Conscious Cross-Selling — or Why What Your Partners Don’t Know Can Hurt You
At the end of 2023, BTI Consulting Group released its yearly in-depth look at the legal services market, “BTI Practice Outlook 2024: Navigating Legal Spending and Needs in the New Unpredictable World.” BTI’s report (and follow-on webinar) suggested an increased demand for outside counsel hiring, predicting that this area of legal spend is on track to set another record in 2024. The anticipated growth is being driven by increased regulatory concerns, the rapid adoption of technology—including generative AI—across industries, employee activism, and the need for companies to be both resilient and innovative in the current economy. The report identified six industries (high tech, pharma, financial services, health care, private equity and food/agritech) and six practice areas (labor and employment, cybersecurity, commercial litigation, bet-the-company matters (including regulatory enforcement matters), class actions and intellectual property litigation) that BTI predicts are poised for rapid growth in legal spending.
Based on research interviews with general counsel and chief legal officers, the report also concluded that while clients are open to hiring new firms, there is a desire to give more work to a core group of their existing firms, in what BTI is calling “quiet convergence.”
This market presents an opportunity for firms that are willing to focus on deepening and broadening relationships with existing clients by providing more and different services. —in other words, firms focused on cross-selling.
And, of course, it comes with the risk of losing business for those firms that aren’t.
Cross-selling is actually one of the easiest and most efficient business development tools for maintaining and growing law firm revenue.
It’s also a win-win situation for everyone.
From the firm perspective, the more integrated a firm is with a client and the more varied the services it provides, the less likely the client is to unwind the relationship to move to another firm. From the client's perspective, the more and better a law firm understands the range of legal and business issues the company faces, the more cost-efficient the counsel and representation it receives from its lawyers will be.
Yet cross-selling remains a challenge for many firms.
Why is this?
A couple of principal elements tend to be at work.
One is the competitive compensation structure of the traditional law firm model, in which client “ownership” is directly tied to annual compensation, compounded by the current legal landscape, in which many firms grow through the lateral acquisition of lawyers and practice groups (and their books of business). Relationship partners are loath to expose their clients to other lawyers within the firm for fear of losing a share of their personal revenue—or worse, losing clients should their colleagues move to another firm and take the clients along.
Conscious cross-selling is actually the perfect antidote to this perceived problem of client defection. A more integrated client is a more loyal client. With proper client relationship management by the original relationship partner, cross-selling actually becomes a win-win-win. Clients get better service from everyone, making them less likely to move firms. The relationship partner develops a deeper understanding of the full range of the client’s needs and becomes the person who can deliver on them by bringing in the right people to help. This further cements the client's relationship with that lawyer. And more work for (and more fees from) a particular client can mean more income for both the relationship partner and the other partners who service the client in new practice areas.
As a labor and employment practice chair, I know once explained, “This goes beyond ‘a rising tide lifts all boats.’ I want my colleagues to understand that I can and will put more money in their pockets if they introduce me to their clients.”
A second element that often makes cross-selling a challenge is a lack of confidence in a colleague’s ability to serve the client and the related fear (perhaps from personal experience) that, instead of cementing client loyalty, exposing clients to other practitioners in the firm might damage the client relationship or even cause the client to leave altogether.
Again, conscious cross-selling is the perfect antidote to this perceived problem. The more you know and understand about your colleagues’ work, the more comfortable you’ll be cross-selling them to your clients. And vice versa—the more your colleagues know about you, what you do, and how you do it, the more comfortable they’ll be introducing you to their clients.
Conscious cross-selling works best with a top-down firm commitment to encourage it and a strategic, high-level vision of the best avenues and opportunities for the firm.
Effective cross-selling also requires some groundwork. Here are some tips for effective and conscious cross-selling.
View your colleagues as collaborators in your marketing.
Your colleagues can be very efficient emissaries to get your marketing message out to potential clients. They have direct and regular access not only to their existing clients but also to a whole world of potential clients that you may not even know exist. In order for them to be effective emissaries for you, you have to provide them with the right information to answer an essential question: Why should we hire your colleagues?
Understand that your colleagues don’t know as much about your work as you think they do.
I’m often surprised to hear lawyers I work with say “everyone in the firm knows what our [fill in the blank] practice does.” Not only is that generally not true—in part because of the siloed nature of law firms—but it’s a very dangerous assumption that often prevents the kind of communication that fuels successful cross-selling.
Consider the example given by a litigation practice chair I recently helped with a cross-selling presentation. “The emails I hate to receive because they’re so disheartening,” he said, “are those ‘please pardon the interruption’ emails from other partners in the firm, asking for a referral outside the firm for work that we handle for clients on a regular basis.”
You’d be surprised how often that happens.
Provide your colleagues with the right talking points.
You know everything about your practice area. Your colleagues are (or should be) experts on their clients—their goals and objectives, their business challenges, and their current legal issues. Your cross-selling should be focused on giving your colleagues the right information to transmit your marketing message.
They need enough information to issue-spot—to identify business and legal challenges where you might be helpful to the client. They also need the essential nuggets of information to speak at a high level about what you can do for the client—enough to introduce the concept of you and your practice and get the client’s buy-in to meet with you. After that, it’s your opportunity to win—or lose.
Make it easy for your colleagues to refer you.
Your digital presence—including your website bio and LinkedIn profile,—is key to the vetting that potential clients do before they even pick up the phone or agree to meet with you. These digital resources are critical to your colleagues’ ability to comfortably talk about you and your practice to clients. Make sure they are up to date and well written and, most importantly, help your colleagues answer their clients’ number one question: Why should we hire your colleagues?
Don’t wait for a formal invitation to talk about cross-selling.
Yes, cross-selling is an important business development tool that should be addressed at a firm-wide level, such as at partners’ meetings or annual retreats. But opportunities to cross-sell don’t need an invitation. Start the conversation with your colleagues today, and perhaps your presentation at the next partner meeting or retreat will be on cross-selling successes.
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