Welcome back to the Big Law Business column on the changing legal marketplace written by me, Roy Strom. This week, we explore how sales professionals are already playing a role in the Big Law market. Note to readers: We’ll be taking a little time off around the holidays, but this column will return on Jan. 9. Happy Holidays and New Year!
I recently wrote a story for Bloomberg Businessweek following up on Wilson Sonsini’s year-old software subsidiary, SixFifty. The Lehi, Utah-based business expects to make about $4 million this year selling semi-automated advice that helps companies comply with the California Consumer Privacy Act, which takes effect Jan. 1.
One of several unique aspects of SixFifty’s story is that even though it’s a law firm subsidiary, it’s doubled down on an activity firms have long ignored—"sales.”
Even the term itself remains taboo in a profession that banned advertising until 1977. While many law firms increased their digital marketing budgets in 2019, few have any formal plans to train their marketing or business development teams in sales skills, according to a new LexisNexis survey of marketing and business development professionals.
And yet, at SixFifty, the sales team is the largest division in the 15-employee company, said Kimball Parker, its president. SixFifty brought aboard three WeWork sales executives in November after the shared office space giant’s IPO floundered.
SixFifty’s new head of sales, Matt Jacobs, sold faucets and online education services for mortgage professionals before joining Parker’s growing team in May.
“He is just a traditional sales guy with no connection to the law at all, which was the best choice we’ve ever made in this whole project,” Parker said.
The SixFifty team is an example of the stark differences between the law firm business model and the growing market for subscription-style services that some Big Law firms hope to sell. Relationships might be the coin of the realm when the consumer wants advice from a trusted counselor. But when legal departments need products that solve specific problems, the skills of a salesperson can be a differentiator. And sales is a muscle law firms will need to train.
“If you really get to the DNA of, what is a law company and what is a law firm, most people talk about the ability to practice law,” said Liam Brown, head of law company Elevate Services, which is one of a growing number of alternative legal service providers.
Brown said, though, that what really differentiates his company from a law firm is that Elevate has enterprise sales team.
To be sure, SixFifty and Elevate are far from the first companies to sell products and services to lawyers. Legal research companies, technology vendors,and plenty of others have had the infrastructure to do this for years. But law firms simply don’t think about getting new business in terms of “sales.”
“You can’t make the lawyer make a sales call,” Brown said.
Parker, who has a Big Law background, said he had a lot to learn about sales. He figured product demos were the bulk of the sales process. But he learned there is a lot more to it, like developing processes to follow up with hundreds of leads, keeping customers happy, and learning how and when to push deals along.
“I don’t have that skill,” Parker said. “That takes a lot of know-how. More than I anticipated.”
Jacobs, the SixFifty sales lead, said there has been a learning curve on the part of in-house lawyers and compliance professionals who aren’t used to being sold products. Potential customers are initially curious about the product, but they also require some education on the technology and the CCPA itself.
“They are not used to seeing legal technology sold as a turn-key solution that works for their company in addressing a law, let alone a new law that they might not have their arms around yet,” Jacobs said, referring to the CCPA.
Elevate’s Brown said most law firms won’t be successful developing subscription-style sales businesses like SixFifty. Building—and compensating—sales teams is just one part of the challenge, he said. Another is convincing partners to spend money developing a new business model.
“An investor would say, I can live with blowing $2 million,” Brown said. “But will the partnership?”
Worth Your Time
On Law Firm Mergers: FaegreBD and Drinker Biddle Reath finalized a merger that will create a firm with revenue expected to reach more than $950 million, a threshold topped last year by 41 U.S. firms.
On Legal Tech Mergers: “Platformization” in the legal tech space is expected to continue next year as the major companies seek to grab buyers’ attention and cash by giving them multiple tools they need on a single platform, my colleague Sam Skolnik reports.
On Law Firm Lawsuits: A Fox Rothschild labor and employment lawyer, Ian Siminoff, was fired by his firm after he was accused in a new lawsuit of sexually harassing a former administrative assistant. Fox Rothschild was also named in the complaint.
On In-House Moves: In a wild week of moves inside corporate America’s legal departments, Coca-Cola Co. announced its long-time GC will be retiring in 2020; Richard Branson’s Virgin Galactic Holdings Inc. hired a new general counsel; and Bed Bath & Beyond’s top lawyer Allan Rauch is departing after more than 25 years at the home goods retailer.
On 2020 Predictions: A lot of smart people provided more than 25 predictions on how the legal services market will change in 2020. Many of them see some U.S. state bars crossing the finish line with significant regulatory changes.
See you next year. Thanks for reading and please send me your thoughts, critiques, and tips.