- Law firms need to be laser-focused on providing value to clients
- Industry go-to-market strategies help firms overcome obstacles that may prohibit clients' success
- Core industry leadership teams should continuously ask broader teams for feedback
When it comes to client engagement, law firms tend to lead with their strengths. Unfortunately, that means they sometimes focus more on what they’re good at than what a client potentially needs.
“For example, if a law firm is working with a hedge fund and this law firm happens to have a really fantastic intellectual property (IP) department, they may think it’s a great idea to introduce their superstar IP lawyer to this hedge fund client,” says Bruce Alltop, Principal at LawVision and former Director of Sales at Ernst & Young.
“That meeting, in reality, is a huge waste of time for the client, because hedge funds don’t create a lot of intellectual property and really just don’t need that type of service,” says Alltop. “Bringing that service to the client’s attention is really just a way to talk about the firm, which is known in sales circles as a ‘nuisance idea.’”
To help law firms effectively engage with clients, First Republic is proud to share tips from Alltop, who has spent 25 years in-house as a sales and marketing professional, including nearly 10 years as an AmLaw 100 Chief Marketing Officer.
We spoke to Alltop on best practices for scaling law firms through go-to-market strategies. By developing an industry go-to-market strategy (also known as a “vertical strategy”), law firms can focus on their clients’ priorities and ensure that solving clients' business issues is their first and foremost concern.
Defining target industries and teams
Over the past nine years at LawVision and preceding years as Director of Sales at Ernst & Young, Alltop has helped build 75+ go-to-market teams and hundreds of go-to-market plans for law firms. Broadly, developing industry go-to-market strategies is about defining which industries or verticals a firm should target. It's also about understanding client objectives within those industries — including how they make money — and finding ways to overcome obstacles that may prohibit a client’s success.
“This approach ensures that the firm’s objectives are aligned with clients’ objectives,” says Alltop. “Each industry segment or market sector has its own set of challenges, so it's critical to understand what the hot issues are for each in order to help them address those issues."
There are several initial steps to developing industry go-to-market strategies.
- Define industries of focus and narrow them into subgroups. Review your top 100 clients over the past year, sort them by industry and select the top 3-5 industries by revenue percentage. For a law firm with a broad general practice, for example, the five primary industries may be Life Sciences, Healthcare, Real Estate, Hospitality & Construction, Retail Distribution & Manufacturing and Financial Services & Insurance. (Sectors like Real Estate, Hospitality & Construction are grouped together as they tend to have similar business issues that law firms can solve. Firms should let the common business issues drive how they create industry sectors.)
- Break sectors down into subgroups that have their own sets of unique business issues. Life Sciences, for example, can be broken down into groups such as Biotechnology, Medical Technology and Pharmaceuticals. (Pharmaceuticals can even be broken down further into “Generic” and “Branded” subgroups.)
- Create teams of professionals to service each industry and subgroup. “The team members should represent the areas of practice that are germane to that particular industry,” says Alltop. To create them, review how the revenue for your top 100 clients (segmented by industry and subgroup) plots against various industry practice groups. The patterns that emerge in the grid will give you some indication as to whom should be on each go-to-market team. (For example: If just one in 30 clients in the Financial Services sector has recognized revenue from the Tax practice, a tax lawyer should not be on that team, because it was an apparent anomaly — whereas if 20 out of 30 show Real Estate transactional revenue, a real estate lawyer should definitely be on that respective team.)
“Let the empirical data drive your initial decisions to staff the team with a cross disciplinary group of people,” says Alltop. “Also, each one of your teams also needs to have someone from the Marketing Department on board — and their job is not to simply take meeting notes. This professional is someone who should be expected to provide strategic direction and counsel from a marketing, business development and relationship development perspective.”
Establishing leaders and channel partners
When determining leadership for each industry team, it's important to select individuals with deep expertise in their respective sectors.
“I cannot overstate that the leader must understand the respective industry,” says Alltop. “That sounds pretty simple, but what actually happens more often than not is that the leader is chosen because of their political weight, their leadership skills, or maybe they have available bandwidth. Those traits are nice to have, but some of the best teams are led by people who are introverts that simply know their industry inside-and-out — or in a best case, the lawyer may have worked in-house in that particular industry and then moved into a law firm.”
Once teams and leadership are in place, firms can start segmenting clients by size: emerging growth (small), middle-market (medium) and key account (large). Then, they can build out the channel partner relationships to help their firms solidify and grow their network in a particular industry.
“The way to think about a channel partner is that you are establishing a relationship with one individual and they're giving you 'channel' access to their contact network or their book of business,” says Alltop.
Bankers, accounting professionals, real estate brokers and other law firms that don't provide the same services as you (but need those services in the jurisdictions you serve) all make strong potential partners. Once established, nurturing those channel partner relationships is essential to getting referrals.
“Stay top of mind with the people who matter,” says Alltop. “Channel partner relationships are very important to your long term sustainability.”
Keeping the firm moving forward, together
Ultimately, your channel partners are also joining the networks of individuals that can help provide value and overcome obstacles for your clients.
But few problems can be solved if an industry go-to-market approach is treated as an ongoing initiative, rather than a strategic priority for a set period of time. This approach needs to be recognized as the way that the firm is going to market — long-term. Involving the broader groups involved in each industry at the firm, and asking them for feedback, is essential to making go-to-market strategies successful.
“The industry go-to-market team is comprised of a core leadership team of six to eight people, and then there is the broader team that, depending on firm size, may include 100 lawyers and consultants. The core leadership team does the heavy lifting in the form of identifying strategic priorities and developing an action plan on behalf of the broader firm industry team,” says Alltop. “It’s never about excluding anyone. It’s all about inclusiveness.”
Ideally, the industry team leader will hold a quarterly briefing, for those interested in being on the broader industry team, sharing the work that the core leadership team has done developing strategic priorities, identifying competition and delineating tactical activities and their owners, according to Alltop. “Included in that briefing would be what is planned to be done over the course of the next three months. Then the leader should ask that broader group — and it could be 150 lawyers sitting in the room — if they have any comments or suggestions on planning priorities or the direction that the team is headed.”
“Be sure to be inclusive by constantly asking for feedback from that broader industry team, so that they feel like they have skin in the game,” says Alltop. “Not doing that is a very common mistake that firms make.”
If you define your industries of focus, establish a go-to-market team, develop strategic priorities and create an action plan, you can grow your firm as a true partner for your clients.
For more information on industry go-to-market strategy development, read Bruce Alltop’s posts on the topic on the LawVision blog. For information on how First Republic can help you, contact us.
The views of the interviewee of this article do not necessarily represent the views of First Republic Bank. This information is governed by our Terms and Conditions of Use.