Biglaw

Beyond Biglaw: The 30/10 Rule

Columnist Gaston Kroub shares a handy rule of thumb for evaluating whether your marketing efforts are promising and likely to result in new work for your firm.

By Gaston Kroub on March 17, 2015 10:14 am

Anyone reading this knows that law is a competitive industry. And it’s very hard to take business from an incumbent law firm, especially when law firms have been conditioned to do everything possible — including offering discounts to existing clients — to retain work. But getting work from new clients, while difficult, is not an impossible task. Others on these pages have discussed the importance of finding a “new” niche, or developing expertise in a legal area undergoing rapid change, as a way of getting companies to consider you and your firm. Developing expertise in a new or changing area of law is definitely one of the better way to displace incumbents. But that is just the first step. You also have to “project” your expertise to the market, and have a plan in place for taking advantage of any opportunities that come your way as a result.

Projecting expertise can be done both internally at your firm and externally. Internally, through discussions with fellow partners regarding your capabilities, and the firm’s marketing department to discuss ways of making sure the broader partnership and existing clients are aware of them. Externally? Through the familiar channels, whether it be giving CLE, writing articles, or attending conferences. There are plenty of resources a lawyer can consult in order to determine what types of “marketing” tactics they can and should be using. I do not need to add to the din here.

At the same time as there is a cottage industry that exists to teach a regular lawyer how to turn into a rainmaker, there is often little guidance offered to attorneys about what really needs to get done to bring in a new client willing to try a new firm. Whether you are offering a “new” set of legal services in a developing area of law, or trying to crack into a client already represented by another firm in a traditional practice area, having a game plan for taking advantage of any opportunities your marketing efforts generate is critical. And an important part of that game plan is understanding your “value proposition”; one surefire way to do so is to convince the prospective client that by going with your firm they will be getting a great value for their legal spend.

Measuring “value” is a difficult task, best done on a case-to-case basis, because what a client sees as value is often highly subjective. But there is room to consider a handy rule of thumb for evaluating whether your marketing efforts are promising and likely to result in new work for your firm. We can call it the 30/10 rule.

The hypothesis is that firms that can offer their clients 30% better “service” at a price 10% lower than the competition are likely to find some commercial acceptance as a reward for their marketing efforts. I saw a reference to this “rule” in an article I read recently, where an entrepreneur was explaining how he was able to get traction for his business selling disaster recovery services to small businesses on a subscription basis. As he articulated it, in order to compete with the incumbents, he had to remain laser-focused on building a disaster recovery platform that solved the needs of his clients 30% better than their other options. But that was only half of the equation. He also needed to price it 10% less than the going market rate in order to turn the value proposition for clients considering his service from “interesting” to “why wouldn’t we sign up with this guy.” Importantly, he also recognized that his willingness to take a longer-term view with respect to his dedication to the 30/10 rule, in order to build a sustainable business, was an important contributor to his success.

Again, it is not easy to define what 30% better “service” is in our profession. The 10% cheaper part of our proposed rule is easier to define (though I submit that one of the problems plaguing the industry is misguided discounting attempts by firms — intent on passing off the same or inferior services at cut-rate prices — that serve neither the client nor the firm well in the long run). But I think that it is worth it for each and every one of us to think about ways to improve the services we offer to our clients, while anticipating needs that our clients may not even know they have yet. There is no guarantee that any of us will stumble on an innovative new service offering that will create a brand-new revenue stream for our firms, but we don’t necessarily need to. Maybe incremental improvements to the “traditional” ways of doing things, through the application of newly-available technologies, for example, would be enough to shift the “service” portion of the 30/10 rule in a particular firm’s favor — and maybe even allow the firm to displace some incumbents and attract new clients. I know my firm is constantly challenging itself to think along those lines. I hope yours is too.

Please feel free to send comments or questions to me at [email protected] or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique. The firm’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at [email protected] or follow him on Twitter: @gkroub.