Exchanging business cards at networking events is part of most law firms’ business development activity. Bob Spence looks at why this may not be the best use of time, and how else you can build your network and win new business
Networking is a recognised component of business development for legal services. There are variants of the networking approach, but the basic structure requires meeting and greeting a volume of fresh connections, often including a professional ritual known as the ‘business card exchange’. This can include variations of the ‘elevator pitch’ or ‘60-second introduction’. It can be done informally at mixer events, or formally within the context of a ‘speed event’ where everyone gets the chance to communicate who they are.
But does it actually work, or is there a better approach? We interviewed 43 business development professionals, across central Europe, the UK and the US, to find out.
Those we spoke to identified three key areas of focus in their professional lives as ‘rainmakers’:
- the ability to create the ‘right’ connections
- the use of time to create those connections
- the likelihood of a result through those connections.
All rainmakers planning to attend a networking event thought first about the specific network of contacts they required. They asked themselves: “Will this evening of small talk and card-swapping have a high likelihood of connecting me to my professional and commercial goals?”
In this article, I look at the inherent challenges of the business card exchange, how to stand out from the crowd, and whether networking is really the best way to win business.
The challenges of business card exchange
There are a number of key challenges inherent in the business card exchange process.
First, it takes place in an exceptionally noisy environment. Your card is competing with the recipient’s existing connections, and their existing lawyer and/or legal supplier. What is the likelihood that your card and face will make any impression on your contact when they are bombarded with information and marketing every day?
Second, business card exchange relies on your new contact remembering you the next time they need legal advice, which may be some time into the future. The German psychologist Dr Hermann Ebbinghaus pioneered the study of memory. He theorised that after 30 days, only 20% of new unused content can be recalled. How likely is it that your new contact will remember you at all 12 months down the line?
Finally, we live in an age of similarity. Your contact will have met many people with a similar offer, similar skills, a similar approach, a similar education, a similar benefit case, similar arguments and a similar business card exchange.
So, for your business card exchange to result in any new business, you need somehow to make an impression on your new contact, stand out to them and be memorable. How can you achieve this?
The value of your existing contacts
Is there a more effective approach to achieving results than the business card exchange?
The well-known Pareto principle (often known as the 80/20 rule) states that, for many events, roughly 80% of results come from 20% of the causes. In business development terms, this would suggest 80% of a law firm’s business would come from 20% of our contacts. Does this hold true?
Developing existing relationships produces more value than constantly sourcing new ones
In our research, we found that, in fact, successful rainmakers focus their attention on even fewer contacts when trying to secure fee-earning retained relationships. They actually looked at about 80% of that 80% (64% of their client base). The median number of contacts our rainmakers focused on was 25: just 25 connections were producing 64% of the firm’s business. They were all looking at working within a smaller group of contacts and raising their profile to a smaller targeted audience.
This suggests that time focused on replicating previous success with a small group of valued and loyal contacts will bring significantly more success than time spent trying to build up a broader network of contacts. Developing existing relationships produces more value than constantly sourcing new ones.
Also, never forget that unless you micro-manage your key contacts, they will be appearing on someone else’s prospect list, and you may well be displaced.
How your existing network can help you
Those strong, key relationships can also provide a more successful route to new clients than the business card exchange. Last year’s best client can introduce you to this year’s best client.
To understand how to leverage this, we looked at the concept of “six degrees of separation”. This is the idea that all people are six, or fewer, social connections away from each other. As a result, a chain of “a friend of a friend” statements can be made to connect any two people in a maximum of six steps.
We developed a business development algorithm, based on our research, to look at how successful it can be to leverage your contacts, your contacts’ contacts and so on.
The algorithm showed these results.
- At one degree of separation (someone who knows you well (A) introduces you to someone who they know well (B)), the maximum probability of the introduction resulting in new business is 82%.
- At two degrees of separation (someone that knows of you (B) – through someone else they know well who also knows you well (A) – introduces you to a third person (C)), the maximum probability is 17%.
- At three degrees of separation (a person that knows of you (C), through someone else (B) that knows of you, through someone else who knows both you and B well (A), introduces you to a fourth person (D)), the maximum probability is 0.8%.
If these were financial odds, would you even consider anything beyond one degree of separation?
All this suggests that the best value you can get from your business development activities is not from business card exchange, but from reinforcing the relationships you already have, and equipping those contacts to be able to introduce you to people who they know, but to whom you are not yet actively connected. You are not looking to appeal to everyone or connect on a volume basis, but on a select agenda. Sticking to the one-degree rule should help you achieve this, as introductions will be facilitated by someone who knows both you and your new contact well, helping ensure that you have the right “social-commercial-comfort” for that specific audience (see below).
This won’t help you source immediate work, but will help you raise your profile within your marketplace.
How to stand out
As part of our research, we worked to define what it is that can make a specific connection meaningful to a potential new client. We have called this “social-commercial-comfort”.
This is made up of two other factors: “bespoke social capital” and “‘off-the-peg’ commercial capital”.
Bespoke social capital is what you offer as a connection that makes you stand out from other lawyers and law firms. Essentially, this is the quality of your own professional network and what else you may represent to current and potential clients, outside of your legal offer. For instance, your connections and profile in, say, commercial property, could mean as much to them on paper as your legal skill. Who you are associated with can count as much as what you are associated with. Your off-the-peg commercial capital is your practice offer or your professional skillset.
Social-commercial-comfort is the total perceived value of being connected to you professionally. This value can be increased through a number of actions, including:
- volunteering to sit on committees appropriate to your target market
- speaking at professional events that generate gravity for your profile in your market
- being visibly connected to high-profile non-legal professionals who are recognised as credible within your target market
- writing articles for or volunteering comment in publications that match your target market
- being seen to attend conferences that are recognised as credible with your market.
These generic examples are the activities that you would expect from a leading professional within your target market, and although they can be time-consuming, they all help build your social-commercial-comfort, so you become (and continue to be) a professional who is easy for your contacts to refer to others. You want someone to be able to say of you something like: “I would like to introduce you to Bob Spence. He spoke at the ABC Bar Association last month and is a leading member on the DEF committee, which runs the GHI annual conference.”
Social-commercial-comfort frames who you are.
What value can raising your profile bring?
One of the key benefits is in helping you source information about the sector and specific businesses which could give you the intelligence to make focused decisions to win new clients.
These days, public information about a business’ plans is often easily available from a variety of sources, including the internet. Private or offline information has therefore become a much more important tool in business development. This might include:
- the release date of a new product that requires capital
- unpublished expansion plans regarding a commercial property transaction
- knowledge about what a particular buyer looks for when appointing a lawyer.
This type of information is gathered from personal contacts who can offer something unique that cannot be found in the public domain.
Directly winning new business isn’t the only goal of building your network. If you build it effectively, so that you become known as a centre of influence or someone who is ‘in the know’, you can become privy to the types of information on which you can base perfectly targeted business development efforts. And this becomes a virtuous cycle: the more you know, the more valuable you will be to current and potential contacts as a key source of knowledge and intelligence about the sector – meaning your network will become broader, richer and more effective, with less and less effort.
All our rainmakers made sure that they were ‘referable’ within their network, and that their potential knowledge made them someone worth connecting to.
I hope this article has made it clear that, no matter how powerful your business card exchange approach, the likelihood of creating work through random card-swapping is low.
Instead, I recommend you focus on leveraging your client book to win additional business from current contacts, building your network through one degree of separation, and developing and communicating your social-commercial-comfort.