A Closer's Coffee

As a legal recruiter I always ask law firm attorneys to tell me about their sales and marketing activities. I consistently hear from those without business that they have no written plan in place, and they fit marketing activities in where they can. Like anything worthwhile that we have accomplished in life it takes time, effort, intelligence, planning, priority, and a heartfelt commitment to be successful.

Last week we discussed the importance of written goals, and how their influence in our lives can be significant if we refer to them on a regular basis. The limitation of having a goal such as “collect $2million in 2011” is that it is nothing but a high bar. Some may find this motivating, others de-motivating. This is where metrics come in. Metrics measure the activity levels at key points of the rainmaking process and establish benchmarks required to meet our revenue goals.

Do your public speaking engagements produce inquiries for your legal services?
What percentage of your inquiries do you close for pitches?
What percent of pitches become retainers?

There are two aspects to each parameter in the rainmaking chain of events. Quantitative: are we doing enough to make it mathematically possible to achieve our goal? and Qualitative: are we doing well enough with the opportunities before us? In other words, we track numbers and percentages of each key parameter in the chain between inquiry and the collection of legal fees. Once we know our percentages at each critical juncture of the chain, it becomes a cinch to calculate or reverse engineer what sort of numbers we will need to attain in order to hit our revenue target.

Your firm is undoubtedly already tracking some of these activities such as dollars billed, dollars collected, realization rate, duration of outstanding bills, hours billed to clients, dollars originated, and the like. Where law firms tend not to track data is on the front end of the rainmaking process. It is up to us to do this if we want to achieve a higher level of success.

Professional sport provides a compelling example of the importance of metrics. In the NFL for example they track such metrics as average yards per carry, average yards per passing play, turnovers, sacks, third down efficiency, time of possession, etc. Ira Miller wrote on NFL.com that his survey of 10 coaches looked at these following statistics:

Yards per pass attempt Pro football is a passing game, no question, and the proposition is that if you win the passing game, you win the game
Field position after kickoffs Not the yardage on the returns, but the actual starting position of each drive. Call this “hidden yardage”
Red zone scoring efficiency We all know what that means — completing a drive by scoring, preferably a touchdown. Not just scoring in the red zone, but how many points
Big plays Not all coaches define them the same, but in general, it’s a run of at least 12 yards and a pass play of at least 20. The bigger the chunks of yardage a team can gain, the fewer chances there are to mess up on a long drive

Metrics are measurements of activities that lead to goals. If we want to achieve a goal of increasing collections by 20% implied in these goals are a series of underlying activities that we will need to accomplish. What’s more there is a chain of events that needs to occur in order to finally close that retainer check. It probably goes something like this in your practice:

• Speaking Engagements: With qualified professional audience
• Magazine/Blog articles published
• Business cards collected: from qualified consumer of legal services such as President, CEO, General Counsel, or a person who has made a referral to you; This parameter shows your effectiveness in meeting the right people at professional conferences
• LinkedIn contacts: Like business cards collected only count the qualified additions toward this metric
• Touch calls: to clients, referral sources, and prospects; track this parameter because you need to stay in touch at a regular weekly, monthly, quarterly intervals
• Inquiries (when a potential client asks you any sort of legal question, or asks about retaining your services) We produce inquiries from various sources that may include referrals, Internet, networking, speaking engagements, advertising, telephone touch calls, and the like. It is important to track the origin of every new inquiry and refer to this particularly when a new matter is opened, billed, and collected. What is our percentage of converting an inquiry into the next step in the rainmaking process?
• Hours billed to marketing: since we are used to billing our time, we should track our hours too
• Deal/Case Size: by monitoring the size of the cases or deals this metric will also keep us attentive to keeping our goals in view
• Time to close: tracks the time required from inquiry to receipt of first retainer check.
• Retention Rate: tracks the percentage of clients who rehire us for subsequent cases or deals
• Pipeline: number and size of deals that our clients have on the horizon that we have been promised or for which we will have the opportunity to compete; Carefully watch the ratios such as a large percentage of our prospective deals coming from too few clients
• Relationship Deeping activities: To build or maintain your relationship with a client a certain amount of social activities such as meals, sporting events, golf, ski, and so on

Metrics build off one another because they measure points that happen in a chain of events. It may start with a cold approach at a conference where you made a good impression and walked away with a business card of a general counsel. The next day he accepted your LinkedIn invitation. You met him for a lunch, and persuaded him to let you address the legal department and some key executives on new developments in the law in your area of specialization. Later you took your prospect to a baseball game, and for a round of golf. The GC then gave you a small matter as a test. You were subsequently invited in for a beauty contest for a major piece of business. Metrics track and measure your success in jumping through an increasingly higher set of hoops. The process may be abbreviated or elongated but some version of it will be part of vetting process.

Because this process tends to work in a linier fashion it lends itself to tracking these parameters on a spreadsheet. Start with the basic parameters on the left and move right with each key successive point in the development of the client relationship, ending with Amount Billed and Amount Collected. You will begin to notice that there is a strong mathematical relationship between the various parameters you track. You can increase your practice by closing more deals, increasing the size of the deals, or picking the low hanging fruit from existing clients. By tracking the history of each deal you will begin to notice similarities in the histories where your legal fees were paid. It’s like Fantasy Baseball, only a lot more profitable.

Tags: Goals, Metrics, Rainmaking Pipeline, Sales Statistics