Data is everywhere. Insights? Not so much. Today, law firms are awash in data. In fact, many would even say that finding insights that matter is more difficult now than decades ago. If anything, more data has made things more confusing--more analysis on more things without a coherent narrative. Some call it DRIP: Data Rich, but Information Poor.
While M&A and lateral hiring continues among law firms, there is another path to growing client relationships--using big data and predictive analytics to identify clients with the highest potential and actions to drive organic growth of those relationships. This approach helps the firm grow by better understanding and delivering what clients need and want.
Two of the most critical questions many law firm marketing professionals are trying to answer are:
Which clients hold the key to our growth?
What can we do to build those relationships?
Knowing what percentage of clients have the most potential and what actions can grow those relationships can lead to high organic growth that helps the bottom line. Despite the potential, firms devote teams of people and millions of dollars each year across marketing and business development activities knowing that some will work, but not which ones or how much. As a result, firms can end up with significant client churn--potentially 20-30 percent of the previous year's fees leaving the firm as a result of clients going elsewhere or bringing the work in-house. This then forces the marketing team (and ultimately partners) to make up the loss on top of adding even more clients to achieve growth.
The difficulty with identifying the clients and actions that hold the most potential is there is a massive amount of information coming from sources who often contradict each other and don't directly lead to a more significant client relationship.
We get information and ideas daily from client relationship partners and even clients themselves, but what we find is that these often don't grow our relationship into other practices or types of legal matters.
One challenge can be taking cues from multiple partners, clients themselves (when they can get their input) and analysis that is too simplistic to discern what clients will really pay money for. This can lead to a complex go-to-market strategy. The result can be a lot of guesswork in choosing where to spend resources (e.g., publishing? CLE? chambers? cold pitches? client alerts?). Some firms end up doing too...