For most commercially focused professional services firms, upward of 80% of their revenue will come from around 20% of their client base. With most of a firm’s revenue coming from existing client and referrer relationships, these key relationships are critical to a firm’s success.
If you consider the cost of losing one of your top 10 clients, or even one of your top 10 referrers, this can have a significant impact on your firm’s revenue.
Systems and Processes
Despite the importance of managing and protecting key relationships, many firms still do not have a formal key client or referrer management program in place.
Many firms will have systems in place to manage inbound enquiries from their website, yet they will not have systems in place that focus on managing and protecting key clients and referrer relationships that drive the largest portion of their annual revenue.
Mark Woolley, Principal at McInnes Wilson Lawyers states “Our commercial teams receive the majority of their instructions through our referrer network. Staying in front of referrers and remaining front of mind is essential. This has highlighted for us the need to have a more structured and traceable process for managing key relationships. Client Sense has provided us with the necessary tools to manage and track those relationships.”
The Accuracy of Information
One of the times that a firm tends to be confronted with the fact that they do not have an accurate list of who they know, is unfortunately when a Partner leaves.
In my experience, when a Partner was to leave a firm, the Managing Partner would come around to IT, to have us ‘urgently produce a list’ of that Partner’s key contacts. Would our IT team look through the Practice Management or CRM systems as you might expect? No, not if we wanted a comprehensive and up to date list. We would look to the firm’s email and meeting communication records, because these records are both up-to-date and accurate. Almost all key clients and referrers would have had some email correspondence with the firm, yet often only 30% or 40% of these key contacts, will have been entered into the firm’s CRM or Practice Management system.
Knowledge is Power
For a large number of legal and accounting firms, it was Covid that highlighted just how inaccurate and incomplete their key client, contact and referrer records really were. When all management needed was a simple list of the people they should communicate with, many firms were not able to produce a list of the individuals and companies that they had communicated with in the last 12 or 24 months.
On the flip side, those firms we have had the opportunity to work with, not only had immediate access to a live and up-to-date list of who they knew, but they were able to easily and accurately identify which clients across the firm had not yet been introduced to certain practice groups . Clients with no prior communication with the firm’s Employment, Commercial, Property Leasing, Insolvency or Debt Recovery teams could be easily identified and appropriate steps taken. A range of approaches were undertaken, including email introductions, targeted mailouts and invitees were handpicked for appropriate webinars and events. These firms were able to create a solid pipeline of work based solely on their existing relationships.
It’s not what you know, but who you know
If you have seen a firm-wide email such as ‘Does anyone know anybody at Company X?’ then you have witnessed the absence of up-to-date relationship information. Relationships can certainly drive revenue, but only if you are aware that you have them.
Rory Muscat, Business Development Manager at Coleman Greig Lawyers states “The key to growth within a professional services firm is building long term productive relationships and ensuring you have the right tools to keep you on track with staying in contact; either through a CRM, your own calendar or using a tool like Client Sense. Remembering that people will buy from the people they trust and like, these tools will assist to stay front of mind and build and grow the relationships, when used properly and integrated into your daily activity.”
What lies ahead for Professional Services
None of us know what the next 12 or 18 months will look like. What is clear though, is that those firms that are able to identify, manage and protect their key relationships, will be best positioned. These firms will not only be the ones that clients and referrers turn to, but they are much more likely to receive the more critical, strategic and profitable ‘bet the farm’ work when it arises.
Not all firms will benefit from the ongoing shift in market needs, but for those firms with a strategic view over their key relationships, being in the right place, at the right time, with the right people, will be no accident at all.