How to Prevent Revenue Leakage

Opportunities to further serve clients can become apparent during a representation. Something an SME or his juniors reads or hears can trigger an issue not covered within the scope of the engagement letter. This newly discovered issue may be something the client would be willing to pay to resolve, but the firm may unwittingly leave this potential revenue on the table.

Poor communication and the firm’s lack of a plan to prevent revenue leakage are the reasons the revenue escapes.

• The engagement partner, concerned with the big picture rather than the minute details, may never discover the service opportunity.
• The service team may discover the issue, but they may not have seen the engagement letter and may do the work without the firm getting paid for it.
• An SME may identify the issue and inform the client, but the client may hire another firm to do the work because your firm’s SME was unaware that a colleague could have done the work.

Perhaps a qualified SME recently joined the firm or an SME who has worked for the firm for many years has not done the internal marketing to promote the expertise needed by the client. The larger the firm, the more likely it is to have layers of management or senior partners who do not interact with the newer attorneys staffing the matter, and the less likely it is that everyone knows each other’s competencies. Revenue is likely seeping through cracks every day.

Does Your Firm Have a Client Development Guru

 There should be a system to prevent available revenues from escaping the firm. On larger matters, assign a client development employee to maximize revenues from existing logos.

The client development employee should be a facilitator whose job description is to manage the firm’s client relationships. This Market Relationships Leader is essentially a sales and client satisfaction specialist. Her job description should be to be aware of the scope of all engagements within her market. She should know not only the core competencies for which the firm is known but also should learn (or maintain a database of) the capabilities of every SMEs at the firm. She should maintain good relations with the market relationship leaders from other offices or regions to have ready access to SMEs across the firm to connect the firm’s SMEs with buyers and prospective buyers and prevent revenue leakage.