Do you want a will with that? The subtle art of cross-selling

Despite many Australian law firms ignoring the prospect of cross-selling, such a business-growth strategy can be easily implemented in firms, writes Trish Carroll.

Australian law firms, unlike the nation’s banks, seem to have little need to worry that their cross-selling tactics will land them in hot water, because they barely exist.

That is according to research conducted by Julian Midwinter & Associates in October 2016 for the Australasian Legal Practice Management Association. The research involved 123 firms from Australia and New Zealand, with about a third being small (up to $3 million annual revenue), a third being mid-sized ($3 million to $10 million) and a third having revenues of more than $10 million. The findings? Half of the participating firms did not have a plan for either generating referrals or cross-selling, and only 29 per cent rewarded or recognised business generated through cross-selling.

The top five barriers to cross-selling were identified as:

• a lack of a formal strategy or plan for cross-selling: 53 per cent
• no accountability (e.g. no one responsible for managing cross-selling): 40 per cent
• an absence of sales skills or knowledge: 37 per cent
• not being part of lawyer KPIs: 36 per cent
• no revenue targets for cross-selling: 34 per cent.

Call me crazy, but these barriers are very easy to eliminate if the firm’s leadership is willing. It is just a combination of collaboration, information sharing, training, putting in place some simple processes and setting some targets.

The firms participating in the research are relatively small. One of the huge advantages smaller firms have over larger firms is the ability to be more nimble about engaging everyone in practices to make the firm more successful. I recall, with affection, facilitating planning days with smallish firms, often outside of capital cities, where everyone in the firm was invited and participated. The energy in the room was palpable when we discussed ideas about how to grow the business and the various roles every individual in the firm could play.

Bank on these scenarios

Back to the banks, I expect some lawyers would look at the activities of the banks, and the Australian Securities & Investments Commission’s directive to eight banks to carry out independent reviews of cross-selling, and feel validated about their choice to not engage in cross-selling. However, it was the way the banks went about it that has caused the problem, rather than cross-selling being a bad idea. Quite the reverse. It is every lawyer’s responsibility to bring ideas to their clients when those ideas are in their clients’ best interests.   Let me give you a few very simple examples of what I mean by that.

• You have just acted for a client on a divorce matter and this, of course, means their situation has changed. Is it not appropriate to suggest this would be a good time to update their will and explain why?
• A review of the wills you keep in safe keeping shows that 40 per cent have not been reviewed for 15 years. Would it not be appropriate to contact those people and suggest that a review and possible update might be in order?
• An elderly client’s spouse has died and your client is considering selling the family home. Would it not be appropriate to enquire about what they are planning to do; for example, moving to assisted care or to a nursing home? And, if so, suggesting that a review of the contracts these moves require would be worthwhile?
• A long-time, and reasonably well-off, client tells you their accomplished and high-earning daughter is getting married. As you chat about this you get a sense your client has some concerns about the future son-in-law. Is it not appropriate to suggest to your client that the daughter considers entering into a pre-nuptial agreement?

Change your terminology

Let us ditch the term ‘cross-sell’ because ‘cross-serve’ is more accurate as firms should be all about serving the needs of clients. Sometimes you need to anticipate those needs, rather than waiting for your clients to know what they need.  Putting yourself in your client’s shoes and understanding the catalysts in their lives, or their businesses, and changes in the law and suggesting that it is prudent to do something about it is part of your professional responsibility.  Some would argue this is cross-selling; I would argue that it is doing a good job of looking out for your client’s best interests.

If this sounds sensible then it also makes sense to put some discipline around these activities; for example, identify the catalysts that trigger needs for your clients and have an intentional and proactive plan that kicks in when these trigger points are looming.

Take appropriate actions

Analyse your client base to understand which clients are likely to be nearing the identified trigger points and get on the front foot by taking suggestions to them in an appropriate way. By appropriate, I do not mean a Twitter announcement about it being “time to update your will”. Such a communication channel is unlikely to work. Depending on the trigger, it is much more likely that the contact with your client needs to be by voice. Use the phone; it is a more effective communication channel than ever now that everyone is inundated by emails.

I doubt lawyers or their front-line staff are ever going to get to the stage of mirroring McDonald’s ubiquitous “would you like fries with that”, but there are many appropriate ways to serve your clients better by showing them you really do know them. You need to know the touch points where it is right and professional for you to suggest actions they should consider taking.

Trish Carroll is principal of Galt Advisory, a consulting firm that helps law firms create value for their clients. Email trish@galtadvisory.com.au with any feedback or questions.