Best Practice: Insurance Defense Law Firms - Risks and Strategies
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the managing partner of a 22-attorney firm in Des Moines, Iowa. Our practice is 100% insurance defense representing insurance companies and their insureds. We are aware of some firms such as ours that have had to close their doors during the last few years. What should we be thinking about? You ideas would be appreciated.
A. Insurance defense law firms that have been approved as panel counsel for multiple insurance companies can inadvertently find that their revenue base is increasingly dependent on a shrinking number of insurance companies over time.
- Small number of companies representing the lion's share of the firm's revenues
- Changing Rules for Insurance Panels - General Industry Consolidation
- Insurance Companies putting work "out for bid"
- Trapped by a "Paradigm of Pass Success" and failure to institutionalize business development processes and practices
- Promoting an "entitlement generation" of partners with no business development skill
- Failure to stay abreast of changes within the client's organization. (Needs, players, policy changes, etc.)
- Aging/retirement of founding partners
- In house assignments
- Departing partners
- Lack of time and focus to allocate to new business development
- Use a structured client feedback process to obtain hard data from your clients on firm performance, client satisfaction, projected case assignments in the future, your firm's share of the client wallet, changing management (people) and policies, unmet needs, and future opportunities.
- If you don't have one develop a strategic plan and a marketing plan (including a specific budget) for the firm.
- Diversify the client base. Target new clients. Aggressively pursue new panel applications, track submissions, and monitor. Once approved - look for opportunities to build relationships. Consider educational forums and venues.
- Determine if regionalization is an appropriate strategy for your firm. (Ask your clients)
- Look for ways to obtain additional business from existing clients. (Ask your clients)
- Write and publish more articles - externally and internally (website).
- Beef up the blog on the website.
- Get more attorneys in the firm involved in business development.
- Develop a succession plan for the founders.
John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at email@example.com.