Cross-selling – The big win? Or the big bust?


Cross-selling pervades most industries. From Zara attempting to push the latest homewares on you, to Apple foisting another wearable on the market. However, within the legal industry, cross-selling is relatively unsuccessful. But why? Cross-selling, when successful, is of huge value to a law firm. How can law firms tackle the cross-selling problem more effectively? In this article, we look at the role data and collaboration can play in improving and growing a firm’s existing client relationships.

How do you know if a practice group is any good?

In spite of cross-selling requirements for most partners, there is still a fear that introducing another practice group to a good client may damage the relationship. BTI Consulting’s 2007 law firm benchmarking report found that 77% of law firms rated themselves as poor at-cross selling. And little has changed since. After all, how can you be sure that your co-workers will have the same attention to detail? Well, an obvious answer is collaboration. Regularly meeting with other partners to discuss their work, and to better understand how they help their clients will inevitably increase confidence during cross-selling.

However, to win over clients requires more than just confidence in your fellow lawyers. As a GC once told John Chisolm:

“The firms think that, simply because they do a good job for us in one area….that will be enough to get us to start using them in [other] areas. It’s not. There has to be something in it for us” John Chisholm

For firms to excel at cross-selling, they have to understand the clients themselves, their business, what they value, and show that the firm can offer that in other areas. They have to demonstrate why it is worth changing providers. And for that, you need data.

What does the data tell you?

Data on matters and client relationships is often a highly efficient way of identifying cross-selling opportunities. First, it allows you to better understand your client, and share that understanding with others in an easily digestible way. What industry do they operate in? What types of matters do they normally need your firm to help with? What structure do their AFAs normally take? This is all data that can inform how you present other practice groups to said client. Legal tech platforms can make the sharing of this data easy. By combining it with machine learning like Hogan Lovells, to offer more sophisticated insights on clients, you can ensure your firm only cross-sells when it will be of value to the client.

Second, matter data offers partners a piece of mind when recommending other practice groups. By identifying how other practice groups handle matters, you can identify the activities at which the firm excels. From looking at the time an activity takes, to whether or not it stays on budget, to how successful it was. Additionally, partners can combine this data with a client overview. This will identify practice groups not currently working with a client. Where this constitutes a value add for the client, you can be confident of success.

Changing the structure

Data and communication are the first part of the cross-selling puzzle. However, the second is in changing the way a firm rewards and promotes it. Currently, most firms offer bonuses to those lawyers who bring on new clients. However, new clients are not the most efficient source of revenue for a firm. Research shows that time spent on clients follows a 1-2-4 model. Work for new clients takes four times as long as work for existing clients (the 1) or ex-clients (the 2). Even more impressively, only 15% of clients who were served by three practice groups left after three years. Only 5% of those served by four or five practice groups left after three years. Cross-selling is both more profitable for firms and it retains clients better. As such, firms who reward cross-selling, rather than bringing on new clients, are more likely to incentivise the right behavior.

Additionally, firms should look at their internal structure. While practice groups are a great way of sharing knowledge of the law, they do not promote cross-selling effectively. By building industry-led groups of professionals who understand one type of client, you encourage them to work together. It makes it easier to introduce other ‘team members’ and ensures that those introductions are aligned with the client’s interests.

The personal touch

As with many successful business strategies, cross-selling is no quick fix. It requires investment and encouragement to be successful. Not least because it will push many lawyers to change behaviours of a lifetime. However, the benefits clearly outweigh the negatives. Cross-selling offers the highest profit margins of any client work; it improves client relationships making them less likely to change firms and allows a firm to offer the most tailored service possible to a well-known client. In order to properly achieve this, firms need to embrace data and communication to ensure that the cross-selling opportunities they offer suit the client best. After all, no one is going to jump ship, unless it’s a really good offer!

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