Part 1 of our Programme for Profitable Growth

Identify the Ideal Client

What does this mean? 

Well, as I write this, the sun is streaming through the windows and I am looking out on a garden that is blooming with new growth. The same thing happens every year as if by magic. Except, of course, it isn't magic, but the result of some planning and hard work on my part combined with energy from the sun, nutrients from the soil and a lot of rain. Some plants grow very happily without any input from me at all (especially dandelions!). Some need a lot of extra care (I don't have many of those!). Mainly my garden is full of plants that like this soil and this position and appear regularly every year.

This is also the secret to a profitable client base: get rid of the weeds you don't want, nurture a few special clients that give you something special like kudos in a particular market or help you attract other, less demanding clients. But above all, do whatever you can to cherish the clients who already love what you do. Attract and nurture clients who are most likely to benefit from and value the way that you do business.

Who is my ideal client?

Good question. And the answer is, it depends on your strategy and what your key criteria are. A good client development programme is all about a process of refinement and commitment of resources and effort. As time goes on, deliberately focus resources on targeting, winning and nurturing ideal clients that are on strategy and which meet the firm's key criteria. In 5 years' time, your ideal clients will be the backbone of your firm.

So the first step is to define your ideal client in terms of your strategy - whether that is to be, say, the firm of choice for growing businesses, the most innovative online legal services provider or family lawyer for high net worth individuals. In each case, the ideal client self selects: a growing business, tech savvy person with a legal need, asset rich/time poor person who needs help with their personal affairs.

This is a good time to sense check your strategy! How many of these clients do you have already? Is your strategy based on delivering more effective services to a core of profitable clients?

When I ask this question in training sessions and away days, this is often the point when partners start to shift uncomfortably in their seats. Usually it's because I have been slightly unfair. At the start of the session I ask a different question: what sort of clients make your firm the most money? The answers come thick and fast: clients with repeat legal needs who fit neatly in with the firm's culture and aspirations, pay their bills on time and refer others. As soon as we get into the realms of strategy, these reliable, supportive clients disappear and in their place appear shiny, new (entirely fictional) clients  that the firm has yet to meet!

If this describes your firm, I suggest you have another look at the strategy before moving onto your ideal client. If on the other hand, your strategy document also describes your ideal client in detail, then read on..

The next step is to define and refine key criteria that flesh out what you are looking for in an ideal client. Different firms will have different criteria. For instance, if your ideal client is a growing SME client, you might be looking for those who are active in a specific sector or at a certain stage of development (so you can help them get AIM listed, for example). On the other hand, your ideal client might be a middle aged couple, with elderly parents looking to downsize and invest their savings wisely.

If you click here you will find a one page download which will take you through how to define your ideal client. Let me know how you get on!

In the meantime, here are my five top tips for identifying your ideal client:

1. Always consider the lifetime value rather than a one off opportunity however exciting it appears
2. Look at the potential of a client on a cross department, cross regional, cross discipline basis 
3. Beware pet clients, trophy clients and important clients - the ones who distort resources and profitability because they are so "famous" or are too big to lose. Instead look out for flagship clients - the ones who reflect positively on your business because you work for them and are active contributors to your profitability.
4. Be aware that there is no such thing as a loss leader - only a loss.
5. Watch out for the seedlings - the ideal clients of the future.

Oh and if you need help reviewing your strategy, give us a call. In part 2 we will be looking at ways of understanding what your ideal clients value about your firm and how that changes over time.