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Pick your poison

by Joe Kaczrowski | Oct 14, 2015

The Practice Management and Marketing Section hosted an interesting session today on effectively and ethically selling legal services featuring MSBA members Bill Gschwind and Shaun Jamison. Many lawyers understand the need to market their services, but the session focused on the often overlooked but critical step of actually closing the deal, a perhaps uncomfortable but necessary part of running a successful law practice.

One of the takeaways from the talk was that if your close rate is not near 100%, you are not making the most of your (limited) marketing budget. Close rate would be the number of leads that turn into clients, so if 100 people walk in your door and 20 become clients your rate would be 20%.

Lawyers spend a lot of time (and money) marketing their services. If you aren't effective at closing the deal and converting leads into clients, those limited resources are not being deployed as optimally as possible. Failing to close cannot, arguably, be rectified by pouring more money into generating leads. However, that may not exactly be accurate. While it's true that your cost per new client will be high, you may be able to find the same number of new clients by spending more marketing dollars regardless of your effectiveness as closing.

Lawyers may not like math, but the process can be reduced to a series of computations, where changing the inputs can suggest multiple possible strategies to achieve the desired outcome. For instance, through any number of analytic tools available, you can track how many impressions you get for your marketing dollars. You also likely know how many of those impressions led to leads. Any two numbers can give you a ratio, so you can see at what rate your impressions are converted into leads. Similarly, you should know how many of your leads or contacts turn into clients, and again, can determine the relevant ratio.

You can do the math, but the point is that there are a number of variables in the equation. You get X impressions for Y dollars (X/Y), and Z leads come from X impressions (Z/X). From Z leads, you get C new clients (C/Z). These ratios give you any number of data points, including close rate, cost per lead, and cost per client (in terms of marketing dollars).

As they say the definition of insanity is doing the same thing and expecting different results. If you continue doing what you've been doing, the ratios should not change. If that's the case, then to increase the number of new clients you need to spend more marketing dollars (increasing Y increases X, which increases Z, which in turn increases C). However, if you can change the underlying ratios (ideally improve them), then C increases without a corresponding increase in Y (more clients without spending more money).

So while it is true that you can increase the number of new clients you get without improving your ability to close, you are not maximizing your limited resources. That is, however, a strategic decision. Perhaps money is less of an issue than your comfort level with selling your services; whatever the reason, there are other options. However, to get the most bang for your buck, lawyers need to be able to not only market their services but also be able to close the sale and turn leads into clients.

As you look to improve your ratios, there are options to increase your X without a corresponding increase in Y (more impressions without more cost). Clio recently shared a list of ten places lawyers can advertise for free on the internet. Of course services like Avvo and Yelp made the list, but Clio also referenced your local bar association and guest blogging. The MSBA offers a free directory for members to find potential clients in MN Find a Lawyer, and many of the MSBA blogs are open to guest posts from members. A practiceblawg post from this spring made a few other suggestions as well.

As with anything, there is a cost. Occasionally it may seem that a client or case just falls into your lap; however, if you think about it, you can probably trace that client back to some expenditure of time or money in the past. Even with free options like those listed in the Clio article, there is a cost. Your time is valuable (and limited); like your money, you want to deploy it as effectively as you can. As Shaun and Bill talked about today, getting better at selling your services and closing clients can help you maximize your resources.