Law firm marketing: increase your revenue by grading clients

friday, 15 may of 2009

Law firm marketing: increase your revenue by grading clients

by Henry Harlow

Managing your client base is the most important aspect of your law firm marketing efforts.  I suggest you begin with grading your clients.  

The ABCD Solution

In looking at your client base for marketing purposes, you can use a time-tested method of analysis. This is the key concept of ABCD clients. Service professionals of many types use this method to accurately rate and organize their client base. And for effective marketing for law firms, this method is priceless. By the way, it is not just about marketing. It is also about serving your clients better than ever.

As you know, in schools we use the letter grading system to rank the students in order of how well they perform on papers, tests, quizzes, and so on. Similarly, we will grade our clients. So think of your client grading system as summing up all the aspects of a good client.

A client who gets an A would be one who has reasonable expectations, follows your instructions, appreciates the work you do, and is courteous and professional in their demeanor both with you and your staff.  (In fact, if you ever wonder if someone is an A client or a D client, just ask your staff.)  

The A client sends you referrals who turn into A clients as well. The A client is never concerned with your fees, since they know your services are worth the cost. They pay their bills on time all the time. And finally, their cases are interesting and substantial matters. Now, isn't this the kind of client you want?  

Additionally, have you ever heard the old saying "birds of a feather flock together"?  This means your A clients know a lot of other A clients they can refer to you. 

Of course a client with a B grade would have many of the same qualities as the A client, but not all. A client with a C grade would be close to a D client. A client with a D grade is the complete opposite of all the characteristics of an A client. They pay their bills late, complain about your fees, try to negotiate lower fees or retainers, don't follow your instructions, think they know better than you do, are rude or unprofessional, do not produce referrals (or if they do, they are also D clients), and do not have substantial and interesting cases.

C and D clients are not the kind of client you want to attract.  Most firms find that C and D clients take up sixty to eighty percent of their time and efforts, while bringing in only twenty to forty percent of the firm's revenue.  Does it make sense to cultivate C and D business?  Of course not.  You need to stop accepting C and D business and fire (ethically, of course) any C and D business that you can.  Even if you begin only with the Ds, it is a beginning. Quite liberating also my clients report. 

Effective marketing for law firms includes a realistic look at what will bring the best benefit for the best clients. Ridding yourself of clients who are graded C or D is one of the best things you can do for your A and B clients. Without spending all your time on the C and D problems and concerns, you can pour your attention into your A and B clients and move their matters to conclusion faster, allowing you to accept more As and Bs as clients.  The A and B clients will be even more satisfied, resulting in more referrals and more business from them. Clearly a win/win for all.  

Another big advantage of spending less or no time on your C and D business is you can focus more time developing your A and B referral network. Your increased marketing time and more focused law firm marketing will result in more quality A and B business. 

Working individually with over 500 attorneys, I have found that most lawyers need to limit their practices to one, two or maybe (and I do mean maybe) three practice areas in order to drop the C and D cases.

Too many attorneys practice threshold law, which means they take anything that crosses the threshold of their office.  In selecting your practice areas, try to incorporate cross-salable areas, such as wills and trusts, real estate, and/or estate planning. 

In summary: Select your most lucrative practice areas and then pour your law firm marketing efforts into those targeted practice areas while focusing on A and B clients and referral sources.  This may be a bit frightening at first, but in the long run, you will be extremely pleased with the results.


Pulished in Trey Ryder's weekly Lawyer Marketing Alert.