The word of Gold: profit, like charity, begins at home – by nurturing existing clients

Law firms always say that existing clients are their best source of new business, but more often than not put most of their business development efforts into winning new clients.

Sales and marketing are speculative, non-chargeable and costly. It therefore matters a great deal that they are directed to where there is the best chance of a return. The people we already know, whose needs we understand, who are pleased with our service, who trust and like us, will always offer the best growth prospects. Yet creating such a bank of willing clients takes much thought and effort. Being qualified to do the work is a ticket to the game, but rarely sufficient to win.

Business: it’s always personal

Successful firms create a thoughtful rolling programme to strengthen ties and put themselves in pole position for new opportunities. High on the agenda will be regular conversations between the firm’s senior people and the client’s decision-makers, checking out that the relationship is in good shape. Are service improvements possible? Is the firm responsive and accessible? Are its communications clear and user-friendly? Are there any rumblings of discontent?

If clients use different firms for different work, one should ask why, and listen reflectively to the answers. It is remarkable how often clients do not use a firm only because they are not aware of all the services it offers. Do not be afraid to ask the question: “What would it take to win all your work?” Whatever the reply, at the very least it will be instructive.

Firms may be nervous about appearing vulture-like, always looking to have sales conversations, but this is not the point. These occasions are for clients to talk about what’s going on in their world, their ambitions and fears, business and personal. Go into them primed to listen more than talk, and you will find that relations strengthen and opportunities arise organically. They are the route to personal rapport, the glue that binds relationships more tightly than expertise. Competence alone never creates enduring loyalty. Clients need to like us, feel that we share common values, enjoy the experience of dealing with us, and being in our company.

Making more profit means more than just doing more work. Despite these straitened times, consider whether it’s possible to have a smarter fee structure, or increase rates. Subject to maintaining quality, can work be done more efficiently at less cost? Is there potential for more accurate scoping, better processes, or leveraging more junior people? All over the place, partners anxious to appear busy will be hanging on to work that could and should be delegated.

The thrill of the chase

It is worth asking why the search for new clients so often has priority over making more of those already inside the tent. When a new client is brought in, bells ring, backs are slapped (subject to social distancing) and corks pop. Generate the same amount of new revenue from existing clients and we are just doing our job. It is not rational to behave like this, but hunting gives a bigger rush than farming: the thrill of the chase, the allure of the shiny and new, the adrenaline of pitting our wits against the competition. Cultivating more profit from the clients we have requires different qualities: perseverance, empathy, patience, while delivering consistent excellence in the work we already do.

Firms need new clients to grow and provide fresh challenges, but in deciding where to commit our precious resources, we should be clear-eyed about the task. Incumbency is a great advantage. Instructing a new law firm involves risk, and the investment of substantial time and effort to make the relationship work. Experience shows that businesses are wide open to culling their legal panels, and squeezing better terms from them, but are mindful of Hilaire Belloc’s dictum: “Always keep a hold of nurse, for fear of finding something worse.”

When clients do move, often it is because they feel the relationship has gone stale, service has dropped off, or they have been taken for granted. The current crisis only emphasises how important it is strategically to cultivate the flowers in our own back yard, for defensive as well as expansionist reasons. Clients will remember how supportive or otherwise their lawyers have been. On the plus side for incumbents, they will be even more risk-averse when it comes to change, and it is currently a lot harder for aspiring new entrants to physically get in front of them. Pitching by Zoom is likely to be a deathly experience. But these advantages can easily be squandered by complacency or carelessness.

Joni Mitchell had it right: “Don’t it always seem to go, that you don’t know what you’ve got till it’s gone?” Thus with our most precious relationships, and for now, much of life.

The Author

Stephen Gold was the founder and senior partner of Golds, a multi-award-winning law firm which grew from a sole practice to become a UK leader in its sectors. He is now a consultant, non-exec and trusted adviser to leading firms nationwide and internationally. e: stephen@stephengold.co.uk; t: 0044 7968 484232; w: www.stephengold.co.uk; twitter: @thewordofgold

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