As all partners in law firms know, growth is a challenge because the legal market is mature and low growth. So how does a firm also operating in a mature and low growth market achieve 37 quarters of consistent growth? This is the track record of Coca-Cola, who consistently promise and deliver growth in organic revenue, operating margin and value share. Although this is certainly admirable, why should the success of a fizzy drink manufacturer be of any interest to a law firm? Is there anything that we can learn from this that will help us in the legal market?
Both the Legal and the NARTD (non-alcoholic ready to drink) markets are mature. Within both, the opportunities come from micro-market change and churn for firms that understand the dynamics of the market. For Coca-Cola, opportunities can come from navigating changes in sales channel dynamics with targeted pricing and promotion initiatives. For law firms, it can come, for example, from navigating changing customer needs and priorities as they seek to reduce costs, perhaps giving them attractive alternatives to disaggregating matters, retaining work in-house, or bringing in non-traditional service providers.
What Coca-Cola has, that law firms generally don’t, is a consistent process for identifying and responding to opportunities. Known as “Customer and Revenue Growth Management” this uses information, intelligence and analytics to align people across the firm and focus their efforts. Clearly, Coca-Cola have the right competencies in specialisms such as marketing, customer development, consumer intelligence, channel management and finance, but it is the way that they align and focus all these competencies to find and take opportunities that creates this consistency in performance.
American Airlines originated this approach in the 1980s and over the last 30 years I have seen the tangible difference it has made as it has been rediscovered, reinvented, renamed and applied across other sectors.
Adopting this approach has become easier over time, due to the flexibility of modern analytics and data technologies, allowing firms many degrees of freedom in designing the process. Information is brought together from across the firms functions and systems: for law firms this could encompass data from marketing and digital marketing, the website and client portals, business development and the CRM, finance, the PMS, profitability and pricing applications and from practice areas. Analytics is applied to create a shared understanding and provide a clear picture of the micro-markets and the opportunities. Understanding the opportunities is the precursor to understanding how to compete for them flexibly and effectively.
Law firms have the information, intelligence and skills needed to survive and thrive in today’s challenging markets and applying these in a customer-centric methodology could make all the difference. Adopting a customer and revenue growth management process in a variant suitable for the firm would help identify and quantify the opportunities arising from change and should stimulate innovative and flexible responses across the firm.