Sunny: Hello everyone, my name is Sunny McCall and I am Momentum’s Vice President of Content and Experience and Program Director of the upcoming GoPro 20/20 Event. It is my great pleasure to be here today with Frank Troppe, Consulting Partner with Miller Heiman Group. Frank welcome.
Frank: Thank you. Glad to be here Sunny.
Sunny: Thank you so much Frank, the pleasure is all mine. For our listeners by way of background, Frank is a lawyer who works with some of the largest professional services firms in the world, including one of the big four and two of the top five law firms. Frank is here today to discuss how business development is changing in the world of professional services. So Frank, going ahead and jumping right in there, I understand that in your current role, a key focus of your work is to guide time challenged clients interested in more effective opportunity creation and pipeline management. Could you share with our listeners today what that may look like for a client who is a law firm versus an accounting firm or other type of professional services firm?
Frank: Yeah, Sunny it’s funny, one of the only things that hasn’t changed is that our professionals are time-challenged. And what’s gotten I guess worse, from an individual perspective is that there’s been more and more demands placed on professionals and at the same time no relief on the time side. So, time challenge really means they want a straight line between activity and results. Lawyers, accountants, auditors can’t afford detours that are caused by either poor sales strategy or spotty execution. The market actually punishes firms and professionals for those kind of detours and we work with people who are I guess sick of squiggly line sales efforts. So there are similarities between the types of firms that you mentioned and also differences. So, you said law firms versus an accounting firm or versus an accounting firm or other type of professional services.
Let’s start with the similarities, and we see three really strong similarities. One, basically professionals want to feel like their efforts are paying off. They’ve been trained at least since professional schooling and licensing to not like failure, maybe since birth to have that hardwired into them. They don’t like failure and business development by definition involves win rates that are less than a 100%. So across the board in all firms the idea that we feel like our efforts are paying off on really important similarity and starting point.
The second thing we know that’s similar between firms is they have a really limited time in which to focus, because they are all operating in a seller-doer model. And what that looks like is, today I am working for a client and I am performing services directly for the client and at the same time I’ve got to find time to squeeze in a little bit of network and a little bit of client development, a little bit of a conversation about future pipeline opportunities and that’s not my full time job. So there’s limited time across the board, clients want to talk with the professionals in the firm, and so this is the second common challenge. Do I have 30 minutes a week to do that? Do I have 5 minutes on a day? Do I have two and a half hours? It’s not a 50-hour, 60-hour effort.
And then, third, finally from a firm perspective, it’s just so expensive to chase bad deals, and this would be the case in accounting law or strategy or other type of consulting firm. So, resource allocation is emerging as a real key strategic lever like where we point our resources. That’s what all the best and the fastest growing firms are doing well, addressing those similarities.
Now, I also promise there are a few differences. So you think like how is the law firm different from an accounting firm of other type, and let me just focus on law firms for a minute. One, law firms are further behind accounting strategy and consulting firms in terms of business development discipline. And one implication of this is that they are more likely to talk about what they do and less likely to uncover client outcomes, the pipeline, manage through pipeline, and frankly, client interactions to let the client speak more. And this is something that we’ve observed that if you think about a classic high performing sales organization or business development organization, they are pretty good at getting the client talking. And that’s not something that lawyers have been trained in, in terms of the business development discipline. And so we are trying to sort of flip the 80-20 rule and let the client speak 80% of the time. Law firms are starting to catch up on this but not where accounting strategy consulting firms are.
Second thing, law firms are much more individually oriented than team oriented, just a general statement. I know there’s exceptions to that. But when I work with busy lawyers, they are so focused on their own book, there’s an unusual thing in law firms about the portability of business where in other commercial enterprises, you can’t just walk away with the clients or business. That’s much more likely to happen in a law firm setting, and so they, tend to be like less trust, frankly and just much more of an individual orientation. We found from junior partners that they find this frustrating sometimes but they want to be introduced, they want to be able to take on new clients, pursue new clients, and they feel like well these are all off limits and I don’t really know what’s going on there, because maybe the senior partner isn’t giving them as much access or insight.
Couple of more big differences in law firms, much less likely to have fully evolved business development support teams. Some firms have made strides in this and we notice a huge difference in the creation of opportunities and the pipeline win rates, in those few firms, where BD support is not viewed as just like an administrative thing, hey do this proposal, but they are really working shoulder to shoulder, targeting, creating opportunities and helping all throughout the process. I guess, the last thing that we notice about law firms and successful firms, I mean, these are – historically they have a legacy and they are doing well, the profits for partner are high. But they are facing new challenges and they are not addressing those challenges yet in many cases by having a pipeline or any type of discipline around the pipeline. And we’ve seen where that’s been adopted, it’s a great way to drive growth in targeted areas of the firm. Implication of all this stuff, it means a law firm that looks like a collection of individuals, really smart people, but lacking a common language in platform and that’s one of the things that we really see changing as part of the BD landscape.
Sunny: Perfect, thank you so much for that Frank. It really provided some great foundation for us for the rest of our conversation here. Moving to that next question then and giving your current role and focus, I am curious to hear what the top two trends are that you’ve observed specific to sales effectiveness over the past few years, and how these trends may or may not evolved over the same time period.
Frank: Yeah, so, the top two – we really study business development trends religiously and we have a strong point of view, I guess, well perspective on what’s changing in the marketplace, and there are seven that we’ve identified but I will give you the top two in my perspective with some detail and then I will just maybe briefly mention another handful that people can think about a little bit more after the session. So, I think number one, and so the biggest trend that, in professional services has been the professionalization of the sales or business development function. And what that means is that instead of say 15-20 years ago, 10 years ago, where you had a collection of smart people working individually but no common approach to how to prepare for a meeting, no common approach for how to manage an opportunity to close. It was just like very good at reacting and listening for opportunities but pretty poor overall at having the coordinated firm-wide effort. And these are big sophisticated businesses there’s no way any of the commercial clients, the big commercial clients of a law firm would consider approaching business development that way. And I think that law firms now and certainly the big four in terms of accounting firms, the big three strategy firms have professionalized or evolving the professionalization of their sales function. So that’s going to… Look, even the word ‘sales’ wasn’t used five years ago and it’s begun to be used quite a bit more often. We now have chief business development officers instead of just the title of marketing containing everything. So that’s number one, professionalization
Number two is really a generational trend or change and so we are seeing being introduced to business development concepts much, much earlier. So what used to be limited to partners and directors is now being exposed to senior associates in law firms and accounting firms and for managers and senior managers and accounting firms. I think the reason for this has been that once somebody was deemed a partner and then they are told, okay, not now, go build your book, you’ve got the substantive expertise to be a great partner, go build your book, and they go like, well, how? And so introducing people to these ideas earlier, we are just seeing more and more of that. It’s almost an across the board phenomena.
And so I worked on one of these projects this week and I will tell you that the appetite and reception for this learning by more junior people has been very, very strong. And what that looks like is room is you’ve got people that are really leaning into the conversation and asking great questions. So, professionalization and introducing ideas earlier really they are two big moving pieces that we are seeing are affecting like cultural adoption of this idea in firms today. I will just briefly mention the other five, and I will use an acronym of TRACT, T-R-A-C-T just as a kind of an easy way to remember this.
So, one is technology, right, so there’s just so many things on technology that are changing the use of social media, the way that we leverage CRM and the way those things are linked to methodology and issues related to adoption, so technology a big one. R would be research, use of external benchmarks instead of kind of the internal navel gazing like what are our top three people doing in practice. That’s important. But, how about the other 300 people in the marketplace that you are competing with. What are they doing? So technology and research. The A would be alignment. Much stronger alignment emerging between sales and marketing, and what that looks like then is that the website starts to reflect what’s really happening in client conversations as opposed to our language and generic promises, okay. So, stronger alignment. The C would be client centricity, and I am just thinking of what actually happened a couple of years ago, and I won’t tell the whole story but, there’s a legacy attitude in some firms about the most important thing to talk about is the pedigree of our firm. And if you have a great firm, like the client knows that. And what the client really cares about is their problem, not how long your firm has been in business. Now, they trust you because of that, but the client centricity is really showing up and you can see it changing in the way that websites are starting to talk more about the client issues, and less about history of the firm. The final one, teamwork, and a big trend in professional services, what this looks like is greatly improved use of internal and external network. So on an individual pursuit, within the firm, more people getting involved, people like to sell in teams. That’s working better. And then also more teamwork with your external network. So, are you developing a support system outside of the firm that could help you drive business? So, those are kind of the big seven and of the two that have had the greatest impact in the firms that are growing the fastest, it’s been professionalization, the sales function and attention to generational interest.
Sunny: Perfect. Thank you Frank. Now, of those trends, were you surprised at all by what you observed and if so, why?
Frank: Yeah, there have been surprises in each and costly ones to ignore in the future, to be blunt about that. I will think about just maybe the two biggest trends and what might surprise people to hear that. So, number one, firms are sadly used to living in a sea of things okay. Their clients have gotten much more sophisticated and they are purchasing, they are starting to view even some of the highest level services in more commoditized fashion. And at the same time firms have not advanced beyond selling methods that were used 20 years ago, 30 years ago, 50 years ago. This really creates a dangerous goal and explains some of the pricing pressure that firms are experiencing. When we work with lawyers, they are often surprised to experience the power of differentiation that comes from the professionalized sales function. So they are like bogged.
So actually the way that I perform in a meeting becomes a differentiator. The way that we strategize around a pursuit is a differentiator. And when that happens, it’s a real confidence boost to the people involved in the process, because they are not relying just on the great work and the great pedigree that they get, but their process is working better. And our research has shown a significantly lift, over a 5 percentage point lift in win rate, and even bigger increases in quality pipeline growth through that kind of function. I am not surprised by that result but firms are really surprised.
I guess, the second surprise has been this enthusiasm by the next generation, much higher than I expected. So I kind of thought hey, these people would be more reluctant, under pressure, I don’t have that much like a partner does, and they’ve just gobbled it up. I think part of that is some of the advances in adult learning where we flip the classroom and really engage the audience more, has made the enthusiasm even greater. But when I have a group of 25 more junior lawyers or accountants in a room, it’s always a positive experience. Some good news and I think something that surprises the next generation is the gap between like hey I am a newcomer to business development, and versus being a senior partner, it doesn’t take 10 years to address that gap. Like it might – you might have a 10-year learning curve in your substantive practice area, but you can get good at business development in less than 10 years. And that’s kind of an energy boost and an exciting idea for some people who want to prove that they are good at something.
Sunny: Perfect, thanks Frank. Now, building upon that, could you share maybe two or three key lessons learned in your work with clients that at the conclusion of your work with them that they shared with you, “If I only knew this at the start.”
Frank: Yeah. Happy to do that. And it’s not just my clients. I mean, I am learning all the time. I am not just a lawyer but I am also a business developer and I am not just a professor of business development, but I carry a bag. So, I mean, I am building a book of business and these lessons learned, I mean, I am learning, I’ve learned new things this week, but couple of like big ones that when we finish an engagement or we finish a stage of an engagement, where the client says, ah man, I wish I had known this at the start, I wish I had believed this at the start… It’s different for each client but the single most common lesson is it pays to get started. Everyone says, I wish we had done this earlier. I’ve never had anyone say, oh I wish we’d waited a year to do this. Everybody says, I wish we had done this earlier.
Second lesson I think, and this is going to be kind of maybe like a harsh lesson okay. But there is a cottage industry around business development resources for professional services. And what I mean by that is there’s a lot of small companies. In a cottage industry, and very expensive cottages by the way, has not served firms well. In our practice we take a different approach. We adapt the proven practices from commercial enterprises and we have very large global scale, and so using this method, our clients are just significantly outperforming the lackluster performance of firms that are mom and popping it. Our clients win when they are up against peers who are cobbling together and frankly, kind of junk science from sales therapists, retired partners, and maybe other people whoever, haven’t ever sold a thing in their lives or coached a sales team. And there’s this surprise that like something that works so well in commercial enterprise could work for a firm. And I am not surprised by that. But often clients are surprised by that okay.
A couple of other things that just kind of jump out, like one thing – I wondered at the beginning like why can’t smart people just figure it out, why can’t they just figure out BD. And you can’t just train smart people or just turn them loose and say hey go for it. You have to have a strategy for reinforcement and professional development that goes beyond a single partner retreat or communication system. So, firms do best and they grow the fastest and they win more than their fair share when they are patient, but they don’t accept hey let’s do this when we have time or plug it in when we have time. And what that would look like historically if a firm was – oh it’s okay to take three months to write your plan, it’s okay to take six months to do nothing on your plan, it’s okay to take months, let’s do another rewrite, and take six months to track down people. Like you got to have a strategy for reinforcement that says upfront, that’s not acceptable. You are going to write down a plan, business development is basically about one thing: it’s about listening to the client and then coming back with what you’ve learned and fulfilling your commitments to the firm. And when you blow it off, like because I am busy, you are not honoring your commitment to your firm.
I guess, last one if I think about, you know I am working with a firm right now that has just significantly less per year – but beat all of its peer group every single year. And one of the reasons I think for that, the lesson learned would be they outline really specific measurable goals. They do it at the practice level, at the account level, at the opportunity level and without having like a culture shock they manage the firm like if it’s next. They manage the firm like the firm’s most successful clients manage their business. We are a team, we are trying to achieve these goals, we care about these goals, and good management for them starts with executive sponsorship, cultural adoption. And then like I said before, that very targeted reinforcement, I think one big change that’s coming out, I will make this prediction, is we are going to see firms adopt much more rigor around account reassignment. And many professional services firms of all categories today, so this isn’t done that frequently.
I helped one company achieve an 80% increase in sales over four years and mostly by this single idea. We replaced account ownership which is the common language, account ownership, we replaced that with account lendership, meaning I am giving you responsibility for this period of time, I want to see – and help you, but I need to see results, I need to see improvement in the quality of that relationship, the levels of service feedback that we are getting and frankly revenue growth and profitability. That concept is anathema to most professional services firms, but my crystal ball says that will change over the next three to five years. You just can’t afford in the long run to have highly valuable assets like major clients managed poorly and account reassignment is – something you could do in a very staged and comfortable way that gives people a shot at – it kind of reverses this idea that I can be a squatter. Like if you sit on an account for years with no progress, like give somebody else a chance. So that kind of – a lot of thoughts there but those are the major lessons that have resulted in higher revenue for professional and greater profits for partner.
Sunny: Perfect. And finally, Frank, I am pleased to state that a hallmark of our annual GoPro 20/20 Event, has been Miller Heiman Group’s participation each year traditionally, targeted towards the theme of best in class client development for professional services, the insights shared by you and your colleagues each year are most valuable as they are not only practical but also built on substantive research with the market. Could you share with our listeners today a preview of what they can expect to hear at this year’s event?
Frank: Yeah, I gave you the four corners of what I expect to hear and I’ve participated in these year after year and I’ve just listened and learned. And so one, I think you can expect total honesty around the challenges that firms face in business development today. Two, I think you are going to hear some specific ideas about how you can move up the industry ranking charts, whether that’s the Am Law 100 or the Accounting Today Top 100. Third, I think, we will hear about how firm clients intend to continue disrupting this space, the professional services sector, and what you can do about it. Just in the last four weeks, there have been important announcements in the news by Facebook and MetLife about their approach to diversity which is going to change the way that they work with firms. Just this morning, there was an article out quoting the top lawyer at Morgan Stanley about law department structure at large financial services institutions should be reevaluated and where the compliance function should be housed under the same move as the legal team. That’s an example of firm clients disrupting kind of the way that things just status quo. I think we are going to hear a lot about that.
And the thing I am most excited about kind of the fourth corner of this would be we are going to hear how one firm and perhaps the most competitive space, and so a super regional firm, is using the power of a professionalized sales approach, that first thing that I mentioned as a major trend, to basically do three things, how do we get access to more decision makers, how do we grow our pipeline and how do we increase our win rate. So there are so many other things we could share but I think we are probably maxed out for this conversation, but actually if there’s a specific BD issue that someone wants resolved before, during or after GoPro, I would invite them to contact you and I know you can maybe get that into the agenda this or the next session. So, I hope this has been helpful today for your listeners and I have just enjoyed sharing some of our experience, we continue to learn every day as well.
Sunny: Perfect. It’s been my pleasure to hear you and talk a bit with you here today, Frank, we are really looking forward to seeing you at our upcoming GoPro 20/20 Event taking place in New York City on June 22 and I just thank you so much for your time.