Why Law Firms Are Turning to Non-Lawyers For Sales HelpMarch 5, 2014
In a profession that once banned advertising, law firms are rushing to embrace something truly radical: a sales culture nurtured by non-lawyers like Gregory Fleischmann. Not everyone thinks it will work.
Just over a year ago, Baker & McKenzie LLP tapped Mr. Fleischmann to be director of global marketing in its Chicago office, luring him from Deloitte LLP, where he led marketing for the Big Four accounting firm’s health care consulting practice.
“At Deloitte I actually went out and sold business,” he says. “Baker & McKenzie wanted to do what Deloitte was doing, in a nutshell.”
Law firms are reacting to customers who have learned how to strip out components of legal work and value them accordingly, an unbundling of services that echoes what hit the computer industry decades ago.
As they take on more risk from savvy clients demanding flat fees and other alternatives to the standard billable hour, law firms are acknowledging the need for better project management by appointing pricing directors, proposal managers and analysts.
They’re hiring vendors such as Chicago’s Akina Corp. to train lawyers to sell, and adding “client-facing” sales executives with no legal industry experience, both to call on prospects and to coach lawyers to do so.
“What we’re doing, it’s in its infancy. We’re trying everything,” says John Hurley, DLA Piper U.S. LLP’s chief business development officer, who rose out of the firm’s venture funding group and once had his own business development company.
Of 15 Chicago firms surveyed by Citi Private Bank’s law firm group, a majority still rely on lawyers to conduct business development. But spending on client marketing and promotion by the 15 firms last year rose 11.5 percent, triple the increase for all expenses.
The legal industry pocketed just 83.5 cents for every dollar billed last year—a nadir since Peer Monitor, a Thomson Reuters unit, began tracking the stat seven years ago (see the PDF). According to the ABA Journal, hiring flattened as early as 2004. And times could get worse before they get better for law firms that depend on work from corporate clients. Fewer general counsels this year than last expect the economy to improve, according to Corporate Counsel magazine.
The challenge for business developers such as Mr. Fleischmann, 45, is that results are more difficult to predict—and thus market—in a profession that deals in verdicts and other chancy outcomes.
Sidley Austin LLP, like Baker another global law firm that started in Chicago, is responding to 60 percent more client requests for proposals than it did in 2009. Sometimes the process means figuring out what kind of low-margin work is necessary to keep high-end relationships.
“What’s happened, the buyers have become smarter than the lawyers,” says Bill Flannery, president of WJF Institute, a sales-training firm in Austin, Texas. He depends on lawyers and law firms for three-fourths of his clientele.
Over the past three years, Baker & McKenzie’s North American business development operations have grown 20 percent, to more than 40 people, according to Louise Muldoon, the unit’s Chicago-based director. Among the significant hires is Dan Weisberg, who joined as proposals manager from another Big Four firm, Ernst & Young LLP.
ROOM TO GROW
Mr. Fleischmann wasn’t sure he wanted to leave Deloitte when a headhunter called. It meant moving from New York and retracing 10 to 15 years of ground plowed by big accounting firms, old hands at hiring non-CPAs to sell audits, systems installations and other work.
His concern was understandable. “The legal market has not accepted third-party salespeople the way the accounting firms have,” Mr. Flannery says. As a result, says Ann Lee Gibson, a law firm consultant in West Plains, Mo., “people who are really good at doing this in law firms are pretty rare.”
In a recent Georgetown Journal of Legal Ethics article, “I Didn’t Go to Law School to Become a Sales Person—the Development of Marketing in Law Firms,” consultant Sylvia Hodges writes, “Traditionally, lawyers believed that their knowledge and expertise spoke for itself, and it would be a sign of defeat to start marketing.”
That attitude is changing, says Mr. Fleischmann, who handles business development and marketing for a dozen practice groups at Baker & McKenzie: “When a marketer is able to demonstrate real expertise and achieve tangible results that directly benefit lawyers, those lawyers come to see the marketer as a professional peer. It gets you beyond the commoditization of legal services.”
Storytelling is important to salesmanship, he says, and to this task he brings a varied background. A childhood interest in Zen Buddhism and “Karate Kid” movies led to Japanese-language jobs in New York as a TV news director and radio talk show host. In 1994, Mr. Fleischmann segued to marketing and promotion, joining a firm run by his stepfather, Larry Cerri, a former road manager for the Temptations.
Sidley’s chief marketing officer, Barry Solomon, says law firms are stepping beyond marketing and business development and adding a third staple from corporate America (where he also has worked): product management.
He says that while lawyers don’t call it that, they have been utilizing its principles, applying research to design and sell services and to determine their useful life cycles.
“But they do this without much help from staff today,” Mr. Solomon says. “This is analogous to lawyers always doing marketing but only in the last few decades working with staff to help them in that area.”
DLA Piper also has reached across industry lines in doubling the number of business development personnel over the past two years. “Their job is to take the largest clients and expand them across the platform,” says Mr. Hurley, who’s based in Reston, Va.
In Chicago, it hired Elisa Primavera-Bailey, 55, from “peer-to-peer” networking firm Vistage International, and Mindi Kaploe, 41, who had been at website developer Hubbard One Inc. and Thomson Reuters. Ms. Primavera-Bailey, however, lasted only eight months, departing recently for reasons unrelated to qualifications or performance, according to David Mendelsohn, DLA Chicago office managing partner. (Neither woman will comment.)
Still, Mr. Hurley thinks that lawyers will remain paramount to business development.
“What I’ve learned along the way—most successful salespeople are lawyers who don’t practice anymore,” he says. “They build instant credibility and trust; they’re carrying a degree. The second thing is, they can talk with clients and prospects in a very educated way. They understand who to bring in to make something happen.”