Your software and database programs
capture critical information that can help you develop a plan for future business
development that will increase your revenues and your profits. Yet, few law firms take
advantage of their existing data by using it strategically.
Data, such as the client referral
source, the client industry and client matter, linked to the clients with the largest
revenues can be a blueprint for future marketing efforts. For example, a list by attorney
of top revenue generating clients in descending order for 2000 sorted by referral source
industry and the client industry, points to where the marketing should be targeted.
An attorney determines that half of
his or her revenue is generated from referrals of CPAs. This attorney should be marketing
to CPAs. Through data mining, the attorney analyzes the clients industries and sees
that 25 percent of the revenue is generated by video game companies. The attorney who is
familiar with the nuances of this industry should find it easier to attract clients in
that industry as opposed to one in which s/he knows nothing. And its more efficient
to market by industry segment than it is to conduct general marketing to all industries.
Not only should annual data be
analyzed, but data should be compared from year to year to determine trends. A growth in a
particular industry could signal opportunities for an attorney. For example, one year of
revenues generated in a particular industry yielded a 25 percent growth from the previous
year. The next year the growth was 50 percent and the following year it was even more. The
firm saw an opportunity that they wouldnt have recognized if they werent
mining data. They decided to focus on that work and today enjoy a thriving and profitable
practice in that industry.
Most law firms have a substantial
amount of data that can provide attorneys with historical information, which is crucial in
making decisions about the future. The data can help in developing strategic plans,
business plans, projections and budgets. However, one of the best ways to use the data is
in marketing plans. Furthermore, last years results can be compared to previous
years to determine trends.
Data can be sorted in
the following ways:
descending order of revenue
percentage revenue for each client and make sure that no one client generates more than 10
percent of revenues. One client that generates more than 10 percent can be dangerous if
the client decides to bring the work in-house or leaves the attorney for some other
in descending order of revenue
Identify the referral
sources that refer the largest percentage of revenue, so they can be cultivated further.
One attorney was shocked when she found that over one third of her revenues were generated
through one referral source. She decided to spend more time with this referral source to
ensure that she was receiving as many referrals as possible.
Client industry in
descending order of revenue
Clients segmented by
industry can indicate areas of focus, around which the attorney can build an industry
industry in descending order of revenue
This data highlights
the industry where top referral sources are located. If past clients are generated from
other attorney referrals, for example, then target attorneys for future marketing.
Type of work
(matter) in descending order of revenue
This data indicates
what type of work was performed. Attorneys can develop an expertise in a specific area of
work based on their past experience. For example, one attorney discovered that the
majority of his work was shifting to a new area. He realized that there were more cases in
that area and decided to aggressively market the area through articles and speeches.
The data can be
analyzed by using revenue figures or the number of clients. In most cases, the results are
very similar. There are some instances where one client may generate the largest revenue;
however, attorneys shouldnt develop a strategy based on only one client. In this
case, the number of clients should be used for the analysis.
events generate clients instead of referral sources. For example, attorneys may get
clients from articles or speeches. These events should be tracked as well, so that the
attorney can determine if they are worth duplicating. One attorney gets clients from a bar
association speech and so she continues to give the speech each year.
Once the data for
2000 is sorted, it is compared to data from 1999, 1998 and previous years to identify
trends. While historical data doesnt always indicate future paths, its one of
the best ways to determine whats worked and whats not working. With good
databases, this information can be analyzed quarterly as well as semiannually.
future marketing cant solely be made as a result of internal data analysis, but are
tempered by external forces as well. For example, attorneys with estate planning practices
that may decline with elimination of the estate tax, need to examine other complementary
areas upon which they can focus. They may be able to find an area that has an upward trend
in their practices during the past few years.
Some attorneys build
a new database for the analysis each year. However, by customizing software and linking
databases and software together, attorneys can develop reports that can be easily
generated for analysis.
Attorneys only have a
discrete amount of time to market, so allocating resources appropriately is important.
Tracking and analyzing data can provide easy answers to the interrogatories: who, what,
where and how to market in the future, which can increase revenues. And since the
marketing efforts are focused, based on data analysis, profits should increase as well.
Technology can be a great asset in marketing when data is captured and analyzed.