One of my former mentors used to live by the phrase “spend money to make money”.
He was no ordinary spender; he spent (a lot of) money annually on: And yes, he had a sizable book of business. But there was a big downside (that eventually led him to leave our firm).
He went beyond his marketing budget and had to pay for it. So, he never ended up getting the year-end draw he wanted. It was always “too small”.
| Measuring your return on investment. |
Let's be real...
Private practice lawyers must spend money on business development (whether marketing, networking expenses, tech, or even coaches like me).
So yes, the saying is (kind of) true. But it’s incomplete. When spending money for your business (and even your own professional development), be sure to track and analyze your ROI.
Otherwise, you might be spending too much (or maybe not enough).
What’s interesting about the mentor mentioned above is that his business wasn’t built on the money he spent. He was a networking master who quickly connected with people and built deep relationships.
He would have built the same book spending less money.
So, what should you track to determine your ROI?
EVERYTHING (and not just the money, either). Here’s what to track: | Money, Money, Money, Money |
Track money spent on: Attending conferences (including travel, meals, etc.). For events (whether client-specific or general). On sponsorships. On tech, tools & software. For client gifts (big and small). On year-end holiday cards. For coaching.
And anything else that's a BD expense.
Next, analyze what opportunities each expenditure created and how it has supported growth (both directly and indirectly).
Pay attention to the ripple effect of the expenditure on long-term growth.
Did the conference result in 2 new relationships (that haven't resulted in direct work but have resulted in 3 introductions, one of which looks to be bringing in new work soon)?
Did the event with a client allow you an opportunity to discuss big-picture items that enabled your law firm to cross-sell services (that you won)?
Know what results have come from the money spent. | THE ROI OF YOUR TIME INVESTMENT You only have so much time |
Track the number of hours you spend networking and marketing. Don’t forget to pay attention to prep time, follow-up time, and time spent on social media (for marketing/networking).
Categorize your time and pay attention to where you tend to spend your time vs. what you tend to shy away from (and why).
Track the new clients, matters, prospects, and referrals that have come your way as a result of this time. | |
You do not have time to build strong relationships with everyone you meet. Honestly, you can’t (there just isn't enough time for it).
Narrow down your networking pool by grading relevance, reliability, and readiness. And then prioritize your follow-up and engagement based on how relevant, reliable, and ready your connections are.
But do not assume these grades will stay the same in perpetuity. New information will come to light. New people will come into the mix.
Reanalyze and prioritize at least quarterly. | Improve your business development ROI |
When new matters, referrals, and/or clients come in, try to pin down where they came from.
What sparked this new client, matter, or referral? How much time, energ,y and/or money was spent to get it?
Don’t forget to measure the ripple effect over time (e.g., indirect growth).
Not only will this make your business development more effective, but it will also make it more enjoyable.
You’ll know what’s working (and why), enabling you to get more focused and strategic. Meaning: you'll spend less time for better results.
XO, Heather |
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