Legendary investor Warren Buffet is on the hunt. He’s looking for information on any company with strong management and an understandable business that wants to be acquired. IBM Chairman Louis V. Gerstner is charging ahead too—he just increased his company’s ad budget by 17% when many technology customers are reducing their spending.
Why are these business veterans so optimistic when the economic forecasts are so gloomy? Because they know the secret: the best time to build a base for the future is during an economic slowdown—when companies are in trouble and need someone to rescue them. Like great stock investments, the best and most lasting client relationships are not made during boom times—they’re made during difficult times when clients need the most help. And, for many companies, the difficult times are now. Here are 13 tips for swimming against the tide during the economic slowdown and building a base for your future:
Tip#1: Embrace and profit from change. Instead of denying reality, recognize that the economic slowdown is just one of the many changes that are part of business and life. While your competitors are looking for ways to cut costs internally, sharpen your focus on your clients and the ways in which you can help them overcome the challenges caused by the slowdown. Be curious. Make learning about your client and new developments that will affect them part of your daily routine.
Tip#2: Train your team. While your competitors are restricting their training budgets, find ways to reduce costs in other areas so that you can increase yours. Focus on client development and relationship management skills—including win-win pricing and cross-selling strategies. An economic slowdown coupled with the proliferation of multidisciplinary practices and the reduction in the use of outside counsel by Fortune 1000 legal departments, make the development of these legal marketing skills critical to the success of law firms and their individual attorneys. Today, it is assumed that every law firm has more than enough competence to handle a prospective client’s legal matters. What separates the winners from the losers are the intangibles that stem more from marketing muscle than legal intellect.
This means conducting meaningful interviews with prospective clients, drafting winning responses to RFPs, making successful client-focused presentations, structuring win-win pricing arrangements and demonstrating a true commitment to client service and relationship management. Success in today’s economy is about getting clients to see your firms’ attorneys more as trusted partners than as commodity-peddling vendors.
Tip#3: Become an expert at helping your clients navigate the slowdown. You’ve been writing articles and giving speeches, but are you paying attention to the ways in which your audiences’ needs have changed during the slowdown? If you’re not sure, call a few of your best clients and ask them how the economic slowdown is effecting them. Read the publications that they read. Not only will this help you develop solutions for these existing clients, it will also help you develop a new marketing message—one that you can begin to deliver through networking efforts and reputation building activities such as speeches, articles and seminars. Even the slightest adjustments in your message can have a dramatic impact on the way in which potential clients perceive you.
Tip#4: Be selective. Focus on the right opportunities. While your competitors are chasing too many business opportunities, be selective and only target the opportunities that meet your selection criteria. You’ll save time and wind up earning more money from the right clients.
Tip#5: Be a master of alternative fee arrangements. During economic slowdowns, your clients are under increased pressure to reduce costs and still get quality results. As a result, take the time to thoroughly understand the various forms of alternative fee arrangements. Know when they make sense and when they don't. Make it your goal to fairly allocate risks and rewards so that you achieve a proper balance between client satisfaction and your own profitability. This ensures that both your firm and the client emerge from the engagement knowing that their respective best interests have been served. This is the key philosophy behind any lasting client relationship.
Tip#6: Make budgeting mandatory for all significant matters. Understanding what it costs to deliver legal services will put you in a better position to structure win-win pricing arrangements with key clients.
Tip#7: Find a way to get it done. When times are tight, the importance of your being the “go-to partner” and not the “can't-do lawyer” become magnified. During slowdowns, clients want creativity. They don't come to you so you can tell them what they can't do. They want to get it done and they want to know how. Instead of saying "we can't do that," ask more questions and clarify your clients' objectives. Then, do everything you can to find a legally sound way to achieve them. Make yourself invaluable during the slowdown and you’ll reap the rewards during the recovery.
Tip#8: Don’t reinvent the wheel. While your competitors are trying to squeeze every last nickel from low margin business, look for ways to group standardized legal opinions and boilerplate work product into an affordable package for your clients. Don’t wait for you clients to ask for this. Anticipate their needs and then make sure your clients and prospective clients know about these packaged services. They will appreciate your candor and repay you by giving you more challenging and profitable work when the economy recovers.
Tip#9: Staff projects wisely. Again, don't wait for your client to tell you. Pay close attention to how tasks are divided between in-house staff and outside lawyers and, unless you've been told otherwise, always try to allocate the best possible resource at the lowest possible cost to the client. Consider outsourcing in areas such as temporary staffing and legal research during peak workload periods. Pass the savings on to your clients. Continue this practice when the economy recovers—staff for the valleys instead of the peaks. You will minimize the need for workforce reductions during the next slowdown because you did not over-hire during the expansion.
Tip#10: Empower and invest in your support team. During a slowdown, your support team’s ability to help or hurt your client development and relationship management efforts is magnified. The way team members answer the phone, the speed at which they respond to client requests and the quality of their work are critical moments of truth during which your clients form an impression of your firm. Because your clients are under increased pressure, their impression of your firm during a slowdown will carry more weight over time than their impression of you when the economy was booming. The fact is, whether or not they’re conscious of it, at some level your clients want to know that when times are tight, your firm delivers.
Facing their own economic pressures, many of your competitors are cost cutting in areas such as support team training and client service. Don’t make the same mistake. Your people are your most important asset—especially during a slowdown. Now is the time to sharpen your focus on your support team and boost their skills and morale. Identify the skill sets of each member of your support team and put them in positions where they can work hard and succeed. They'll care more deeply about doing good work and make your job easier. Most importantly, your client will be the ultimate benefactor.
Tip#11: Take ownership of problems. During a slowdown, pressures are strong and tempers are short. As a result, it’s only natural to see an increase in the number of client concerns or complaints. Reverse this trend by heightening your sensitivity to your clients’ circumstances. In the face of a problem with a client, avoid placing blame. Assume responsibility and focus on solving it.
Tip#12: Help your clients become rainmakers. When the economy falters many of your clients’ businesses are hurting as well. Find ways to help them boost their revenues. Get creative. Make an introduction. Use your network. Chances are, you know someone who could use the products or services of your clients' organizations.
Tip#13: Be a part of your clients' business plans. If you've developed strong client relationships a slowdown is the best time to turn those relationships into valuable business. This means reviewing your clients' business plans and making them your own. It means knowing how your clients' organizations breathe. Dig into the financial forecasts, sales goals, competitive forces, industry trends and, applicable government regulations. Find ways to do more than just provide legal services. Find ways to help your clients solve their most difficult problems and achieve their most ambitious objectives. Sharpen your focus during the downturn and the lucrative business opportunities will multiply during the recovery.
Conclusion. You have a choice, you can be at the mercy of the market and let it decide your success as an investor and as a rainmaker. Or, you can empower yourself by developing valuable skill sets and taking steps to move against the tide so that you can prosper in good times as well as bad. It’s not easy bucking the trend. But, if you think of yourself as the rainmaking version of Warren Buffet and put on your buying hat during this slowdown, you will capitalize on what could be your best opportunity to seize new business from your competitors and solidify long-lasting relationships with your current clients.
Felice Wagner, a former practicing attorney, is CEO of Sugarcrest Development Group, Inc., a D.C. firm that gives seminars and training programs throughout the country on business development and client loyalty. She can be reached at (202) 462-7046 or firstname.lastname@example.org. Want to see how you measure up as a rainmaker? Take the Rainmaker Reality Check today!