Firms can't afford to have their growth strategy depend on whether Graham in M&A feels like introducing ‘his clients’ to the employment team.

A fascinating survey of 202 professional service firms including 135 law firms from Camojee highlights that firms grow faster if they look at firm-wide capability instead of individual pursuits. 

Firms often stay stuck by celebrating individual fee earners and therefore, this increases the revenue dependence on them.  The research goes on to state that for firms that break this cycle, they will see growth 42% faster, they will retain clients for longer and they will double lateral hire success.

Business development is key to this success and the research points to 70% of firm leaders now championing their BD efforts.  It hasn't translated into success, however, due to the fact that 50% of firms lack accountability frameworks and 35% of firms run reward programs that undermine the desired behavioral change.  Amazingly, the research also went onto reveal that 50% of firms don't measure client churn, win rates or marketing return on investment.  Coupled with the low adoption of CRM and lack of quality data it is clear to see how rainmakers have thrived over the years.

What Does Good Look Like: Firms that have cracked the code have done four things well with tangible results at the end.

1/ They have institutionalized individual excellence

Only 38% of law firms actively manage their pipeline compared to 79% of other professional services firms.  When firms share their framework and pipelines, there is a huge correlation between improved revenue, service penetration, win rates and client retention.

2/ They have made technology valuable and low-touch

Firms who deploy technology as enablers to guide activity and surface opportunities often then have the luxury of using technology-enabled insights to evidence the impact. 

3/ The rewards game has been rewritten

Collaboration, client stewardship and the coaching of junior talent are embedded in firms compensation models and metrics.

4/ Sales has been reframed to client care

Selling is seen in these firms as value creation, client stewardship and proactive problem-solving.  Business development is positioned as client-centric and resistance diminishes whilst engagement increases.

The statistics don't lie if firms manage to reduce the dependency on rainmakers and start to become more collaborative, remove silos and pin client centricity to business development and move the dial on revenue.

Three distinct outcomes are:

• 65% lateral hire success vs 28% for dependent firms
• Client churn drops from 12.5% to just 5%
• Service penetration jumps from 1.25 to 3.33 services per client.

The proof is certainly in the pudding for firms that want to future-proof themselves and break down silos internally to unlock growth.