Most lawyers view cross-selling the same way millennials view social security. They realize it’s intended for the greater good, but the personal benefits are unclear, and they sure aren’t going to contribute more than what’s required.
Let’s suppose for a second that lawyer pay was determined purely by profit sharing. Now the personal benefits of cross-selling become clearer because the data overwhelmingly supports it.
Cross-selling proven to increase revenue, service efficiency and loyalty
BTI Consulting Group found that the typical law firm has about 23% of the potential business it could be receiving from a top client, and that the right approach could lead to capturing 75% of the available work. All signs point to cross-selling being the “right approach.” Heidi K. Gardner, a Distinguished Fellow at Harvard Law School’s Center on the Legal Profession, studied millions of data points from a cross-sampling of law firms and discovered that cross-selling serves as a revenue multiplier: When a law firm expands client services to two practices, revenues from that client triple.
Cross-selling has also been shown to boost long-term revenue in the form of client retention. Redwood Analytics found that successful cross-selling boosts client loyalty and serves as a powerful anti-poaching mechanism, which makes sense given that more relationships lead to a better understanding of the client’s business. The more areas being served, the harder it is for an outside firm to replicate service. The opposite is also true: Revenue lost to client convergence initiatives is revenue that’s not likely to be recaptured.
Why, then, do cross-selling initiatives continue to flounder?
Rainmaker trainer Mike O’Horo reminds us that cross-selling is really “selling squared.” Before you can even attempt to sell the client, you first need to successfully sell the relationship owner.
“Client trust is an asset whose value every lawyer recognizes and protects,” says O’Horo. “They’re especially vigilant when protecting their asset against potential sales clumsiness by well-meaning colleagues. In cross-selling, your colleague will act much like any corporate gatekeeper.”
O’Horo brilliantly captures the reason why relationship-owning lawyers are reluctant to introduce a colleague:
“If I permit access to my client, three things can happen:
- The client loves you and is grateful for my introduction.
- The client is unmoved either way.
- The client reacts negatively.
Two of these are bad for me.”
Removing the two barriers to cross-selling success
Barrier #1: Lack of motivation
The old axiom in the legal industry is, “what gets rewarded gets done.” If there’s no incentive for a relationship-owning lawyer to collaborate with a colleague from another practice – and let’s be clear, citing general stats about better odds of retention is not incentive enough – then the lawyer will sidestep or outright ignore any cross-selling pitch that isn’t perceived as a sure thing.
Much has been written on recognizing origination and even ideal compensation systems. While there’s no one-size-fits all solution for every law firm’s motivation barrier, all firms can continue to add language that incentivizes collaborative behavior while purging language that prevents it.
Barrier #2: Lack of relationship intelligence
A report by The Ackert Advisory revealed that a quarter of law firms do not use customer relationship management (CRM) at all, and of those that do, nearly half reported that less than 5% of lawyers use CRM regularly.
What this means is that colleagues, partners and business development reps at most law firms cannot access accurate, up-to-date insight into client and contact activities.
Is there any wonder why “sales clumsiness” continues to stand in the way of cross-selling? With this level of insight, how can law firms reasonably expect colleagues or business development reps to approach relationship-owning lawyers with a concrete cross-selling strategy?
The answer is customer relationship automation
The problem with CRM systems is in the last part of the acronym: management. Many lawyers are already hesitant to share details about clients and accounts. Add manual processes and a complicated interface to the mix and you have a convenient excuse for CRM neglect.
By automating CRM, law firms eliminate excuses, because there are no excuses. Meeting notes, agendas, new contacts, contact notes, client notes, insight from external sources and other relevant activities are all automatically synced within seconds by the lawyer or executive assistant.
Now, partners, colleagues and business development reps can look at client and contact records in the CRM to answer several questions before approaching the relationship-owning lawyer:
- What is the most pertinent cross-selling opportunity for this client?
- Is this relationship trending in the right direction or is it at risk?
- Who else has a relationship with this client we can leverage, and how strong is it?
In addition to spreading relationship intelligence across the law firm, the lawyer and team working on the account also benefit from comprehensive data capture. Updated information regarding client activity, matter management, conflict management and accounts receivable status are delivered before scheduled client interactions.
Once the motivation and relationship intelligence barriers are removed, proven results and refined processes work to strengthen the collaborative culture. As Gardner notes in her findings, “Lawyers who have developed the capabilities and confidence to open conversations with their clients about how to add value through collaboration are winning more loyal clients and greater collaboration.”
How much revenue remains untapped at your firm’s clients? See how Introhive helps leading law firms unlock relationship intelligence with ease. Schedule your no-sales-pitch product demo here.Business & Finance Articles on Business 2 Community