Establishing Your Legal Practice By Identifying the Right Geographical Area

Camille was a recent law school graduate and new associate with a large metropolitan firm. After her undergraduate work and prior to law school, she had worked for a property development firm as a land use consultant. Therefore after law school, it was logical for Camille to put her efforts into land use law.

She felt that her knowledge of commercial real estate from a developer's point of view would help in her dealings with developer clients. Camille gathered information from her own firm regarding commercial developer client matters, including past revenue. She outlined the top revenue producing clients and marked on a map the area in which these clients had offices. She then gathered information regarding all commercial property developers within this area and through members of her firm and colleague contacts, attempted to pinpoint upon whom these developers depended for legal services.


Camille's objective was to build her practice by aiding the efforts of her firm in serving its current clients but also to add to the firm's client roster by winning new profitable clients. Her rationale for client potential was based on her geographic analysis. In a word, the area was underserved to say the least. Her modus operandi was a very active role in the targeted community. Because she lived far away enough from the area to require a 45-minute drive on the expressway, Camille moved into the area. Her living expenses increased as a result, but she anticipated future income would be her just reward.

THE 80/20 RULE

The 80/20 rule says that 20 percent of all clients constitute about 80 percent of all revenue. As a generalization this rule may be unscientific and unspecific, but it has many applications in business operations, including law firms. This rule can be used to guide market research and definition and more specifically, geographic markets. Attorneys who decide to serve a specific geographical area need to know their real boundaries. Although they may believe that their clients live and work within a certain metropolitan or regional area, they are better served by a closer analysis. To target a geographic area successfully, they need to know the location of the 20 percent of clients producing 80 percent of their revenue. Clearly this provides the geographic area which holds the most potential for business development.

An attorney can begin this process by analyzing U.S. Postal Service zip codes. Which area zip codes represent 80 percent of the law practice's clients? Which zip codes represent 80 percent of the practice's revenue? What relationship exists between these two geographic areas and to what extent does the 80/20 rule apply?

It should follow that the attorney's best opportunities for additional business are found in the geographic area defined by this quick 80/20 analysis.

Even if the attorney wants to change his or her practice focus to another "uncharted" or "unknown" geographic area, he or she should be able to go through this exercise on a hypothetical level, using intuition to gauge where the 80/20 rule might apply. Obviously intuition must be grounded on logic and facts.

APPLICATION

Having determined where most clients and revenue come from, how can this information be utilized? To start, once a preliminary geographical area has been outlined for client development, the attorney can focus energies and resources toward a smaller target.

Consider the attorney practicing in Cook County, Illinois. That attorney is more likely to build a successful practice by attempting to focus on one part of the Chicago area. The same is also true of an attorney practicing in a less densely populated, albeit even rural, area. A more successful practice will result from a rifle rather than shotgun approach to a target market.

Many lawyers do not define their geographic market. Their practice theory is that by building a better mousetrap, success will surely follow. Geographic convenience is an often-overlooked criterion of attorney selection.

COMMITMENT TO THE AREA

To serve clients and fill their needs effectively, it is important to understand all their concerns, not just their legal problems. In the geographic segment context, this is relatively easy. By becoming active in community and civic affairs, an immediate difference will become apparent!

These activities should not be approached with the idea of gaining recognition and exposure for the attorney's practice, as is usually espoused, but rather with the opportunities to learn and truly understand the objectives of the market area targeted. Activities in which the attorney is particularly interested must be selected or involvement will inevitably be shortlived. All manner of community and civic organizations are in desperate need of talented volunteers. To the extent that the attorney can resolve conflict and/or liability exposure, as interpreted in their jurisdiction, a lending of professional expertise can be appropriate and helpful.

Organizations need parliamentarians; writers; and interpreters of constitutions and bylaws, contract reviews, and similar matters. Beyond that, they need good advisors on their boards and of course fund-raisers. One attorney took his geographic market to heart and became involved with a local amateur theater festival. In the process of serving on the board of the local theater festival company, he learned a great deal regarding his community's concerns for performing costs in time and money. At the same time, he became acquainted with some of the influential people in the community whose views shaped the community's agenda. Incidentally, his tax practice flourished, not because he deliberately tried to leverage his contacts but because a good deal of mutual respect evolved between him and his new clientele. The theater festival was a big event socially, artistically, and economically. By becoming heavily involved, he in essence demonstrated community affinity.