Many long months have now passed since the initial impacts of COVID-19 were first felt in Australia. Whilst initially many firms experienced an increase in revenue, most firms have since recorded revenue decreases in either May or June. It is reasonable to say that the forecast for the new financial year 20-21 remains uncertain at best.
As expected, you and your firm will likely have sought to reduce your expenses such as premises, IT and staffing overheads, even if there may have been an increase in the short term on technology spend to accommodate remote working. However possible it may be to minimise expenses, spend can only be reduced so far. As many law firm leaders will be acutely aware, ultimately your firm will need to focus on increasing revenue if it is to regain prior profitability and remain viable.
Using your greatest asset
Most professional services firms will closely monitor profit and loss, rarely considering the assets they have. Few firms will consider themselves to have any significant assets, yet they do, and these assets are very valuable. These assets can help you to drive and protect revenue, which is particularly critical in a tough market.
While not as tangible as physical assets, your firm has assets which include the expertise, contacts, clients and referrer relationships that have taken many years to build. These assets are the lifeblood of your firm, helping you to remain afloat as the market tightens and government assistance is pulled back.
Back to the basics
During the COVID-19 pandemic, you and your lawyers will have undoubtedly found yourselves focusing on your clients and their needs. Your lawyers will have spent much of their time helping and advising, as they do best.
The relationships that your firm holds are likely what has led to your firm’s success in the first place. Despite a tighter market, clients will not need less help right now. They will need more. Your clients need people they can turn to, people they trust and people that understand their needs. The relationships your firm holds are now more critical than ever.
Start by considering these things:
Who do we know?
Consider who your firm knows and how extensive its relationship network extends. By way of example, a firm of around 70 staff will typically have active communication with over 5,000 individuals on a monthly basis. These relationships are key to driving revenue, particularly now when few are looking for new providers when trust is more important, and relationships are of greater value.
What services do they use?
- Assess your top 100 clients over the last 12 or 18 months and what services have they used. Which groups have they been in contact with and which have they not been introduced to?
- Look for opportunities to make the appropriate introductions across groups. For example, does a client of your commercial team know you have an employment team and why they need to be put in touch with them?
Do you have dormant clients?
- How many clients have used your firm in the last 2 years that have not used your firm in the last 6 months?
- Have they begun using another firm for all their needs, or is it possible that they have not had a legal need that required your firm?
- What would likely happen if your lawyers made contact with each of these inactive clients?
Are key referrers being overlooked?
- Does your firm rely on key referrers?
- Are these relationships reciprocal, or would a lack of contact from your lawyers start to erode these relationships?
- Would more contact increase the likelihood of more referrals and have you recently checked in or updated your referrers on all that you can provide?
It is equally, if not more important right now, to look at how you can protect revenue.
Are key relationships being managed?
It can be difficult, particularly when your lawyers are working from home, to know that your key client, contact and referrer relationships are being actively managed.
- Do you know who is responsible for maintaining contact with a key individual?
- Do you know when communication has lapsed?
What if you have staff changes in your firm?
In difficult times it can be necessary to let go of staff. This will not only have an impact on those within the firm but will almost certainly have an impact on external relationships.
- Does your firm know which external relationships are held by a staff member no longer with the firm?
- Can you identify quickly and easily which contacts, clients and referrers might be impacted?
- Can you assess who else in the firm may hold a relationship with those external people to help address the situation?
What if your contact(s) are no longer with your client organisation?
Your key contacts may no longer be with a client organisation. How are you alerted to such a change that could have a significant impact on your commercial relationship? Monitoring for external staff changes will help you protect existing client relationships and potentially open doors into new organisations.
If increasing and protecting revenue is of the utmost importance for your firm right now, there are only really 3 things that you should be focused on 1) Relationships, 2) Relationships and 3) Relationships.
Your firm is being tested on many fronts. Your actions and your ability to draw upon your relationship network will determine what profitability and recovery look like for your firm. As the veil of the COVID-19 pandemic lifts and the economic reality hits, the relationships your firm has developed will need to be brought into sharp focus.
Here to help
If your firm does not already have access to the type of information needed to easily identify and actively support your relationship management efforts, then please contact me or the team at FilePro, to find out how quickly and effortlessly Client Sense can help.
Our system and our team have assisted many firms before and we can tailor an approach for you, to ensure your success is achieved ahead of any cost or commitment on your side.
About the author
Steve Tyndall has previously led the IT function for mid-tier Australian law firms and is now the Founder and CEO of Client Sense, a business development and client retention solution that works automatically behind the scenes, collecting the information needed to help firms to win work and keep clients.
Steve presents regularly on Legal Technology with the Queensland Law Society and Law Institute of Victoria, and is a founding member of the Australian Legal Technology Association. Steve can be contacted directly by email at email@example.com or you can connect with Steve on LinkedIn.