Whether you are the cross-seller or a cross-sellee, here are factors to consider when lawyers try to divvy up origination credit.
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I seem to be getting a lot of questions about origination credit. This has been a challenging year for many law firms and their lawyers, who are understandably concerned about their numbers as they go into compensation discussions.
While there are still the rare firms with lock-step systems, the vast majority of law firms reward the generation of business in some fashion. In firms with “eat-what-you-kill” systems, business origination represents a very significant part of the calculation; in most others, whether using an objective formula or a more subjective system, it still matters. Conflict can arise when lawyers work together to generate a new piece of business and have to place a value on the contributions the various parties made to landing the client. The person who had the contact often feels that is the ultimate factor; the lawyer whose expertise will be tapped often feels that element should be rewarded handsomely.
As my husband likes to say, “No matter how thin the pancake, there are always two sides.”
Business Development Allocation Considerations
There are no hard and fast rules about when or how to share, and every firm’s system adds nuance to this discussion. However, whether you are a cross-seller or a cross-sellee, here are some factors that should be considered when lawyers try to divvy up origination credit, taking into account the firm’s services.
- Original relationship. Most new clients spring from someone’s contact but the strength of that relationship is key. Did the lawyer go to kindergarten with the new client or is it a friend who is giving the firm a shot based on a long-standing personal relationship? The latter deserves a greater reward.
- How much work the cross-sellee puts into the effort to generate business. Was it an introduction over a one-hour Zoom meeting or did the colleague fly across the country for a pitch and then follow up with the contact for two years, providing substantive updates?
- What I call the “but for” factor. If the client wouldn’t have become a client but for the expertise or experience of the cross-sellee, this is significant. It’s one thing to generate routine contract reviews that any number of firm lawyers can handle; it’s another to bring in business in a new practice or geographic area due to a colleague’s unique credentials.
- Ongoing relationship. Will the originating lawyer be involved in matters going forward or turning the client over to someone else to manage, service, bill and cultivate? Continuing to maintain a personal relationship is a given; expecting a colleague to be the primary business contact moving forward is another issue altogether.
Sharing the Origination Credits
In a recent discussion about teamwork, someone shared a quote attributed to Ronald Reagan:
“There is no limit to the amount of good you can do if you don’t care who gets the credit.”
Not every collaboration deserves to be rewarded, of course. There are many efforts lawyers should make to be good firm citizens and generous colleagues. But, as the originating lawyer, if you do reward fairly and share the credit, others will be more willing to team with you to grow both your book of business and the firm’s bottom line. Recognizing and rewarding cross selling efforts can further enhance collaboration and drive the firm’s growth.
Additional Tips on Cross-Selling and Origination Credit for Law Firms
Detailed Plan
A detailed plan is key to any cross sell program. This plan should include specific goals, strategies and tactics for cross selling and a plan for measuring and evaluating the program. A detailed plan will ensure everyone is on the same page and the program is implemented correctly.
Importance of Origination Credit in Law Firms
Origination credit is a key part of any law firm’s business development strategy. By giving origination credit to the attorney who brings in the new client, law firms can incentivise business development and growth. Origination credit can also align the interests of individual attorneys with the firm’s goals, create a culture of collaboration and teamwork. And origination credit can attract and retain top talent, as attorneys are more likely to be attracted to firms that have competitive origination credit policies.
Problems with Traditional Origination Credit Plans
Traditional origination credit plans can be a problem for law firms. One of the biggest issues is that these plans focus solely on the originating attorney and don’t take into account the other attorneys who worked on the client’s matter. This can create resentment and conflict between attorneys and no incentive for collaboration and teamwork. And traditional origination credit plans don’t account for the complexities of modern law firm business, individual attorney goals vs firm wide goals.
Cross Selling in Law Firms
Cross-selling is a critical strategy for law firms looking to increase revenue and drive growth. By offering multiple legal services to existing clients, law firms can increase client satisfaction, improve client retention, and attract new clients. Cross-selling can also help law firms to differentiate themselves from competitors and establish a reputation as a trusted advisor. However, cross-selling can be challenging, particularly if attorneys are not comfortable discussing services outside of their primary practice area. To overcome this challenge, law firms can provide training and support to help attorneys develop the skills and confidence they need to successfully cross-sell.
Illustration ©iStockPhoto.com
More on Attorney at Work …
“Cultivating Internal Referral Sources”
“Six Business Development Strategies for Lawyers”
“Tips to Upgrade Client Communications During the COVID-19 Crisis”
“Rewarding Your Referral Sources”
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