Page 34 - Law Society of Hong Kong MPMC Manual v8 - With checklists (1 March 2018)

Practice Management Course | Unit 4
Client Development

10. Winning the business of a new client or referrers typically involves a significant
investment of time, money and effort to present your value proposition. Even after
winning a new client, the revenue from the initial matter assigned may merely
allow you to break even, given the initial investment required to win their business.
Further, a new client may trial you, to assess your performance, by giving you less
important and lower value work. Only once you have proven your competence will
they offer more challenging and lucrative work. This may mean that the client
relationship becomes profitable only after you win additional business beyond the
first matter.

11. Therefore, generating additional fees from existing clients is often a necessity –
otherwise you may end up barely breaking even (after taking marketing costs into
account). Winning new clients is important, but the costs associated with winning a
new client tend to be far greater than the costs of a returning client.

Encouraging repeat business
12. You need to be thoughtfully targeted in deciding for whom you would like to do
more work. Keep in mind this advice from Mike Schultz, John E. Doerr and Lee
Frederiksen, Professional Services Marketing: How the Best Firms Build Premier
Brands, Thriving Lead Generation Engines, and Cultures of Business Development
Success (John Wiley & Sons, 2nd ed, 2013) 20:

Offering a wider and wider range of services has associated costs and
downsides. It adds complexity to operations, and it may require more
supervision, additional staff, or the development of new skills. The same is true
of new industries. Either way, the practice dilutes your marketing dollars,
complicates your message, and expands your pool of competitors.

By the same token, if you fail to address the emerging needs of your clients, you
may force them into the arms of competitors. Moreover, betting everything on a
shrinking industry is not a great strategy to achieve robust growth. You don’t
want to be caught offering yesterday’s services to dying industries.

13. Additionally, only research will give you the insights you need to truly understand
your target client audiences and recognise opportunities, which is difficult to
maintain across multiple industries and services. As a result, being selective about
existing clients is a more sustainable strategy from that perspective as well.

14. One way to be selective about which clients you want repeat business from is to
evaluate and categorise them as A, B or C clients, using a set of criteria such as:

• Potential for earnings.
• Timeliness of payment.
• Nature and volume of potential work.
• Ease of working with them (some clients are not worth the hassle).
• How much they refer your business and the quality of the referrals that
convert to work.
• Overall satisfaction with your service.

15. Set some goals and objectives around what you want to achieve. Do you want
more repeat business, a better quality of referral, more of a certain type of work?

© The Law Society of Hong Kong (2018) Page 30