The concept of business development is one which all aspiring solicitors should understand and take an interest in. What is business development and why is it so important for law firms?
From a candidate’s perspective, business development should be seen as one aspect of the buzz phrase, ‘commercial awareness’, which involves understanding the business context in which law firms operate. Though a multi-faceted concept, business development is essentially the strategy which firms adopt to raise awareness of their services, win more work and, ultimately, grow their practices. The concept spans client relationship management, marketing, bringing in work or ‘rainmaking’ and the future business plans of firms. A business development plan might include a firm opening an office in a particular region, hiring a fee earner or bolt-on team specialising in a new area of law or seeking a merger partner. The key is for firms to have a clear business strategy and align their staff behind this strategy, constantly monitoring how far objectives are achieved.
So why is business development so important for law firms? Significantly, the legal market has undergone palpable changes since the onset of the 2008 financial crisis and the resulting challenges have been unprecedented for both the UK and global economy. Firms today are operating in a fiercely competitive, post Legal Services Act market and hence business development is increasingly prominent. Challenges include, inter alia, pricing pressures; the growing sophistication and movement of clients; supply of lawyers outstripping demand; increased regulation and legislative changes; technology advances; and new entrants. Such challenges have resulted in firms having to adopt a more business-like approach, as law firms are businesses which are susceptible to market pressures and must therefore keep a close eye on profitability, financial performance and workflow. Troubled firms have looked to restructure their business models and modernise in recent times. Some firms have sought out merger partners, while others have looked beyond the UK market and considered expanding overseas, utilising the opportunities brought by globalisation. Despite advertising restrictions on law firms being relaxed in 1986, it seems that there had been some reluctance from firms to focus on marketing or promotion prior to 2008. However, the post-recession market has witnessed a significant shift from firms presenting an apathetic and reactive attitude to adopting a more proactive stance by investing into their business development strategy. Business development methods today vary from firm to firm- some may employ an in-house marketing team, while others will outsource work to agencies or allocate roles to solicitors within their firms. There is now an obvious need for a strong business development plan and for legal practices to differentiate themselves and leverage their unique, firm-specific strengths in order to subsist, let alone grow, in today’s competitive market.
Business development can encompass a range of techniques. To my mind, the most basic, yet essential form of business development is for a firm to build a strong reputation and maintain and nurture existing client relationships. Doing a good job the first time round encourages word-of-mouth marketing through referrals, testimonials and recommendations, in addition to the opportunity to cross-sell services to existing clients. Loyal and satisfied clients are likely to come back and hence lateral partner hiring can be very lucrative, as partners may bring with them a loyal client following. In addition to this, firms should closely monitor existing sources of work, in order to understand how their clients are hearing about them and capitalise on the opportunity to gain further work through such avenues, or indeed ditch any advertising that is not having an impact. Client feedback is also an essential way for a firm to improve its legal services and, accordingly, gain more instructions, which firms might seek through feedback forms or sophisticated client relationship management (CRM) programmes.
Networking is a means of developing a law firm’s business by becoming recognised as an expert in law. Networking can increase the visibility of a firm and develop a network of key contacts, for example, through attending business networking groups and industry events. This can be effective regardless of seniority, as sociable and passionate trainees can utilise their enthusiasm by becoming ambassadors for their firms.
Online marketing is a vital platform for firms and in recent years there has been a shift from traditional methods of advertising to firms building more direct relationships with clients online. Social media is a cost-effective forum which enables people to connect, converse and exchange content; and in this market it is vital for firms to become part of the conversation. Firms are spoilt for choice when it comes to expanding their ‘social reach’. They could set up a corporate page on Facebook displaying their latest news, provide updates on legal developments by microblogging on Twitter, advertise on YouTube or set up discussion groups on LinkedIn. Blogging is also advantageous, as firms can create unique content to engage their audiences. Further, search engine optimisation (SEO) enables firms to raise awareness of their businesses on the Internet and reach more prospective clients.
Sharing knowledge can also help firms reach out to broader audiences. For example, a firm could look to gain presence in the media read by its clients by adopting a public relations strategy. Solicitors could write informative articles or speak at seminars about legal developments. Such activities can enable a firm to showcase expertise in a subtle, yet effective way.
Business development also stems to the creation of a firm’s brand and logo, corporate website and advertising campaigns. Advertising may be online or in print, such as advertising in newspapers and trade press.
Though non-exhaustive, these are a few of the key techniques used by firms to implement their business development strategies.
As an applicant, I observed that talk of business development pervaded the law firm recruitment process. At networking events, open days and vacation schemes, you might notice firms describing their strategy going forward, new markets they seek to tap into and industry sectors in which they plan to develop expertise. At interview, expect to be asked about what area you think a firm should focus on developing, the business decisions you would take as managing partner and where a firm should open its next office. Look out for whether a firm has recently been appointed on the legal panel of a household name client, hired a high-profile partner or been involved in a landmark or reported court case. When approaching a law firm, adopt a business-savvy approach and demonstrate an interest in where the firm will be going in the next five years. As opposed to treating this as a tick-box exercise, remember that taking an interest in business development will be mutually beneficial. Demonstrating that you are interested in business development early on will show firms that you might just be a worthy return on their significant investment in you as a trainee. Simultaneously, you should want to be part of a profitable and forward-looking firm which will afford you exciting opportunities and prospects upon qualification. Therefore keep abreast of a firm’s future plans, but also look back retrospectively to gauge how responsive it has been to market pressures.
When you begin your legal career, consider utilising opportunities to become involved in developing your firm’s business. As a trainee at Hanne & Co, I have had the privilege to contribute to business development as a member of the firm’s marketing committee. I have found business development and marketing fascinating and hugely rewarding in an entirely different way to fee-earning work. Taking part in these activities affords the chance to make a tangible contribution in a creative way, by identifying new prospects and making proactive suggestions. Therefore I believe that trainees and junior lawyers should involve themselves in business development as far as they are able to, as this will not only afford the chance to develop strong business acumen, but also enable them to help shape their firm’s futures.
Trainee solicitor at Hanne & Co.