Achievable, Results-driven and Time-bound which incorporate the number of clients, types of clients, fee-income and target dates. The following Six Steps will help you to create and build your marketing strategy.

Spring Cleaning the Balance Sheet

Spring is here, leaves may be appearing on the trees but there are still real doubts about the health of the UK economy. As many firms approach their traditional spring year end it is probably right to tidy up the balance sheet to present a more positive picture to partners and to providers of finance.

This tidying up is achieved by converting as much WIP and debt into cash before the year end. It should have been done earlier but if we adopt good practice now perhaps there will be less need for this panic in future years. So what can be done to accelerate cash flow?

Four essential tips on how to increase your business for as little as £1 for each client

The problem Lawyers face is that people in general don’t have to come to them time and time again, as they do to, say, an Accountant. Nor do they wake up in the morning and say to themselves “I have a great bank balance at the moment, I think I will go down to my friendly local Law firm and spend some! In the main, people arrive at the door of a law firm because they have an important (and often unpleasant) life change, or some other external pressure.

Marketing to Private Clients - Conclusion

My overriding message is that private client practitioners and firms of solicitors can no longer afford to sit back, worry and wait for the threats of the future. They have already arrived!

Putting it all together - how to make it all happen!

Let me ask you a seemingly ridiculous question that has nothing to do with marketing private client services. There are three birds sitting on a fence, two of them decide to fly away; how many are left? The answer is three. Deciding to fly away is not the same as actually doing it! For more than two decades, I have heard many private client practitioners talk enthusiastically about the steps they decided to take. Telling me about their intentions, however, is not the same as actually putting them into practice.

Do your Partners misbehave?

2009 has been a difficult year for most firms and everyone now longs for a return to 15 years of dull and steady economic growth. There are clear signs that the economy is not yet back to full health and 2010 could prove to be another very difficult year. The strongest firms are likely to be the ones where the partners behave properly and are excellent role models for everyone else. Unfortunately, if the partners misbehave, and they are the role models that others follow, then performance in the firm is likely to be poor.

Beware of a tax enquiry

Under Self Assessment an individual files their tax return, and H M Revenue & Customs (HMRC) process the information. HMRC then have the right to enquire into that tax return within twelve months from the date it is filed. HMRC do not have to give a reason for the enquiry. Such an enquiry can be both time consuming and expensive, in terms of both professional advice required and additional tax payable. There have been certain recent changes to these procedures.

Market externally to generate more enquiries (Part 2): Advertising and Marketing

Mention the work ‘marketing’ in legal circles, and many solicitors automatically equate this word with advertising. This, of course, is simply the process of paying for space, either in a publication or somewhere else, to promote your own particular message. All that is required is a quick phone call or email to book the space and the job is done. However, more money is wasted on pure advertising than anything else when it comes to marketing.

The Time Question - How to bill in Private Client Practice

The traditional billing model for professional practice firms has been the allocation of a charging rate to fee earners. They then charge time to each of the matters they work on which is then billed to the relevant client. Charging rates can vary, but are usually broadly designed to be a multiple of the full employment cost of the fee earner. Unfortunately this system has some flaws. For example:

Market externally to generate more enquiries (Part 1)

Joint Venture Marketing and Showcasing your Expertise

The following is a summary of certain types of external marketing initiatives that I have seen work well, together with some simple pragmatic tips about their execution.

Is your management information resulting in any real change?

Twenty years ago law firms were very different. Everything was done at a slower pace, clients paid their bills without questioning everything and it was relatively easy to earn a good standard of living. Most firms would get their accountants to produce a set of accounts at the end of the year but there was little need for management information.

New Offshore Disclosure (ODF) Initiative

As anticipated, HM Revenue & Customs (HMRC) have now issued details of its new disclosure initiative. Remember, disclosure can be made by personal representatives of a deceased person.

Alternative Business Structures: Threat or Opportunity?

Alternative Business Structures (ABS) will be with us sooner than we imagine!

In just over 15 months, the landscape for legal services will enter its next wave of evolution. The legal profession's approach to its business and how services are delivered has remained largely similar for many decades now, but ABS will bring a whole new regime.

Marketing to Private Clients (6) - Marketing to Existing Clients (Part II)

There are 8 ways to keep in touch with clients . . .

Marketing to Private Clients (5) - Marketing to Existing Clients - Part I

There are four golden rules of marketing to existing clients. These are as follows:

Golden rule 1 – Know your firm’s clients

Golden rule 2 – Keep your clients happy

Golden rule 3 – Keep in touch with clients

Golden rule 4 – Ask clients for more!

Cracking the time recording nut

For a very long time, solicitors have struggled to record their time properly. This failure causes enormous problems at the point of billing a client when inconsistencies between fee earners become apparent and it also means that firms have no real idea of the cost of their services and hence struggle to provide clients with realistic and reliable estimates.

Planning the practice you really want

What is the strategy for your practice?

Surveys and research continue to prove that the most successful businesses have one thing in common – they have committed time and effort to having a clear Plan in writing setting out their goals for what they want to achieve in the short, medium and longer-term. And please don’t think that a law firm is any different. Your law firm is a business just like any other, selling services and products to generate revenue and make a profit.

Income or Capital - a game of snakes and ladders?

Until 5 April 2008 both income and capital gains were taxed at the marginal rate, so that the highest rate of tax for each was 40%. However, from 6 April 2008 capital gains tax reduced to 18% and from 6 April 2010 income tax rates go up. Personal allowances will be tapered down to £nil for those with more than £100,000 of income and income above £150,000 will be taxed at 50%, with dividend income being taxed at 42.5%, rather than the current 32.5%.

Measuring Profit - looking in the round

An issue that often arises is that private client departments can often focus on one or two profit indicators, but don’t look at all three in the round. It is a sad but true fact of life that if departments try to increase recovery then seemingly inevitably the number of chargeable hours falls. Similarly it is all very well increasing charging rates, but if they become out of kilter with the market then recovery rates tend to fall.

Getting the Price Right

Market forces

When solicitors are challenged about why they are not charging more for the services they are offering they often reply that there is a market price for the service being offered which they then have to offer to get the work. In addition, most solicitors will quickly tell you that the market price for the services offered has fallen.

Dealing with the Office Bully

You work in an office where there is a ‘tyrant’. They are not the boss as such, but they have often been in post for some time and have some informal authority. This is not gained by rank or experience but by intimidation. They tend to get their own way and tend to show two faces – a reasonable [and somewhat twisted version of the truth] to their bosses and a much more unpleasant bullying tone to their peers and subordinates.

Planning for Profit

Big fees?

Power in law firms has, for many generations of lawyers, been associated with the lawyers who have the largest fee portfolios as it has been seen that these people clearly make the greatest profits. In the same way, management information has tended to focus on the number of hours worked and the billings of individual fee earners rather than on the amount of profit actually made.

Keeping the cost down

In recessionary times all businesses tend to be cost conscious and this recession is no exception. Many firms have a Spring year end and so now is the time to start looking at costs to make sure they fit the current profile of the business.

We have undertaken a number of exercises recently on behalf of clients to re-examine their overhead costs from the bottom up. Although, as with many professional practices, the bulk of costs are human, some real savings can be made.

Looking after your private clients in a recession

In a time of recession no client is ‘safe’. Businesses go bust whilst others have problems paying their bills but the private client sector is probably one of the most vulnerable and the most at risk. Buyer behaviour in a recession has changed;

The buyer decision process is taking longer as people research more e.g. on the internet whilst others are willing to ‘wait and see’
Thriftiness is on the rise - value for money isn’t enough to keep a client

Managing the Loss of Staff

In recent months many law firms have been adjusting their headcount to reflect the new trading landscape they find themselves in. Certain departments will have been affected more than others, but all departments with the possible exception of employment and insolvency departments, are likely to have been adversely affected to some extent.

Back to basics with billing

With GDP expected to fall by 2.5% and the very real risk of deflation, solicitor’s practices, like many other business are feeling the bite of the recession. People are reining in their expenditure and discretionary expenditure is more likely to be put off.

Marketing to Private Clients (1)

Private client and probate work is not, on the face of it, easy to market. After all dying is hardly a sexy topic. Most people really don’t want to think or talk about it, least of all do it!

Finding a sensitive way to get your promotional message across can appear a bit of a challenge but over the next few months I hope my column will help practitioners to be aware of the marketing challenges facing them and provide some practical tips.

Cash is King

Everybody has heard the phrase but professional firms nearly always choose to concentrate on higher profit rather than on good cash flow. Profit is obviously the long term aim of every firm but without good cash flow in the short term this long term goal will not be achieved.

Marketing to Private Clients (2) - Where should you start?

Start by understanding two things:

the marketing idea is not the only key; but it is the “personal performance marketing skills” of the person or team involved that is the critical factor that makes the difference between success or failure.
get your priorities right

Marketing to Private Clients (3) - Convert existing opportunities/enquiries into profitable business

This article refers to incoming calls and enquiries relating to wills and is for illustration only as the skills, techniques and thinking that I will mention apply equally to other private client services, too.

Marketing to Private Clients (4) - 5 Steps in Handling Queries

It is absolutely critical that the private client department and all practitioners understand the importance of this first leg of the Marketing Triad and the potential financial implications of it.