To create options for yourself as a lawyer and control your destiny, you should have your own book of business. Lawyers with a solid and active book of business, often referred to as “rainmakers,” have the most options and can work where and how they want.
The question is whether you have a large enough book of business and how to know what counts. A book of business is the clients who come to you for advice and will continue to come to you even if you change firms.
You build a book of business by developing trusted relationships with clients and prospective clients. You become their legal counsel.
How do you know if you have a book of business? Well, here are some pretty clear signs:
- Your clients will leave the firm if you do- and follow you.
- You are the reason the client is at that firm in the first place.
- Your initiatives continually bring in business.
In the rest of this post, I go into more detail.
What is A Book of Business?
This question is not as straightforward as you might think. When we calculate your book of business for a lateral move, we consider your move’s full impact on the future firm.
The real question is, what business can you reliably promise to another firm?
Firms are looking for stability, predictability, and potential. If they commit to paying you based on your promised $1 million in business, they want to ensure that you will reliably bring in $1 million in business.
You want to be careful not to exaggerate your book of business. It can be a very uncomfortable conversation at the end of the year if you don’t deliver.
You also don’t want to underestimate your book of business since this will limit your negotiating power and earning potential. A slight underestimation usually works well: you can always agree to a salary at one level with a bonus for bringing in more business, but not bringing in enough business can be very uncomfortable.
When valuing your book of business, this is what we (and firms) look at:
First: Your portable clients.
The clients who will move with you from your current firm to the new firm are likely the most important and easily calculated fraction of your book of business.
The test here is whether the clients will move if you move. Just because they are working with you doesn’t mean they will move with you. So start with an honest assessment of how much business will make the move.
You may not currently receive all the origination credit for this business at your current firm.
Imagine you bring in business from a client that a partner played golf with 30 years ago. For whatever reason, that partner still gets origination credit, but the client would stay with you if you change firms. This client would count as yours.
Whether these are your clients or not, whether you get credit for them or not, the question to ask is how much business you reliably bring into the firm.
The acquiring firm will look back over the last three years and consider the dollar amount of business you bring in from all sources.
If you reliably bring in $1.2 million from various sources and clients, and you know this business will come with you, then you can consider it a part of your portable business.
Second: Your potential for growth
This fraction is business that you know you could win if you had the right platform or could serve your clients in the “right” way.
An excellent example of this potential is business that you are turning away because your firm can’t meet the prospective needs.
Maybe you have contacts in another state that repeatedly bring M&A deals to you, but since your current firm doesn’t have an office in that state, you can’t serve them.
If you’ve had to turn them away a few times in the last year and you are sure it will continue, you can take credit for this potential.
Alternatively, if your new firm has a better reputation in certain practice areas, you may be able to bring more business from a good contact who was uncomfortable with your current firm.
The same goes for new specialty areas or adjacencies to your current practice. If your firm does not have the ability to serve all the needs of your current clients or prospects that want to work with you, but your future firm does, you can include this expected potential in your book of business.
There is a caveat, though—your book can’t be speculative.
Assessing your book beyond your portable business can quickly feel like a speculative exercise.
It shouldn’t be.
You should base any potential business or origination credit you include in your book of business calculations on real opportunities. These are clients you could have now or clients who’ve asked you to do the work, but you currently can’t take it on. Estimates can’t be a guess because you are promising a certain range of business, and it will be an uncomfortable transition if you don’t bring it in.
Think about under-promising and overdelivering – you may claim a lower amount now to ensure you overdeliver in your first year.
There is a balance: every firm believes that you are exaggerating your book of business, and they discount it slightly. So if you undersell and the firm further discounts your book of business, then you may be selling yourself shorter than you intended to.
How big a book of business do I need
The bigger your book, the better, but you want your own book, whatever the size. You can grow $250,000 to $500,000 to $1 million to $10 million.
If you don’t have the book of business you want, don’t despair.
Any size book of business gives you some benefit, some autonomy, and some power in the negotiation with your current and future firms.
And there are some things you can do to build your book of business.
First: start now. Book-building is ongoing, not a one-time task. It takes time, because it’s based on relationships, and relationships take time and effort to develop and maintain.
This is the one investment in your long-term career that you can make yourself, so take a step every day, every week, or every month. Just start building.
Another opportunity may present itself in succession planning.
Imagine there is a retiring rainmaker at your firm, and you take over their business. If you have a modest book of business and have proven that you can bring in clients, you may be able to negotiate origination credit.
That is not the same as being a service partner because the firm will lose these clients if you can’t take them over.
Sometimes, another firm needs your specialization and skillset, and they need a new lawyer for succession planning, but they still want to see that you can handle new clients. In that case, you need to have some book of business, but it may not need to be as substantial.
Own Your Business Rainmakers always win.
If you have your own clients, you are always in a stronger position than anyone else, regardless of the economy or what is happening in the legal market.
So whatever you did to get the business you already have, keep doing it and do more of it.
Simultaneously, think about other things that you can add to your repertoire, things you can do well and do consistently.
Lastly, you should write or update your Business Plan every year. It’s an opportunity to see what is working for you and will be useful when you are ready to make a move.
At Gillman Strategic Group, we dedicate ourselves to helping lawyers create options for themselves and take control of their careers. No matter what size your book of business may be, or even if you don’t have one yet, it is never too soon to start building your future as a rainmaker in control of your own destiny.
If you want to learn more about building your book of business, let’s talk.