Why collaboration makes excellent financial sense
Recentresearch conducted by Heidi Gardner, demonstrates collaboration is far more lucrative for firms than previously imagined. To put it in simple terms, the more practice groups working with a client, the higher that clients average annual revenue. As demonstrated by the chart (see right) the increase in revenue between five, six and seven practice groups is exponential. Moving from four to five practice groups potentially doubles the revenue generated by that client. Furthermore, the research also shows exponential increases in revenue where firms work with clients across multiple locations.Certainly more than enough reason for firms to really focus on cross selling.Gardner identifies a number of reasons behind this phenomenon. Most notably, it seems that multi-disciplinary work is less subject to commoditisation. Namely, clients are less likely to look at this work as one off, and select firms for quality rather than price. As Gardner explains:"Whereas clients view an engagement involving single-specialty expertise (about a basic tax issue, for instance) as a commodity that can be awarded to the lowest bidder, they know that cross-specialty work is complex and harder."Heidi Gardner, Harvard Business ReviewThe news is even better for individuals in a firm. The benefits of cross-collaboration can often seem small. After all, most firms reward the 'rainmakers' rather than the collaborators. However, Gardner notes that those who do engage in collaborative work tend to get more referrals and accordingly generate more business. Word of mouth recommendations also increase, along with increased insulation against economic downturn.
How Clocktimizer can help
The problem with cross selling is often a lack of data. Often data exists, but is hidden away in timesheets or spreadsheets. Or worse, a dusty filing cabinet. Clocktimizer's drilldown functionality allows you to identify cross selling opportunities in seconds. Clocktimizer demonstrates a breakdown of the practice groups working with each individual client. From this, firms can ensure that clients are introduced to practice groups currently not supporting them.
Clocktimizer also offers a dedicated client page. This allows you to immediately see the current matters each client has running. The offers opportunities to identify potential work arising from current matters. Additionally, Clocktimizer offers data on which locations are currently working with a client. As such, firms can take advantage of the increased revenue that comes from working with clients in multiple locations. Firms can also identify the profitability of each type of work, to ensure the best possible returns.Finally, Clocktimizer's Social Graph feature allows firms to see how their teams are collaborating. The social graph visualises collaboration by connecting those fee earners working together for each client. It is also possible to display practice groups in different colours. As such it is easy to identify clients which benefit from collaboration across multiple practice groups.
Posted in Firm Intelligence,Clocktimizer
