Law Firm Business Development: The Race You Don’t Want to Win
The practice of law is a win/lose proposition. You want and need to win clients. You want and need to win cases. The race to the top is predicated on wins. But there is one race you don’t want to win when it comes to business development for your law firm: it’s called the race to the bottom. And that is the race you’re running if you are competing on price.
Author Bob Burg, who wrote Endless Referrals, says that when you compete on price, everyone loses. You lose because in lowering your price, you are taking on work for which you will not be paid what you are worth. Plus, time spent on unprofitable business is time away from servicing profitable accounts.
Your client loses because you cannot afford to service them properly. There is no point in adding value that you’re not being paid for. And if your race to the bottom is successful and you go out of business, you won’t be there to help them anyway.
If you have prospects that pressure you on price, you have failed to communicate your value. Most people do not make a purchase decision based solely on price. If you do have someone who tells you they are only going with the lowest cost lawyer, then refer them to a competitor immediately and tell everyone else in your office to do the same.
Of course, the price of your legal services will be a part of your intake discussion as prospects expect to have a handle on the cost of their legal matter. It is important that you control this conversation carefully by asking your prospective client about all their decision-making criteria in choosing a law firm. Once you understand the factors that will go into their decision, you can address each one, clearly outlining how you can add value for each factor.
To help keep the tire-kickers from wasting your time, the best thing you can do is to create an ideal client profile for your firm and communicate that profile to everyone involved in the intake process.
If you are a B2C attorney, your ideal client profile should be a detailed description that includes income level, profession, gender, age, and other important demographic details. If you are a B2B attorney, specify business size in terms of revenues, type of industry, legal specialty (employment law, real estate, litigation), etc.
As you qualify prospects against your ideal client profile, educate them on how you work, what they can expect, how you charge, and what you expect of them as clients. If they voice objections, then they are most likely not a good fit for your law firm.
Train yourself and your intake staff to sell on value, not price, and you’ll avoid entirely that race to the bottom where no one wins.