Kinnear: Avoidable loss
Cross-selling is the biggest missed opportunity to boost law firm profits, according to new research that says lawyers fear that referring clients to colleagues makes them look too pushy.
But the marketing and business development heads at 150 law firms of at least 100 lawyers each – half in the UK and half US – estimated that maximising cross-selling could add an average of 12% to the bottom line.
The research also found that, while law firms were spending millions on AI this year – the equivalent of £2,000 per lawyer – many were still struggling to make it work for them.
Three-quarters of respondents told marketing software company Passle that cross-selling was the biggest missed opportunity, with half claiming that lawyers did not try because they did not want to seem too forward.
Lack of interest or incentives was an issue for a third (33%) and 28% said their fee-earners preferred to refer work to contacts outside the firm.
A disinclination to share clients, uncertainty about how to approach them, a lack of time and also a lack of understanding about the different services their firm offered were also listed among the reasons.
Connor Kinnear, Passle’s chief marketing officer, said: “Failing to cross-sell means losing revenue to competitors. Rather than seeming pushy, cross-selling highlights a firm’s broad capabilities and strengthens client relationships.
“Our data shows firms are missing out on millions – an avoidable loss. To stay ahead, marketers must get lawyers on board.”
The AI element of the research showed that UK firms are spending £1,848 per lawyer, compared to £2,336 in the US, on the technology.
The most common reason for using AI was to save time (67%), while improving data analysis (63%), helping to develop marketing content (63%) and new business pitches (51%) were also among the main drivers – but only a third of firms (37%) thought AI would help them cut costs.
Many said they felt pressure to use it from clients (44%) and competitors (34%) to demonstrate they were keeping up with the times.
There were still significant barriers to adoption, including concerns about data privacy (55%) and hallucinatory outputs (36%). Firms also reported internal struggles including IT restrictions (52%), implementation difficulties (50%) and suppliers not delivering proven solutions (45%).
Mr Kinnear said this showed the barriers were not about funding but instead implementing the technology.
“Most firms are willing but not always able to harness the power of AI to make themselves stand out, and what is clear is that there needs to be investment not just in terms of funding but in understanding the tech that’s on offer, how it works, and what is the right fit for them.”
The research was done to mark the launch of Crosspitch AI [1], a new AI-powered tool to help lawyers source and share insights with clients about other relevant services within their firms.