[Second in a four-part series by Mike O'Horo on law firm referrals.]
Let’s recap where we left off in our previous post: Your friend, Janice Brown, introduced you to a colleague, Jack, whom she believed to have a legal issue you could help with.
Beforehand, you discussed with Janice whether she thought he would welcome the contact and how he might benefit from a meeting with you, let alone any ultimate legal advice — in this way identifying the problem Jack would acknowledge having and a foundation of your initial conversation with him.
The introductory phone call to Jack went well, narrowing the focus on his current problem, and you agreed to meet to discuss it in depth.
It’s time for that sales investigation meeting
As an overview of some goals to achieve in your meeting with Jack, remember to reconfirm that the securities issue remains his priority — but be prepared to abandon it in favor of whatever is most pressing now. Whatever issue commands the agenda, learn the hard deadline for a solution and lead Jack through a dialog that results in him quantifying the economic importance of the problem. This not only reconfirms its priority, but also establishes a very high ROI for the cost:value relationship for your legal fees. By doing so, you’ll get Jack to do something really important for you: Position your solution as a return on investment rather than a cost.
What to Say?
Following brief pleasantries (Janice told you Jack was a “to-the-point guy”), the conversation during the investigation meeting might resemble this, and provide the following effects.
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Speaker
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Dialog
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What you're accomplishing
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You
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On the phone you alluded to progress with the structural problems in your newly acquired companies. Congratulations. Janice thought they were really giving you some gray hair. How did you get them under control?
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Jack’s earlier dismissal of this issue said nothing about a final resolution. Test for future opportunity before abandoning it.
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Jack
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I didn’t say they were under control. I said I had some breathing space. I’ll still have to get to them within the next 60 days.
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This reveals that the original opportunity will be available again in near future.
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You
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OK. Tell me about the unions’ special stock.
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Move on to an agreed agenda.
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Jack
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They were a tradeoff for wage concessions. That sort of thing was fairly common during the last recession.
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You
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So why is that a problem now?
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Despite your knowledge and experience in matters like this, never assume the problem is obvious. Get the prospect to describe it.
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Jack
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We’re having a great year. Our stock is trading in the upper 200s, an all-time high. That’s the good news. The bad is that only institutional investors can afford the shares at that price and there aren’t enough shares outstanding to attract the attention of the big brokerages with national distribution. We want to do a split to get the share price down. Then we could issue enough additional shares to attract a big market-maker and make the shares more attractive to smaller investors.
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You
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That makes sense. What’s the problem?
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You’ve heard the situation, not the problem. Don’t assume or conclude.
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Jack
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The union might interpret this move as a precursor to diluting their holdings, and they’ll use this as leverage to renegotiate the wage concessions.
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You
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What happens if you can’t do the split and issue the new shares?
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Explore the consequences of the problem. Is this something that Jack must do something about?
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Jack
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We need the $25 million proceeds from the new issue to finance the rest of our roll-up. But union wage negotiations would be public and scare bankers and investors. We need to find a way to break the unions’ ability to block a new issue.
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This is a qualitative response, i.e., the effect if he does nothing. Now quantify the tangible cost of doing nothing.
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You
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What economic effect would that have on your company?
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Jack
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Half a roll-up is worth nothing — there’s no critical mass. If we can’t complete the roll-up, we’d probably have to sell off the companies we just bought. The vultures would eat us. Worst case, we might lose as much as half of the $200 million we already invested.
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Now, your legal fees will be measured against the $100 million cost of doing nothing. You have positioned your service as a return on investment rather than a cost.
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You
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How would that affect you personally?
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Explore Jack’s personal consequences.
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Jack
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I was brought in here specifically to pull off this roll-up. Need I say more?
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Jack is a personal stakeholder.
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You
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By when must you resolve this?
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Test for Jack’s ability to delay a decision.
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Jack
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We’ve been moving pretty fast for the past year. If we stand still for more than 30 days, someone will start to smell that something is wrong. We don’t want to be the subject of financial reporters’ speculation.
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You know there are real penalties for delay.
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At this point, Jack has proved to both of you that he must do something. Therefore, this is a legitimate sales opportunity. You facilitated Jack recognizing and acknowledging an action imperative based on the actual or projected consequences of the problem.
Clarity has real value, and the higher up the executive chain, the more value it has.
You accomplished your original purpose: You made Janice look good to Jack, and you have Jack thanking you for the meeting instead of the other way around.
You also enabled continuity — there is a basis for asking Jack, “What do you see as sensible next steps?” which usually leads to explicit buying behavior, and “When does it make sense for us to reconnect?” which solves your continuity problem.
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[Mike O’Horo, known by thousands of lawyers as The Coach, is a serial innovator in the law firm business development world. His latest innovation is Dezurve, which has cracked the code on identifying investment-worthy lawyers and eliminating training budget waste.]
