What comes to mind when someone mentions collaboration?
Possibly cross-selling, a concept widely recognized by law firms as one of the best strategies for sustainable revenue growth. After all, clients who hire services from multiple practice areas tend to be more loyal and remain with the firm longer, potentially concentrating an increasing share of their legal budget within the firm.
In theory, cross-selling is quite promising, but in practice, it often remains somewhat a distant dream, renewed from time to time in those partner meetings that always address growth, collaboration and cross-selling, but usually with limited effects.
The truth is that multidisciplinary collaboration – a mandatory starting point for any initiative aiming at diversifying the areas and services hired by representative clients – sometimes feels unnatural to partners. Many believe the idea involves aggressively offering something the client is not interested in, which could jeopardize a hard-earned relationship.
Thus, what should occur naturally, organically, simply does not materialize because it runs up against an amalgam of strategic, structural, behavioral, cultural and other issues. But it does not need to be this way. If many firms have already overcome these barriers and are now reaping the rewards of a well-structured cross-selling process, fully aligned with the strategic goals of their corporate clients, so can you and your firm!
Below, I highlight five major barriers to cross-selling that are holding your firm back, along with suggestions to overcome them and drive growth.
1. Lack of trust and “client ownership” mentality
Situation: Resistance to sharing clients is, above all, a trust issue that fosters a culture of “client ownership.” Partners fear that introducing a colleague from another area might result in a low-quality service, damaging a long-standing relationship with a key client. In other cases, partners fear losing control over the “client account,” especially relevant for “portability” purposes. The reasons are varied, but the issue is that without trust in the technical and interpersonal skills of another partner, there will hardly be room to diversify clients. And trust, as we know, needs to be built, not decreed by memorandum.
Possible solution: Start small and promote “auditions.” To reduce perceived risks, a good way to build trust is to promote “experiments” through smaller projects or even internal projects. The idea is to involve partners from a few practice areas, so that mutual trust can be developed in manageable and lower-risk environments before being tested with major clients on robust projects.
2. Silos and lack of internal knowledge
Situation: Another factor contributing to the lack of trust lies in the fact that partners often do not know their own firm! They know their practice areas quite well, of course, but beyond that, only the areas from those partners with whom they have some affinity or common business interests. Furthermore, they have no idea of the depth and breadth of the work performed by the other partners, whether they are in the office right next door or in a branch in another city or country. In such a peculiar scenario, how one can sell what one does not know?
Possible solution: Identify clients served by a single practice area and encourage expansion. With historical financial data, it is easy to identify a handful of representative clients served by just one practice area. The next step is to bring the responsible partners together in the same room to identify potential synergies – clients being from the same industry sector helps with this process – or to circulate these clients among partners in other areas so they can identify potential opportunities to be jointly explored. An alternative to this last option, which I call “+1”, is to follow the reverse path. In other words, a partner responsible for one of these exclusive clients identifies other practices that could add value to their client’s business and, from there, goes out into the field to talk to their respective partners, evaluate possible synergies and decide on which “+1” area makes sense to introduce to the client.
3. Sales stigma and fear of sounding pushy
Situation: Most lawyers have been trained to provide legal advice but not to sell it and everything else it encompasses. Also, the act of “selling,” as well as the term “sales,” causes discomfort. In this context, it becomes even more difficult for partners to prioritize cross-selling, no matter how good the forecast or the opportunities identified, simply for fear of sounding pushy or even inconvenient before their clients.
Possible solution: Shift the focus from selling to adding value. The idea behind cross-selling is far from trying to sell anything to anyone at any cost, as the client will always have the final word. It is less about selling and more about adding value to the client’s business, helping them with their challenges. In other words, it is necessary to stimulate a mindset shift among partners so that they think less about selling – an action usually centered on the point of view of the firm and its practice areas – and more about helping – an action that prioritizes the client’s point of view, their business and the issues inherent to their industry sector. It may sound simple, a mere detail, but it is a fundamental change in perception that, yes, brings results not only in cross-selling, but in any process of developing business with clients and prospects.
4. Compensation models and misaligned incentives
Situation: The solutions proposed so far work in many contexts, but in others they run into structural issues, especially in the compensation model currently in effect, with all its bells and whistles. The truth, sometimes ignored, is that partners respond precisely according to the stimuli they receive. We know that compensation does not solve everything, but if the current model encourages more individualistic work, that is exactly what the partners will deliver. On the other hand, if the model encourages collective work, oriented towards collaboration, that is what the partners will seek and deliver. In practice, it is not so simple, but what does not work, and happens quite often, is for the firm leadership to demand more collaboration from partners and compensate them for individualized performance – a strategy destined to fail.
Possible solution: Review the compensation model or seek alternatives. If the goal is increasingly and unrestricted collaboration, then the compensation model needs to be revised to reflect collaboration in a way that better suits the firm and its partners. Far from being an easy task, as it can be like stirring up a hornet’s nest, it is the price to pay for prioritizing a path that, if well executed, aligns quite well with the ever-growing expectations of corporate clients. Alternatively, team bonuses or specific funds for the collaborative development of large clients can be established, as well as the regular celebration of the most collaborative teams, all highlighting a behavior valued by leadership.
5. Lack of knowledge regarding the client’s business
Situation: Numerous market studies with general counsel are released every year, in addition to the many panels with them promoted at industry events, which, for at least two decades, have showed a clear mismatch in the communication between law firms and corporate clients. While law firms think in terms of practice areas and legal capabilities, companies and their legal departments think about the industry sector where they operate, with all the associated challenges, and, at the end of the day, nobody seems to understand each other, or at least not satisfactorily. What is most striking is that this issue is quite old, but firms do little about it. What is the reason for such apparent indifference?
Possible solution: Step out of your comfort zone and adopt the client’s perspective. It is not an easy task to put yourself in the client’s shoes, but clients themselves can help with this challenge! Through formal or informal “client listening” programs, it is possible to equip partners with structured scripts for more strategic conversations, backed by sector-oriented “inputs” and other support resources. With that, partners can transform their interactions with clients, especially the most significant ones, into productive and relevant conversations, with positive outcomes for everyone involved. Certainly, there will be many lessons learned, which, in turn, will help identify potential opportunities for new projects involving one or more firm areas.
Other barriers and solutions related to cross-selling surely exist, but more important than having an exhaustive list is identifying at least one barrier to overcome. Then it will be a matter of involving other partners in constructive thinking and putting one or more of the suggested solutions into practice. Any cross-selling initiative involves hard, consistent and long-term work – and no shortcuts!
