Oregon State Bar Bulletin — JUNE 2005

Client Quest
More and more firms turn to business development models
By Cliff Collins

When veteran lawyer Milt Stewart started devoting most of his time to his firmís business development in April 2001, he knew of only one other counterpart to his position nationally.

"Almost no one had a business development person. There are four or five dozen (firms) today," says Stewart, business development partner with Davis Wright Tremaine.

Nationally and in Portland, more and more large and specialty firms over the past two to three years have been hiring people in-house to do professional development, both lawyers and non-lawyers. Others are contracting with outside consultants or sales trainers, or reorganizing their marketing departments to handle this function.

"It is a national trend," says Robert E. Hirshon, chief executive officer of Tonkon Torp and 2001-02 American Bar Association president. And not just large firms, but also those with 30 to 40 lawyers, are choosing to add business development staff, either part time or full time, he says. "The reason: greater control over quality and cost."

Some firms point to the cost of hiring a designated employee for business development, he adds, but what those firms should not overlook is the cost of lawyersí time. Whatís important, says Hirshon, is to allow attorneys to spend their valuable time doing what they do best: practicing law and serving clients.

"Any attorney attuned to law firm trends knows that the next big thing in marketing is sales, and that it is already here in many firms," says Bev Davis, chief operating officer of Jordan Schrader. Most small to midsize firmsí approach is to use outside consultants, she explains, either in a contractual capacity for coaching or for one- or two-day training seminars.

"Law firms tend to not want to invest in that type of function," Bill Campbell, chairman of Ater Wynne, says of business development. "We kind of distrust the sales process still. We donít want to think of (firms) as businesses." But Ater Wynne became an early firm to take the step of adding a business development staff person, hiring Mike Parrott, a certified financial planner with a background in venture banking, in April 2003.

Some lawyers are naturally good at marketing, while others are good lawyers but not adept at marketing, explains Campbell. And "even the best can only be intermittent at it," because lawyers get involved in big projects and donít have the time, he says. The more specialized a practice becomes, the less time lawyers have left to devote to marketing, he says. "We like lawyers who are really good at being lawyers not to feel guilty at not being a natural marketer."

Law firms are following the lead of accounting firms, who have been employing business development for some time, says Davis. "Marketing is planning and positioning, and sales activities are those that lead directly to work coming into the firm ó closing the deal, if you will." Lawyers need to approach sales as helping the client discover unmet needs, and "moving the potential client to action: hiring you," she says. "We call upon the traditional skills lawyers have of probing and analyzing. They use those in the sales vein, uncovering information and trying to help people."

"Good sales is good service, and good service is good sales," reasons Scott D. Jensen, business development director for Stoel Rives. It is a process of building relationships, he says. "We want our clients to, when theyíre playing golf, say, ĎHere, call this person. They know the law. You will get the best services.í"

Not everyone is suitable for business development for law firms, emphasizes Parrott. A "hard-sell"-oriented individual such as one who has sold cars or peddled time shares is decidedly not a good fit, because law firms do "relationship sales," he says. "People buy legal services based on relationships. They need to go into that relationship confident they will get good services."

Professional services traditionally viewed sales per se as unprofessional, and a contingent within most law firms remains resistant to business development as a function of the firm. But Jensen believes his background in working for an accounting firm helped him be able to relate to partners in a law firm. Part of acceptance is generational, says Hirshon, and Jensen says Stoel Rives is "having some younger associates work with me, to be trained in business development philosophy," so that later on, they will be able to pass along their own acceptance.

Campbell says business development people canít think of law firms as just another business. "It takes a special kind of sensitivity to come in and understand how law firms are unique." They can teach sales principles while still being respectful of the traditions of law practice, he says.

Scott W. Staff, business development director for Perkins Coie, sees the creation of a dedicated business development function within firms as part of an evolution of marketing. Marketing has gone from writing biographies and brochures to "a much more sophisticated enterprise," which now includes client service interviews, market research and branding, he says.

Lawyer acceptance of the function varies by firm. Parrott, who describes Ater Wynne as "a very entrepreneurial firm," found "a subset of attorneys willing to work with me. Some bring me in, some I bring in" when working with clients. When Parrott works with clients, "I become a partner with the specific lawyer in their effort to obtain, develop or retain a client." Over time, his job has moved more toward organized efforts to retain clients.

Still, business development in law firms is new and remains unformed, says Parrott. He was hired for an "experimental position" with "no guidelines," he says. "Everybodyís testing their own model, because thereís no template."

Some business development directors have responsibility for wide geographic and numerical ranges. At Perkins Coie, with 14 offices and over 650 lawyers, Staffís charge is firmwide, but he concentrates principally on the West Coast offices. Stoel Rivesí Jensen also has responsibility firmwide: He spends 40 percent of his time in Portland, 20 percent in Seattle, and the remainder in Boise, Salt Lake City and San Francisco. "My biggest challenge is being spread too thin," Jensen says.

Davis Wright Tremaineís Stewart must cover nine offices, 430 lawyers, 21 practice groups and 13 client teams. He has met individually with 300 of the firmís lawyers, and met six or more times with more than 100 of them.

"I try to be in all our offices as often as I can be," he says. "Iíve been on the road every week this year. I love getting to our offices," which include Portland, Seattle, Bellevue, Anchorage, San Francisco, Los Angeles, New York, Washington, D.C. and Shanghai, China. "By phone video conference, I attend as many practice group (meetings) as possible," he says, groups such as those devoted to tax, corporate, securities and employer law.

Stewart thrives on working with individual lawyers and seeing them blossom and grow. He believes every attorney can learn to build relationships and clients. He says many lawyers see the model of a rainmaker, someone who is "a scratch golfer, remembers names, speaks and writes, and they say, ĎI canít do that.í" He tells them they donít have to be that, and tries to convince them that they can find their own way to contribute without fitting that stereotype.

"In most law firms, as much as 80 percent of work is brought in by rainmakers," Stewart says. "But I think your law firm is a lot better and stronger the more people are brought into" building it. "Whoever they are and whatever they enjoy, they can contribute their attributes." He holds practice groups accountable for following through, takes attendance and gives grades, which have some impact on compensation.

Stewartís role differs from other Oregon firms in that he is a partner in the firm. When he began in the business development role, it took about one-third of his time. Now it takes about 80 percent, but he still enjoys keeping his own clients and developing other ones. "Itís important to eat your own cooking," he says.

He works closely with the firmís 14-member marketing staff, who, like him, report to the managing partner. He says having a business development partner, rather than a non-lawyer director or manager, fit the culture of Davis Wright Tremaine: "Clients hire lawyers, not sales professionals." In contrast to some in his position, "I do no cold calling," says Stewart. "I donít lead or attend client meetings. I am much more of a coach."

Stoel Rivesí Jensen views his own role as not being behind the scenes, but one of participating with the firmís lawyers in client meetings. "Youíve got to be a player-coach," he says. "Direct client contact is what Iím about. You have to be prepared; you have to follow up." He sees his task as finding what clients need and how to deliver those services to them. "Iím not here to sell something to clients that they donít need."

Perkins Coieís Staff focuses on national client service, both understanding clientsí needs and appropriately targeting by industry "those we are not representing that we have the capabilities" to represent. His approaches are to work with client service lawyers on improving relationships with existing clients; work with partners in developing new clients; and "independently be alert in the marketplace to discover opportunities to provide service."

At Tonkon Torp, Bree Metherall became business development manager last October, after working in firms in California, including Latham & Watkins. She describes her current role as "a many-headed job, encompassing traditional marketing functions; overseeing PR and ad programs, events and seminars; and now bringing a more strategic eye to the business development we do ó training, teaching, client relations programs, charitable giving ó so that everything we do is aligned with the firmís growth."

She works individually, too, with many of the firmís 68 attorneys. "Some of the individual one-on-one work I do is helping them develop a strategic development plan that plays to their strength," Metherall says. "Itís traditionally not part of the education they get. In some cases, they come without those skills. Some develop them and pick them up naturally; some need more help."

Tonkon Torp CEO Hirshon notes: "In a firm of five or six lawyers, everybody understands that business development is important. When you get larger," such as from 14 to 21 lawyers, "you find a division of labor occurring in law firms," where people branch out into roles of rainmakers and mist-catchers. "As firms get larger, you find some are better at business development."

Once the firm is no longer a small organization, some individuals canít simply "pick up and learn" as part of the normal course of practicing, he points out. In a firm of 50 to 70 members, most arenít exposed to all aspects of the firm, "especially the business side," and thus must "approach this in a more organized way."

Some aspects of business development, such as websites, are new, Hirshon says, and "some havenít changed: being an expert in your practice and letting people know that you have that expertise." Where a business development manager can help is in functions such as responding to requests for proposals, which he calls a more recent phenomenon in Oregon that has been around nationally for a decade.

This involves when an entity such as a corporation or the city sends out an RFP and says it will interview two or three law firms, then choose one for representation depending on cost or approach. Such "beauty contests" happen about once a month, he notes, and firms must decide which RFPs to respond to and which to ignore.

"Someone in-house can help put together a response, but to get to the second level, you construct matrices internally to decide" which RFPs the firm has a 10 percent chance of obtaining, and which it has an 80 percent chance, Hirshon says.

"As these client-driven approaches become more apparent, it is imperative for firms to get their house in order."

ABOUT THE AUTHOR
Cliff Collins is a Portland-based freelance writer and a frequent contributor to the Bulletin.

© 2005 Cliff Collins

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