Why lawyers are bad at business development
I'll also share some advice on how to set up your rainmakers for success
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A couple weeks ago, I answered a question from a reader about how to optimize your team’s sales performance. A few of you were interested in reading more so I thought I’d share my full thoughts today. Maybe you’re a law firm looking to generate more revenue, but maybe you’re a legal tech startup looking to grow new bookings. Today’s article should be relevant to both groups.
In short, if you’re trying to increase revenue, you have to make sure that you have the right people working on this problem who are focused on the right metrics. A quick preview of today’s deep dive:
School and sales are very different
Why law firms are bad at this
Strategy vs. Trial & Error
How do you find the right person?
Measuring success in complex sales
Focus on leading indicators
Step 1: Evaluate old transactions to figure out your leading indicators
Step 2: Add new leading indicator metrics afterwards
Step 3: Analyze performance and adjust where needed
Final words
School and sales are very different
There’s often a talent mismatch between the type of work an employee excels at, and what the organization needs. This is especially true when it comes to sales-related jobs. I’m not just talking about professional sales reps; I’m also talking about law firm rainmakers. People are attracted to positions that promise to pay the most amount of money, even if they’re not a good fit for it.
I’m going to oversimplify here, but roles involving sales—or “business development” which I use interchangeably in this newsletter—are very different than most types of jobs. Especially in the law. Many law jobs are analytical and are very similar to what you do in school. There’s an apocryphal joke about how lawyering is like writing “term papers under a deadline every day until you retire.”
Sales, on the other hand, is less like school and more like sports. Being smart and hard working helps, but other skills matter more. Like the ability to adapt to changing circumstances, knowing how to be calm under pressure, brushing off setbacks, and working intensely despite difficult odds. It’s often not the ideal job for someone who excels in the classroom.
Why law firms are bad at this
Yet firms often promote “good students” to sales roles. An associate who thrives on doing the underlying legal work ends up making partner, and therefore becomes responsible for bringing in revenue. Is it surprising that many of them end up struggling? The strengths that enabled them to make it to the partnership end up being largely useless in this new world.
I saw this firsthand when I worked in legal tech sales. Once in a blue moon, we’d hire lawyers for entry level sales roles. These were hard-working, incredibly intelligent people. However, they were almost always outperformed by someone who was far less impressive on paper. The skills that are captured by having a strong academic resume, are often at complete odds with the skills needed to succeed in sales.
Strategy vs. Trial & Error
If I had to boil it down to one thing, it’s this: Lawyers, like many academic types, believe that problems are best solved by thinking or planning. This is likely a product of years of classroom training. School is a structured environment where you can follow a formula, and end up successful. Being smart is rewarded.
Natural sales pros, on the other hand, believe that problems are best solved through action and activity. That’s because in sales, you often find yourself in unstructured environments, where you know every little about what works. So trial and error ends up revealing the right path. You take a small step, learn and adjust directions, then take another small step, etc. You don’t try to figure things out first.
Ultimately this is why not everyone is a good fit for sales. Academic types just aren’t inclined to make a hundred cold phone calls a day, or meet with a dozen contacts every week, or go up to strangers to introduce themselves. It just doesn’t play to their strengths. They might be able to fake it for a while—especially if doing it helps them hold on to a high paying job. But if you’re a sales or practice area leader—don’t be fooled.
How do you find the right person?
I don’t have great answers. Past experience in similar revenue generating roles obviously helps. Longer tenures are helpful. For example, in tech, someone who jumped from sales role to sales role probably didn’t succeed at any of them. Better to hire someone who had prolonged success at a single company in a revenue generating role, even if they’ve only done it once.
In law firms, it’s much more tricky, and the stakes are higher. A lateral partner who claims to have a large portable book of business might be good at sales. But they also might just be an academic type who got all their clients from being a sycophant to a senior partner at their previous firm. Putting this new lateral in charge of driving new business may not yield the results leadership hopes for.
It’s a tough problem. And there’s no magic bullet. However, what you have to avoid is having the wrong person in the seat. Everyone has unique strengths, so if you know that things aren’t working out, you need to adapt and adjust accordingly. Don’t be distracted by credentials or a belief that they deserve more time in that role, because you know they’re working hard. You’re just delaying the inevitable.
Measuring success in complex sales
Once you have the right person in the role, how should you measure their success? It’ll be tempting to tie it to revenue, or new business / bookings. After all, sales is objective right? Either you close the deal, or you don’t.
Unfortunately it’s not that simple. If you’re selling something relatively cheap and simple, maybe it works. For example, T-Mobile sales reps are probably best measured on revenue generated. It’s a simple sale involving one decision maker, and sales cycles are pretty short. It shouldn’t take very long, or very much analysis to figure out if they’re good at what they do.
But what happens if buyers take months or years to make a decision? And what if the decision isn’t made by a single person but by a group of individuals, or by committee? By the way, this is exactly how large dollar value transactions take place. It’s complex sales.
In that world, a salesperson could do everything right, and see zero revenue generated for a long time. Alternatively, they could also do everything wrong, and see zero revenue, too. As a manager, you can’t tell the difference between the two. So you resort to judging them on factors unrelated to revenue, like are they a good corporate citizen, do they appear to be working hard, etc.
Focus on leading indicators
If you’re dealing with complex sales, you must avoid falling into that trap. Instead you’ve got to focus on measuring leading indicators of revenue. It takes a bit of extra work but you have to go through this exercise if you want to have any hope of scaling out your sales and business development. Once you’ve figured it out, it’ll simplify everything. Here’s my playbook: