Most lawyers rely on referrals and relationships to generate more clients, though even if you have a warm lead, that doesn't mean you're the only law firm the investor is considering.
Furthermore, if you don't have any warm leads and have to do cold outreach to obtain clients, you're at more of a disadvantage.
So how can you better position yourself to potential clients?
Thomas Lyon, the head of the Mergers & Acquisitions at the Manning Fulton law firm and kindly took the time to explain how his law firm pitches and closes new clients. These are the exact strategies he uses to consistently close $125,000 - $175,000 contracts on $25 to $200 million dollar deals.
Referrals are one of the most common sources of new leads for lawyers. At Manning Fulton, most of their clients come from current clients or industry connections, such as investment bankers, CPAs, board members or other people the business trusts.
However, referral programs are somewhat difficult to scale as you’ll quickly exhaust your list of connections.
Therefore, you may consider reaching out to companies directly. For example, you can use a service like Grata to sort for companies by various keywords. From there, you can filter by specifics like location, ownership structure, past funding, and hiring trends.
Whether you're talking to a prospect at a conference, or speaking with a potential client for the first time, you should have a quick elevator pitch ready.
The key is to avoid making it too long, yet it should still communicate essential information that a prospect needs to know to understand what you do and why they need you.
Here are some of the key things that your elevator pitch should include:
Typical deal size
Of all of these four elements, industry experience is perhaps the most important to potential clients as they want to feel comfortable that you already know how the industry works.
For example, your pitch might look something like this:
"I'm a private equity partner at Manning Fulton that works with mid-market ($25 to $200 million) deals and counseled over $400,000,000 in M&A transactions in 2020 alone. I assisted various transactions in cloud computing, e-commerce, business services, manufacturing, and distribution industries, and am a member of the American Bar Association Business Law Section."
Notice that this pitch checks all the boxes?
You also might want to include your unique selling point (USP).
For example, at Manning Fulton, their USP is that they aren't the "Walmart of lawyers."
Tom explained that this means their law firm isn't as large as some of the other law firms available, which gives them a unique advantage as clients work directly with partners rather than with associates.
If you don't know what your unique selling point is, just ask your current clients. Specifically, here are some questions you can ask:
What is their favorite aspect of working with your law firm?
You can ask these questions to all of your clients and then look for a pattern in the most common responses.
Take note of the most common responses, and that is probably your unique selling point.
In fact, even if you think you know your unique selling point, this is still a great exercise as it will likely uncover other values your firm offers that you never considered.
Even if you have a standard conversation format, the initial conversation is one of the most important aspects of closing a lead. So unless your close rate is 100%, you should always be testing this format and making adjustments.
Understanding Their Position
Now that the potential client knows the gist of who you are and what you do, the next step is to see how your law firm can be the solution to their problem and expand on your unique selling point.
While this is the stage where many law firms try to pitch themselves, step back and understand their current situation. This will ultimately help you close the deal as you'll know what key aspects you can highlight about your firm, and you'll be able to position yourself as a solution.
For example, ask about key business metrics and why they want to acquire the business.
Pitching Yourself as Their Industry’s Leader
As the conversation turns back to you, Tom stated that one of the most important things a fund looks for in a private equity lawyer is industry experience.
For example, if a potential client is purchasing a cloud computing company, be sure to show them how you helped other PE funds purchase similar cloud computing companies and key roles you played in the transaction.
Another thing that most clients want to know more about is details on your team structure. Specifically, Tom mentioned that they usually want to be able to "visualize what the team looks like." So will they be working with partners or associates? Will they have access to specialists like tax, employment, and franchise lawyers?
This is a key reason why many investors choose Manning Fulton as larger firms often lack partner communication, and smaller firms don't have access to elite specialists.
By now, you have a fairly solid pitch, and closing the deal is all about understanding your potential client's biggest fears and providing more detailed value.
For an investor, one of the biggest fears is having an error in the due diligence process. For example, if there are issues with the quality of earnings (QofE) report, they want to know that they have a lawyer they can trust to find any potential issues with the report.
One of the most common issues Tom has handled recently is sales and use tax issues and problems regarding the PPP process and COVID related risk.
As some investors are aware of these issues, this is a great opportunity to provide more value and demonstrate your own technical skill. Similarly, you may be able to bring up an example from previous cases of how you were able to reduce risk. For example, Tom mentioned that he was once able to essentially save a deal simply because he recommended representation and warranty insurance for the deal.
This de-risked the deal and made both the buy and sell side feel more comfortable closing the deal.
Ultimately, the more comfortable you can make the potential client feel, the more likely you'll close the deal. So take note of key risks they are worried about and think about how you can show them why you are the solution to those fears.
Perhaps the best way to improve your positioning to investors is to track your close rates. If you only close about five out of ten deals, the tips above should help improve your pitch.
However, a low close rate may also warrant revisiting your lead quality.
For example, you may notice patterns in investors that continuously don't close. For example, Tom mentioned that many deals that don't go through are usually a combination of a company that isn't in a position where it has to sell, and the investor is very risk-averse.
This creates friction, and you may never be able to close this client. In this case, you may want to limit free consultations or, if you have limited availability, you may choose to work with a less risk-averse investor who is purchasing a company in a more pressing situation.
Finally, if the client simply chooses a different law firm, don't be afraid to ask them why. While it may be an awkward question, it's a great way to gain insight into holes in your pitch process, and you'll learn much more from investors that didn't choose to work with you than investors that did choose to work with you.
Additionally, consider asking the people that did choose to work with you why you are their top choice. From there, you can ask for referrals or target lookalike clients in the same space.
Similar to a company finding product-market fit, you will continuously test and adjust your pitch strategy. You may also notice that some pitches work better for particular markets, fund sizes, and investor experience, so be conscious of that as well.
Take action on the tips above, and you'll be on your way to improving your close rate and working with your ideal clients.