Use Questioning Skills to Define Your Prospect’s
"Action Imperative"
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Abstract: Lawyers spend hundreds of hours each year pitching services to corporate counsel and management. Few firms track the costs and results of this activity; if they did they would see that a lot of time invested in preparing and presenting is wasted and generates new business only a small percentage of the time. This article explains why so few presentation visits yield new business and offers a more productive approach: Using lawyers’ questioning skills to identify the action imperative, i.e., the actions that prospects must take. Illustrative dialogs are included to show how this method can be applied to get results. Article: Three partners from a large East Coast firm visited the general counsel of a major financial service corporation with whom they had not done any work previously. Referred by one of their clients—a peer of the general counsel in question—they visited the company to discuss getting some work. They described the firm, its services, and the firm’s lawyers and their credentials at great length. The firm had already decided to try to exploit the Year 2000 Problem. Reasoning that financial services companies were at risk for Y2K more than most, their argument was straightforward: Computers manage virtually everything a company does, from the obvious strategic applications like payroll, payables, financial analysis, and electronic funds transfer to less visible ones like building security and entry, elevators, etc. Given the degree of corporate dependence on computers, at least some of the company’s computerized functions (or those of its trading partners or allies) will be unable to tell whether a "00" date means 2000 or 1900, exposing the company to a variety of litigation. These lawyers had devised a series of measures that the company could take now to strengthen its defense against such claims. The interaction with the general counsel was comfortable, perhaps even effortless. She listened attentively when they raised the Y2K issue, agreed that it was a big problem, asked questions, and nodded approvingly at the lawyers’ conclusions. They returned to their offices feeling like the meeting "went well." After all, the company buys lots of legal services and appeared to have needs that the firm can satisfy. The lawyers dutifully sent a followup letter along with printed materials about the firm and its services. They made the requisite followup calls, leaving voice mails asking whether the materials were received and assuring the general counsel of the lawyers’ availability to answer any questions. The lawyers expressed their interest in reconnecting to discuss the issues further. In short, they check off all the required boxes on the standard law firm business-development model. Six weeks later, these completely qualified lawyers were still unsuccessful in getting the general counsel to address this very real problem. What went wrong? After all, this firm really can help her. The lawyers graduated at the top of their classes at premier law schools and are now partners with an established, prestigious firm that has been around for generations. They are experienced and have a reputation for delivering first-rate work and excellent results. Just as their brochure claims, they staff matters efficiently, control fees, and respond quickly to all client requests and inquiries. They represent well-known clients, for some of which they have already addressed analogous problems. Why didn’t this general counsel buy their solution? First, there are a couple of structural problems. As happens often, a satisfied client who wants to help them get new business referred these lawyers to the financial service company’s general counsel and arranged a meeting, but the meeting was based entirely on the client’s standing with the general counsel, rather than the general counsel’s interest in the lawyers’ Y2K agenda (or any other). The lawyers were focused on what they wanted to sell rather than what the prospect may have wanted to buy. Understanding Decision Making In the practical world, decision making means committing to take action. In the corporate environment, these actions may be very visible and must be attempted with finite resources, so taking action also means accepting the risks associated with that action. Many in high corporate positions are risk averse. Even the more intrepid know that all decisions can have unintended consequences, so they undertake these risks only when they must. Making a decision is not just choosing one option over another, picking better over merely good, or best over better. Every decision maker has a third option that we may not wish to recognize: the option to do nothing at all. Deciding not to decide constitutes the greatest waste of selling time and occurs with discouraging frequency. In fact, research shows that, in 30 percent of selling situations, no decision is made and nothing is purchased. This percentage is for full-time sales professionals who, one presumes, have experience avoiding such outcomes. Although lawyers’ sales practices will change over time and their skills will improve, most lawyers are fairly new to organized selling, and virtually all lawyers sell as a sideline, so I would suspect much higher "no-decision" ratios for them. The inaction of the general counsel in our example had nothing to do with the qualifications of the lawyers she met. She didn’t buy from anyone because, from her perspective, she didn’t have to—at least not right away. For her company, there is no "action imperative" associated with Y2K. An action imperative, as the term suggests, is something that must be done because the consequences of inaction or delay are unacceptably high and far exceed the risks of action. People defer as many decisions as possible and take only those actions they must take. If you question this, consider your own experience. Think of all the things you should do or would like to do but don’t do. You should:
You would like to:
But you must:
If one of your partners was trying to get you to set an appointment to followup on a discussion about the harassment article, another wanted to meet to discuss the Internet economy, and a third had some advice regarding the irate client, who would get on your crowded calendar? What if none of those requesting your time for these respective subjects were colleagues, but instead all were outsiders with a personal economic interest? For whom would you make time? The executives with whom we wish to do business are like us. They are faced with many problems and business situations each day and have too much to do and too little time in which to do it. Only a few of these matters are important enough to command their attention today, and tomorrow an entirely new set of issues will arise to compete with whatever is left over from today, forcing a reshuffling of priorities once again. The reality is that everything will not get done, so we simply convince ourselves that certain threats won’t materialize, or if they do that they won’t be as bad as projected. Because we must, we convince ourselves that opportunities will wait until we extinguish or control the hottest fires (or, at least, those closest to our doors). We have a healthy capacity for denial and procrastination. Although some may favor the "left alone, many problems will go away" theme, often there is an unrecognized and under-appreciated cost associated with doing nothing. The Cost of Doing Nothing How do executives prioritize the constantly changing mix of items that require their time and attention? They know that more things won’t get done than will, so, whether consciously or not, they continually evaluate the cost of doing nothing. They look for items that they can afford (in time, money, or political exposure) to ignore for now. In our short-term-results-oriented business culture, they often are forced to view this question even more narrowly and evaluate the immediate cost of doing nothing. No executive has the time or resources to do everything that he or she would like to do, or even that he or she perhaps should do. But every executive makes time and finds resources for what he or she must do. In reviewing the earlier Y2K sales scenario, the lawyers were trying to get the prospect to prefer their firm and its Y2K solution over others’. They spoke of their firm, skills, experience and clients, assuming that they were competing against other firms and that the general counsel would select one. If the general counsel perceives that the cost of deferring action on this Y2K problem is low enough, like most people she will defer action so that she can address something more immediately pressing. The lawyers’ mistake was to operate on the wrong assumptions. They should not have worried about losing out to competitors. It is a rare competitor who has a market share anywhere near the 30 percent that is claimed by decisions to do nothing. So how should lawyers approach opportunity? First, make sure there really is one. Be skeptical (although not openly so). Conduct an investigation and make the prospect prove to you that he or she actually will do something about the problem under discussion. Ask First; Ask Again. Much Later, Tell When a referral source offers to arrange a meeting with someone he or she knows well, thank him or her, and ask how you can help this person. Ask your referral source why he or she believes the referred prospect will welcome the meeting and benefit from it. The answer gives you the problem that the prospect will acknowledge. This may turn out to be a possible agenda for your meeting, but it is the absolute essence of your introductory call. Ask questions and learn as much as possible about the situation from your source before making your call. The basis for the meeting ultimately may be different from that suggested by your source, but at least you have a reliable place to start. You can adjust to what the prospect says during the call. For example, let’s say our client, Joe Brown, wants to introduce us to a friend and colleague: | ||
| Joe: | "I should introduce you to my friend Jack Matthews. He’s general counsel of XYZ Corp." | |
| Lawyer: | "Thank you. I’m flattered by your offer. How do you know him?" | |
| Joe: | "We’ve been friends for years, and we talk pretty often about what we’re each doing." | |
| Lawyer: | "XYZ Corp. is pretty active these days. How do you think I can help Jack?" | |
| Joe: | "Obviously, you’ve seen the news about their spate of acquisitions. In truth, it’s the early stages of a roll-up strategy. He told me he’s got a full plate of new companies to integrate into their operations and not much time to get it right before the next round of acquisitions. I think he would welcome your help sorting out the new structures. He’s a sharp guy, but he’s really struggling, so I think he’s a little over his head with some of this." | |
| Lawyer: | "Have you mentioned me to Jack?" | |
| Joe: | "Not yet, at least not in so many words, but he knows I’ve had some help with this sort of thing." | |
| Lawyer: | "How do you suggest I make contact?" | |
| Joe: | "Just call him and tell him I suggested the call." | |
| Lawyer: | "I’m happy to. Jack sounds pretty busy, and he doesn’t know me from Adam. Do you think he’d be more comfortable if you called to introduce me?" | |
| Joe: | "That’s probably a good idea. I’ll call him and let him know you’ll be calling." | |
| Lawyer: | "I appreciate that. I’ll check with you to make sure you’ve reached him before I call. When should I get back to you?" | |
| Joe: | "I should be able to reach him by Friday. Call me then if you haven’t heard from me." | |
| Lawyer: | "Thanks, again, for the introduction. Tell me about Jack. What kind of guy is he?" | |
| Joe: | "Pretty much a no-nonsense guy who’s always in a hurry because he’s really pressed for time on these acquisitions. Don’t waste time with a lot of chitchat. Just get to the point." | |
| Lawyer: | "I’m glad I asked. Without violating any confidences, what else can you tell me about his problem?" | |
| Joe: | "I don’t know that he’d appreciate my calling it a problem. He just needs someone who is experienced to help him wade through a large volume of complicated transactions and make some sense of it." | |
| Lawyer: | "Can I say that you told me about the roll-up strategy?" | |
| Joe: | "No, it’s better if you keep quiet about that. It’s not official, although most people have figured it out. Let him tell you himself." | |
| Lawyer: | "OK. I’ll call you Friday to make sure you’ve reached Jack, and that he’s still interested in having a fresh set of eyes and ears for the structural tangle, then I’ll arrange to meet him. Thanks, again. I’ll let you know what happens." | |
Look at what we have accomplished with our disciplined discussion with Joe:
This referral opportunity is now under control. We won’t contact Jack until Joe has fulfilled his commitment, and Joe gave us the right to call him on Friday and expect it to be done. (During that call, to make sure we’re still on the right track, we’ll explore Jack’s reaction to Joe’s suppositions.) By contrast, think how much less confident we would be calling Jack without this discussion. Introductory Call Here is the conversation that should take place during the introductory call to Jack: | ||
| Lawyer: | "This is Ann Smith of Johnson, Jones & Cliff. Joe Brown suggested I call you. He planned to tell you I’d be calling. Did he reach you." | |
| Jack: | "Yes, he did. He says good things about you." | |
| Lawyer: | "That’s very nice of him. Joe said you were wrestling with a maze of corporate structures from recent acquisitions and that you’re really pressed for time on it. Is that right?" | |
| Jack: | "Actually, I think I’ve got a little breathing space on the structural problem now. I’m less comfortable with some issues regarding special classes of voting stock held by unions as part of a negotiated settlement at two of the acquired companies. | |
| Lawyer: | I won’t ask you to try to explain this by phone. Why don’t we get together and take a closer look at it? What’s your schedule over the next week or so?" | |
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You can see how easy it would have been, in the traditional model, to arrange a meeting
with Jack and launch into a presentation of your experience with corporate structure and
cross-border deals. Jack would be polite, but he wouldn’t really be listening, and
you would have virtually no chance of a sale because that issue had dropped in relative
importance since Jack and Joe last spoke. Today the action imperative appears to rest with
the securities issue. No matter how knowledgeable or confident your source, he isn’t
the buyer. That is also why it is so important to sell the meeting and arrange it as soon
as possible. | ||
| Dialog | Effect | |
| Ann: | On the phone you alluded to progress with the structural problems in your newly acquired companies. Congratulations. Joe thought they were really giving you some gray hair. How did you manage to get them under control? | Jack’s dismissal of this issue said nothing about final solution. Test for future opportunity before abandoning it. |
| Jack: | I didn’t say they were under control. I said I had some breathing space. I’ll still have to get to them within the next sixty days. | Reveals that original opportunity will be available again in near future. |
| Ann: | OK. Tell me about the unions’ special voting stock. | Move on to agreed agenda. |
| Jack: | They were a tradeoff for wage concessions. That sort of thing was fairly common during the last recession. | |
| Ann: | So why is that a problem now? | Despite your knowledge and experience in matters like this, never assume the problem is obvious. Get the prospect to describe it. |
| Jack: | We’re having a great year. Our stock is in the upper 200s, an all-time high. That’s the good news. The bad is that only institutional investors can afford the shares at that price and there aren’t enough shares outstanding to attract the attention of the big brokerages with national distribution. We want to do a split to get the share price down. Then we could issue enough additional shares to attract a big market maker and make the shares more attractive to smaller investors. | |
| Ann: | That makes sense. What’s the problem? | You’ve heard the situation, not the problem. Don’t assume or conclude. |
| Jack: | We can’t dilute the union’s holdings, and they’ll want to use this as leverage to renegotiate the wage concessions. | |
| Ann: | What happens if you can’t do the split and issue the new shares? | Explore the consequences of the problem. Is this something that Jack must do something about? |
| Jack: | We need the $25 million proceeds from the new issue to finance the rest of our roll-up. But union wage negotiations would be public and scare investors. We need to find a way to break the unions’ ability to block a new issue. | This is a qualitative response, i.e., the effect of doing nothing. Now quantify the tangible cost of doing nothing. |
| Ann: | What economic effect would that have on your company? | |
| Jack: | Half a roll-up is worth nothing—there’s no critical mass. If we can’t complete the roll-up, we’d probably have to sell off the companies we just bought. The vultures would eat us. Worst case, we might lose as much as half of the $20 million we already invested. | Now, your legal fees will be measured against the $10 million cost of doing nothing. You have positioned your service as a return on investment rather than a cost. |
| Ann: | How would that affect you personally? | Explore Jack’s personal consequences. |
| Jack: | I was brought in here specifically to pull off this roll-up. Need I say more? | Jack is a personal stakeholder. |
| Ann: | By when must you resolve this? | Test for Jack’s ability to delay a decision. |
| Jack: | We’ve been moving pretty fast for the past year. If we stand still for more than thirty days, someone will start to smell that something is wrong. We don’t want to be the subject of financial reporters’ speculation. | There are real penalties for delay. |
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At this point you have proven to yourself that this is a legitimate sales opportunity. We have found an action imperative. Jack must act and he doesn’t have the luxury of delay. Legal fees will pale in comparison with the $10 million cost of doing nothing. Only now can you begin to explore the legal facts and talk about how you can help. You’ll notice that we haven’t done any presenting yet. That is intentional. The sale has nothing to do with us, our firm, or our services, although getting in the door certainly does. Buyers only invite for consideration those they believe qualified. Selection and preference is based on the buyer’s perception of the effect we will have on the company’s business processes and how well we can satisfy the buyer’s personal needs. Make the sale first, and only then present your solution. Conclusion The key to selling is investigation, not presentation or persuasion. Learn what someone must give up time and money to get. Then, don’t make abstract claims such as "We have handled some of the largest restructurings in the industry." Present only concrete examples of relevant situations and successful buying decisions by clients most like this buyer, and who are willing to receive a reference call to substantiate your claims. Buying will be much easier for the prospect, and selling will be easier for you. Table 1 12 Questions for Client or Prospect Calls
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