Every dollar spent on law firm marketing should return at least a dollar in profit. Most lawyers understand this concept called: Return on Investment.
What most lawyers (and most businesspeople) do not understand is that there is also a return on investment associated with your time.
Think about it: Your time is a perishable product. You will never be able to use the last 3 minutes again. You must invest your time wisely. This means you must receive a return on your investment of your time.
This video explains this concept in greater detail.
The choice is yours. You can waste your time or you can invest it doing things you think will provide you with an adequate return on your investment.
When it comes to law firm marketing, it is important to remember that the investment of your time will extend well beyond any initial marketing activity.
For example: Attending a networking meeting means investing about 2 hours, initially. However, if you meet five potential referral sources and you want them to send you clients in the future, you must invest additional time in each of them. If you invest 10 hours in writing to, dining with and socializing with each of those five contacts, you must receive a return on investment equal to 50 hours of your time.
Keep this return on investment equation in mind whenever you are focusing on your law firm marketing initiatives.
There are rules for everything these days. In fact, most professionals have rules you have to follow in order to work with them. Yet lawyers never seem to make rules for themselves when it comes to clients, payment and acceptable behavior/participation.
This video has more on this topic.
If you run your own law firm you get to make the rules. Period.
The key lies in not only establishing the rules but also in enforcing the rules. Legal marketing requires consistency. Run your law firm how ever you would like just be legal, more and ethical and consistent.
No matter how good your legal marketing is, if you don't get paid, you will be unhappy.
Since most of our clients have trouble asking for money, particularly when the client is required to pay for the service up front, we decided to make this video. Use these tips to help you ask for money and get paid faster.
You have every right to get paid for your services. While you may have an altruistic motive for doing what you do, you also have to eat. You need money to do that.
Incorporate these suggestions on getting paid upfront into your legal marketing today.
An important part of your legal marketing is your client orientation system. I use this term to refer to the system through which a client is introduced to your services, interviews for your representation and pays you for your services.
This process is unorthodox compared to the ways other lawyers on-board their clients. But then again, that is what I am all about. Being unorthodox and disrupting the status quo.
Background
Before I introduce you to this system, I think we need to gain an understanding of some of my beliefs and terminology when it comes to client relationships.
First: Clients want to be told what to do. Most clients are looking for a stern but loving adult to take their hand and guide them through life. If you do not want to fill this role for your clients, then someone else will. I guarantee it.
Next: You will negotiate more diligently for someone else than you will for yourself. Therefore someone else should discuss the money you will charge your clients. You should only discuss the value. This is because you are emotionally invested in the outcome when you negotiate matters on your own behalf. Don't believe me? Think about all the deals you wish you would have walked away from and didn't because you felt (insert adverb here: guilty, bad, sad, scared, angry, etc.)
Finally: Perception is reality. If your clients perceive you as exclusive and in high demand, you will be exclusive and in high demand.
Once I have your agreement on these points we can move forward with the client orientation system.
There are five steps to the Rainmaker Lawyer Legal Marketing Client Orientation System. They are as follows:
Step One: Client calls the office with an inquiry. The phone is answered by the Business Manager. Note this is not a receptionist, a paralegal or a secretary. It is a Business Manager. Someone with authority. The client is asked a handful of qualifying questions. These questions are designed to find out if the client:
1). Has a problem we can solve
2). Has money to pay us
3). Is the decision-maker and will make a decision if we meet with them
If the answer to all three of these questions is "yes" we move to step two.
Step Two: Collect a consultation fee.
You get what you pay for. If people can speak to you for free you must not be very good. I do not care what you charge (the higher the fee the better) but you must charge something.
Step Three: The Client Fills Out an Application for Representation
This is a form that provides you with the necessary background information about their personality, character and their history in dealing with lawyers. This is different and separate from the information they need to provide you about the matter they need assistance in handling.
The reason for this application is simply for you to determine if they are going to be a complete and total pain in the ass. This is important. Sometimes you do not want a client even if they can pay your full fee. It is better to find this out upfront.
Step Four: Get References and Check Them
I recommend you get three references from people and call them. The reason for this is not to make sure the person is who they say they are (although finding that out is a helpful byproduct); The reason for doing this is to condition the client to take your requests seriously and set the expectation that they will be an active participant in the legal process.
Keep in mind that everyone and I mean everyone can find three people who will say nice things about them. If their matter is confidential, like say a criminal proceeding or a divorce, ask them to get three letters of good moral character from someone in the community. The letters can be addressed: To Whom It May Concern. (Note: If this client is a referral, this part of the process can be waived.)
Step Five: The client meets discussed the fee with the Business Manager.
You are not going to be as good at this as someone else. The bottom line here is: The fee is the fee. No back off. No negotiation. Someone who works for you can say that with a straight face. You probably cannot.
This orientation system will result in higher fees, less wasted time and better clients. If you do not use it you are missing out on a significant opportunity to upgrade our law firm.
One of the parts of law firm marketing many attorneys struggle with is closing the deal. This means first, getting the client, who is sitting right in front of you, to sign on the dotted line. But there is more to it than that. They must not only sign on the dotted line but they must also pay and follow your guidance.
We consider this all part of closing the deal and all part of law firm marketing.
Here is the process of closing the deal and on-boarding the new client.
This process starts with a phone call inquiry. The phone call should be fielded by an administrative assistant or paralegal. The administrative assistant should have a script that he/she follows in order to qualify the potential client. This script must include questions about financial means and about the particular problem the prospective client is facing.
As long as the client is qualified, an appointment with an attorney should be scheduled. During that appointment, the attorney is essentially interviewing the prospective client to make sure the client is a good fit for the lawyer and the law firm. This is done through a consultative conversation loaded with open ended questions.
Once the attorney agrees to proceed, the subject of money is discussed. If the client has any financial issues, they must be worked out before any work is done. No work begins with the financial arrangements unsettled.
The next step involves covering the ground rules. These ground rules include contact times and contact frequency as well as what the client is expected to contribute to the resolution of his matter. Again, there must be complete agreement on all of these items before you proceed. If there is any hesitation, do not start work.
Using this process, you can see how a potential client can not only become a good client but a great client. The key to kicking this process off is incorporating it into your law firm marketing plan.
The goal in law firm marketing is to get as much business in the door as the firm can handle. Sometimes in attempting to achieve this objective the real, underlying goal gets lost in the shuffle. That underlying goal is to collect cash from the client for the work you do. I prefer, as do most of my clients, to collect this cash in advance of performing the actual services.
There is constant pushback from lawyers when I press them to change their business model and focus on cash in advance. They tell me they cannot be competitive if they operate in this fashion. They tell me this is not an industry norm. They tell me the clients will call them every five minutes for status updates if the money is paid in advance. They tell me lots of things, all negative, related to getting paid in advance. The trouble with these arguments is that they just are not true.
Ultimately, clients will work with you in any way you want them to. You simply need to set the expectations upfront and spell out what will be done and when it will happen. Then you need to deliver. And you need to have a track record of delivering. If you have positioned yourself and your firm properly, getting payment from your clients at the outset of the engagement is never a problem.
Here are three ways to structure an engagement so you get paid in advance.
Offer a Discounted Price for Paying the Engagement Fee Upfront: This strategy is similar to the strategy retail businesses use when they have a sale. They call it a markdown. The upfront price you offer to the client is what you would typically charge to complete the work. The fee if they pay over time should be at a significant premium compared to the upfront price. Since you are basically financing the legal work for the client, you are entitled to charge a premium for doing so.
Contingency Pricing with Anticipated Costs Paid Upfront: I hate the word retainer. Change that word to investment in your vocabulary. The client should make an investment upfront that will cover your costs in a contingency case (non personal injury). You can anticipate the costs by looking at past history of similar cases. You are still taking a risk when it comes to these cases, as you will have some time invested in them, but you will not be invested beyond that. This works well in collection or litigation cases where a settlement is the ultimate goal.
Success Fee in Return for Reduced Rate: If you spend any time reading my articles, you know I despise hourly billing. One way to combat the amorphous nature of some cases is to receive a monthly investment from the client which covers all work to be done during the 30 days that follow. Each monthly installment is equal and the work is spelled out in a bullet point format. You then compare this fee model to a standard hourly model to demonstrate the savings. As a reward for providing this discount to the client, the lawyer receives a success fee when the objective or objectives are ultimately achieved.
These are just three ways for you to improve the cash flow of your law firm. There are dozens more. Explore creative billing options that will improve your cash flow and leave a favorable impression with the client. This is not just a good law firm marketing strategy, it is good business.
Whenever the subject of marketing for lawyers arises, you cannot help but touch on the topic of the free consultation. Many lawyers offer a free consultation to their prospective clients with the though being that if they "just see how much I know, they will definitely retain me".
Have you ever felt that way? Do you offer a free consultation?
While you may have an extraordinary amount of experience and you may intimately know a specific area of the law, you probably just shot yourself in the foot with the pricing strategy of a free consultation.
There are four reasons why you should never do anything for free. (There are more reasons than this but these are the four most compelling reasons.)
People Value Things They Pay For: This is as true as the day is long. If you bill someone for your time people immediately respect it and they take it seriously. If they do not pay, they will not place a value on it. You have to set that value. If you do not, there is no way the client will value it as heavily.
Pay Equals Positioning: Are you a good lawyer or are you a great lawyer? If you are a great lawyer, you can charge $15,000 for something a good lawyer charges $5,000 to handle. Who gets to decide if you are good or great? The client. And you set the tone in his mind by positioning yourself with your upfront consultation.
Your Confidence Level Increases with Your Fees: Have you ever worked your tail off for a little bit of money? How did it feel? Well, imagine the opposite feeling. Imagine the confidence you feel when someone pays you a significant amount of money for your advice.
You Must Value Your Most Perishable Asset: You only have a limited amount of time. Once it is gone you can never get it back. If you do not "sell' it to someone it perishes. It is up to you to make the most of it.
This video provides additional detail on this concept.
I was first introduced to the concept early in my consulting career. I always wanted to give new clients special pricing so they could see how good we were. This worked in reverse. By discounting my pricing, I set myself up as someone who had not integrity in my pricing. Ever since that moment, I started doing introductory interviews to see if a client was a good fit. I gave no advice for free. I just interviewed the prospective client. If the client was a good fit, we moved on to a formal, paid consultation.
If you give advice, you must get paid. Do not do free consultations, ever. They are harmful on many levels and for many reasons.
Not all business is good business. Sometimes the best law firm marketing strategy is to walk away from a particular client opportunity and attract a better client. This video explains.
Here are three times when it makes sense to walk away from a business opportunity:
1). Walk away when you know the compensation you are receiving is not equal to the value you are delivering to the client. In other words: If the client is not willing to paying enough for the service to be performed correctly, you should walk away. Do not compromise and take shortcuts with your reputation.
2). Walk away when the client tries to negotiate the fee down before the work even starts.
3). Walk away when you are deep into the work and the client is taking advantage of you. If the scope of the engagement gets bigger, you must be compensated accordingly. If the client is unwilling, you need to find a way to remove yourself from the engagement.
Making a strategic decision NOT to take some kinds of business can be just as important as making a decision as WHICH business to take. All of these decisions should figure into your law firm marketing strategy.
The way you bill your clients can have a positive effect on your legal marketing. Legal marketing is all about relationships and presenting someone with a bill will often put a damper on your relationship with them. This video discusses how you can offer your clients both billing and payment options that will give you a competitive advantage.
Investment options for legal services are just one way legal marketing can help you build relationships with your clients. This can reduce or eliminate the negotiation game you play with clients when the bill is due. Legal marketing can extend to your billing and payment practices. Use them as an opportunity to create a competitive advantage today.
There are only three ways to grow your law firm's revenue. No matter how great your law firm marketing, the three ways do not change. This video explains.
Find More Clients
This is where most law firms focus their marketing. It is the first thing we all think of when we think about law firm marketing. This is just one way to grow your law firm.
More Work With Existing Clients
This is an often overlooked area. If you work in a consumer practice area (like divorce or criminal law) you will think it is a rare opportunity to work with repeat clients. There are many ways to leverage your relationships to make sure you source other needs and those needs are referred to others. They will, in turn, refer business back to you.
Raise Your Fees
This is the best way to grow your law firm revenue. You do the same amount of work for more money. This is truly a beautiful thing.
You law firm marketing should assist you with each of these three ways to grow your revenue. If it doesn't, you should give me a call.
Your fees say more about you than words ever will. Law firm marketing will help position you but your fees ultimately will determine how you are viewed by your client. This video explains.
There are three ways you can be positioned in the mind of your client. Here is how you can be viewed:
As a Low End Lawyer
This is the lawyer who prices himself at the bottom of the market. This strategy appears desperate and it is based upon the (false) assumption that volume is a good thing. Lawyers who compete solely on price always end up overworked, burned out and unhappy. This is not a good law firm marketing strategy for the long run.
As an Average Lawyer
If you charge what everyone else charges you will look like everyone else. The exception to this rule is if you have other differentiating factors that will set you apart and you want to grow your share of the market. The "market share" strategy is only effective in the short term. Eventually, you competitors will copy your strategy and everyone will look the same again.
Choose this law firm marketing strategy carefully.
As a High End Lawyer with an Exclusive Clientele
You should differentiate yourself well and charge more than anyone else would ever dare to charge. Your law firm marketing must communicate a clear competitive advantage. You must overwhelm your client with service. You must be a good lawyer.
If all of these elements are in place, this is the best strategy of all.
Your law firm marketing must be reflective of the position you hold in the market. If you are a high end lawyer, you cannot advertise on bus stop benches and roadside billboards. Everything you say and do in your law firm marketing either helps or hurts your positioning. Keep that in mind as you make your marketing decisions.
A well positioned law firm does not need to negotiate fees. Marketing helps you develop that position in the market. This is the reason why law firm marketing and fee negotiation go hand-in-hand. This video describes how you can make fee negotiation irrelevant for your law firm.
Ways to avoid fee negotiation include:
Package Your Services
Including other services in with the service the client requests is a great way to add value to your offering. For example: A client asks for a will and you include a durable power of attorney, a living will and a trust. The fee is higher but the value is greater. If other attorneys quote just the one document you can help the client see the value in (and the need for) completing all four.
Compare Your Fee to the Hourly Model
Hourly fees lend themselves to the commoditization of legal services. This is not good for the attorney or the client. When you quote your flat fee, you can compare it to what other hourly attorneys would charge.
If the matter would take you 10 hours and you would normally charge $350 per hour, your client would have paid $3,500. If you quote anything less than that, the client is getting a bargain.
Offer Unlimited Questions for a Brief Period of Time
Offer your client the opportunity to call you with questions on an unlimited basis for a fixed time period after the matter is completed. You can put a maximum on the total duration of the interaction but the client will perceive significant value in having access to you - even for a brief period of time.
Include an Annual Review
This is a great way to add value to your offering and develop a relationship with the client. Include an annual review in with you work. Each year you will review the work you did for the client and update it if necessary. You can also "throw in" a review of other documents or matters to determine if they need to be updated. If they do, you have some additional work you can do (and bill) for that client.
There are several ways to position your services in your law firm marketing. These will all help you avoid negotiating fees under any circumstances.
It is ridiculous that hourly billing is so firmly implanted in the minds of lawyers that anytime billing is not done that way it is considered ALTERNATIVE. Legal marketing should help you create a relationship with your clients and it should help you stand out from the crowd. This video explains what I mean.
Hourly billing makes you a commodity. It also puts your services on par with folks who punch a time clock for a living. (There's nothing wrong with that kind of work but that's probably not what you had in mind when you went to law school.) It forces the client to find ways to minimize his interaction with you because he knows that every ten minutes the meter clicks and he has to pay more. In short, it promotes an environment of distrust.
In case you have not guessed by now, my approach to legal marketing is to get you to do things that are different and better than everyone else. Billing is a great way to differentiate your law firm. There are dozens of different ways to bill clients. Isn't it time you came up with a few?
