Business development in context

In the last ten years, multi-disciplinary firm Dickinson Dees has achieved double-digit growth year on year, and increased staff numbers from less than 250 to over 800. With turnover now in excess of £50m per annum, the firm shares some of the secrets of its success.

By Robin Bloom, Dickinson Dees

Over the past two generations we have witnessed massive change in the professional-services sector and, more specifically, in the legal profession. It was not that long ago that law firms were restricted to a maximum of 20 partners. While this constrained the growth of some of the ‘larger’ firms, it provided real opportunities for entrepreneurial firms to grow their business. The development of a successful legal practice historically depended upon the ability of partners within the firm to develop work for the firm generally. Most firms were, by definition, full service and depended upon the technical ability and personal attributes of their partners to deliver appropriate services to clients firm wide. In short, law firms developed their business on the back of strong cross selling from partners.

Given this background, it is interesting that business development in a legal context is often considered to be:

Public relations;
Corporate entertaining;
Newsletters; or
Seminars.

While all of these may be marketing tools available to legal practices to develop their businesses, there is little doubt that business development in its purest sense still depends upon the ability to build business relationships, whether with clients, intermediaries or business networks.

Notwithstanding the significant growth of Dickinson Dees, we still have a debate over the need to continue to develop the business. If business development is to take place, it is essential that both partners and fee earners buy-in to the importance of developing the business. We have found two effective tools for growing this awareness:

For partners, it’s grasping the concept that there are only two ways of making headroom to accommodate new people. The first is to grow the turnover of the business (profitably) to ensure that when new partners are appointed the profit of existing partners is not diluted. The only alternative to this, if there is a desire to have a career progression for younger aspiring partners, would be partner attrition. We are reluctant to lose our existing partners at Dickinson Dees and therefore are committed to growing the business;
For fee earners who are not partners, we have made it clear that in order to make partner they will have to justify their application in terms of the business they will secure and develop. Our benchmark is that each new partner should, within two to three years of appointment, be responsible for securing or developing at least £750,000 worth of fee income. This applies the mind of aspiring partners very clearly and reinforces the importance of developing the business.

For associates and directors below the level of partners (or aspiring partners), the concept of business development is promoted through the firm’s career-progression criteria and annual appraisal system.

But despite the logic of all the above, it is still difficult to completely lose sight of the historic importance placed on fee-earning targets and technical ability within a law firm.

Our approach is that technically-able specialists are a requirement of the business and that they will make their own contribution to the development of the business by providing an excellent service and securing client loyalty and recommendation, but they are not always expected to develop new business like the traditional ‘rainmakers’. Frankly, there is still the need to realise and appreciate the different skill sets that a diverse partnership requires to be successful. We would, however, adjust financial targets for individuals to accommodate additional business-development activity if this were seen to deliver value.

It does appear that, on occasions, marketing hype can get in the way of affective business development. The old adage is that 20 per cent of your clients produce 80 per cent of your profit.

This is undoubtedly the case for most businesses. It has been suggested that as a result of this companies should concentrate on the 20 per cent. There are a number of dangers with adopting such a simplistic approach. It may well be that those areas that are producing the best results are also experiencing very high activity levels and additional resource may not be immediately available. There seems little point in investing business-development activity in attracting business to areas where resource will not be available to carry out the work. It is equally clear to those who have been in the legal profession for many years that such trends are cyclical and tend to be repeated. Ignoring areas that are not particularly profitable and withdrawing from them, while delivering short-term benefits, may have a negative impact in the longer term. Of course, if the firm genuinely believes that there is likely to be an upturn in a specific area, an argument can be made for devoting additional resource in the hope that this will deliver dividends in the long term.

While seeking not to become over technical in the approach to business development, it does appear that market research can play a significant role in effective campaigns. In basic terms, it will assist in:

Understanding the market perception of your firm;
Clearly identifying who your competitors are; and
Gauging the size and liquidity of the market in which you wish to operate.

While it is clearly possible to engage in relatively sophisticated and expensive outsourced exercises to obtain this information, structured feedback from clients and intermediaries can be equally useful in providing a snapshot of your position.

Having identified the markets in which you wish to develop your business, it is just as important to identify what you want to achieve. In some cases, it may be winning new clients, in others winning more work from existing clients. Equally, you may be looking to compete and increase market share in an already competitive market. Realistically, in order to do this, you will need something that differentiates you from other firms in the same marketplace, be it price, location or quality of service. Alternatively, you may be looking at exploiting a new market. If this is the case, you may be looking at either commoditising a product, marketing a new lateral hire or exploiting new changes in the law.

Realistically, the responsibility for developing business in a law firm must ultimately rest with the partners. But for partners to be effective at developing business they must understand the full nature of the work that is being undertaken around the firm. While it may be preferable to have a relatively tight ‘sales force’, partners must be able to see the bigger picture. This requires effective communication, whether through managing-partner reports, regular lunches, cross-departmental meetings or the annual partners conference. The business-development activity of partners should be critically reviewed through an appraisal process.

It is also important that solicitors and trainee solicitors understand the importance of developing business.

To this end, our junior solicitors have a separate budget from which they are responsible for coming up with a programme of events for their contemporaries. They have, along with others, formed the Young Professionals Forum within the City of London, which is now extremely well attended and hugely popular. We have also sought to reward, by individual prizes of up to £500 per month, outstanding business-development achievements by any member of the firm (save for a partner). By encouraging such activity at a younger age, and ensuring that the criteria for promotion to associate, director and partner all relate to the ability to develop business, it is hoped that business development becomes second nature to high performers.

We not only encourage business-development activity, but seek to offer the necessary training for individuals to hone their skills, whether through presentation, selling and media training, or support through telemarketing, PR and event management. Bluntly, if centrally we can make it easier for people to do those things they find difficult and remove the fear from the process, they are far more likely to enter into the activity willingly.

Ultimately, you need to be able to measure whether or not your business-development activity has been successful. I have already touched upon the need to tie this into partner and fee-earner appraisal. There are more direct measures of success such as maintaining target client lists and recording successes and failures, monitoring key client programmes, and carrying out client-satisfaction surveys whether by questionnaire (appropriate for volume operations) or direct feedback for high-value clients. In relation to the latter, it is a matter for consideration as to whether the most appropriate person to obtain such feedback is the responsible partner or a third party, possibly another partner. There is little doubt that someone who is not directly engaged with the client is more likely to secure candid feedback. Ultimately, however, the best measurement of success for business-development activity is the extent to which turnover and profit have grown.

The question is often asked as to whether or not there are any short cuts that will assist in delivering effective business development. One answer is that there are certainly routes that waste time, money and effort. Ultimately, building the business depends upon the right people doing the right things at the right time. It is essential for partners to understand what their business is doing and what is important to it, so that they can actively seek to develop the business as part of their day-to-day activity. Ultimately, keeping it simple and knowing what has made you successful in the past, as well as retaining your competitive advantage in this regard while reviewing other opportunities, should lead to an effective strategy for business development.

Robin Bloom is senior partner at Dickinson Dees. He can be contacted at Robin.Bloom@dickinson-dees.com.