"Like any alliance, a strategic alliance with an attorney is a mutually beneficial relationship, a two-way street. Both parties take actions designed to help the other grow their business."

Attorney Privilege

By John Bowen

The most successful financial advisors know that in order to move up market and serve wealthier clients, they must build the right relationships with the right people. By creating a web of trusted relationships in a select community of affluent investors, elite advisors position themselves to receive the lion's share of referrals from these investors. In turn, this leads to new business in this community and a further strengthening of the bonds of trust.

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But all of the opportunities for you to grow your business by building relationships don't end there. By forming strategic alliances with select attorneys, you'll gain access to their clients at the times when they most need your assistance. Most notably, you will position yourself to receive referrals for clients who have just received inheritances or are in the process of restructuring key aspects of their financial lives.

Like any alliance, a strategic alliance with an attorney is a mutually beneficial relationship, a two-way street. Both parties take actions designed to help the other grow their business. In the most successful alliances, the financial advisor provides the expertise that the attorney needs to enhance and build his or her business. In exchange, the attorney provides the advisor with a series of qualified affluent client referrals.

There is one type of attorney who offers the best prospects for partnership in a profitable strategic alliance—the private client lawyer. Because of the influence they have with their wealthy clients, private client attorneys are perfectly positioned to guide qualified new business your way.

Other lawyers who work with affluent clients who have money in motion (for example, divorce attorneys, merger and acquisition attorneys, and entertainment attorneys) also can be good strategic alliance partners. However, no other type comes close to the private client lawyer in terms of working with a consistent stream of the wealthiest clients.

Broadly defined, the private client lawyer is a specialist in the areas of trusts and estates as well as asset protection. The private client lawyer provides a specific set of services to the affluent, including planning services like estate planning, asset protection planning, and income tax planning, as well as other services ranging from administration services to probate services and guardianship services.

Studies by my research partner, Russ Alan Prince, show exactly why private client lawyers are the ideal type of attorney for strategic alliances. First, private client lawyers are inclined to refer their clients to financial advisors. One Prince survey showed that private client attorneys refer 10 percent of their clients on average to investment professionals. Even better, the average amount of investable assets per client was about $2.7 million. So referrals from private client lawyers clearly have the ability to put significant wealth into motion.

Second, the research showed that these referrals often result in new business for financial advisors. In fact, nearly three-quarters (73.2 percent) of clients said they used the financial advisors referred to them by their attorneys.

Third, many private client lawyers are actively looking to make referrals. The research showed that one-fourth, or 24.7 percent, of the surveyed private client lawyers were actively looking for eligible clients to refer.

Perhaps best of all, we know that there's plenty of opportunity for financial advisors who partner with private client lawyers. The Prince research discovered that even though many private client lawyers would like to make referrals, investment professionals largely fail to seek out these referrals. Three out of four of the lawyers surveyed had not been approached by a single investment advisor in the previous year. This spells opportunity for those financial advisors who do take the initiative in contacting private client lawyers.

If you choose to pursue opportunities in this important market, I recommend you follow a systematic process for formulating your strategic alliances. The following 12 steps will maximize your chances for success in this area.

Step 1: Determine the most suitable potential partners. The best choices are the attorneys of your wealthiest, most ideal clients. From among these attorneys, choose those trusts and estates lawyers who serve the high end of the market. If none of your clients have existing relationships with the right type of attorney, your second option is to contact the American College of Trust and Estate Counsel (www.actec.org) to get the names of trusts and estates attorneys in your city or state.

Step 2: Narrow the field to the top five candidates. Narrow your list of lawyers to highly respected attorneys in your area who share your target market. In narrowing your choices, it can be helpful to create a profile of what your ideal strategic partner would look like. For example, the ideal partner should work extensively with wealthy clients in your market, be entrepreneurial in business outlook, be interested in growing his or her legal practice in innovative ways, and share your ongoing commitment to client service, integrity, and basic professionalism.

Step 3: Make the initial call. Contact your potential partners and set up appointments to discuss the joint opportunities that exist for working together. Your goal with this call is to explore ideas for how a strategic alliance might be mutually beneficial to both parties. In my experience, when advisors contact targeted private client lawyers, they nearly always receive a positive response. There is a simple reason for this; these attorneys need your help with business development.

Step 4: Open the exploratory meeting. Remember that in every meeting, the other party is always asking themselves, "What's really in it for me?" This makes it your job in the initial meeting to clarify that there is tremendous value available if the other party is the right candidate for a strategic alliance with your firm. It's important for you to project this image firmly and confidently. Your time is extremely valuable, so your objective for the exploratory meeting is to determine if the attorney is the right partner for you and if you should continue the exploration process.

Step 5: Conduct the interview. Ask the potential partner a series of questions that will help you gain a better understanding of his or her practice and how you might work together. Your strategic alliance candidate will judge you by the quality of the questions you ask, so prepare in advance an interview guide of eight to 10 key questions. For example, ask about the biggest challenges the attorney faces. Also find out about his or her experience, if any, in working with other financial advisors.

Step 6: Close the meeting. This is a key decision-making point. If it doesn't makes sense for you to form a strategic alliance with the attorney, simply thank the person for his or her time, ask for some business cards for potential future contact, and move on. But if working with the attorney seems like it would be an exciting opportunity, however, then arrange for a second meeting.

Step 7: Identify opportunities to work together. Use your second meeting to gather the balance of the information that is necessary to formulate your business enhancement recommendations. You should again use an interview guide to help you systematically uncover any significant business-building opportunities.

Step 8: Draw up your recommendations. Using both the interviews and notes from the two meetings, assess the range of marketing and client development challenges the attorney faces. Make a list of the top five challenges you identified. Drawing from your expertise in marketing and client relationship management, describe five specific recommendations that will address each of the attorney's major concerns. Your marketing ideas can come in any number of forms; the key point, however, is they must ultimately result in more affluent client business for the attorney, as well as better relationships with his or her existing wealthy clients.

Step 9: Present your recommendations. Present your business enhancement recommendations to the attorney in the form of a PowerPoint presentation. At this point, you can paint the recommendations in fairly broad stokes; the details can come later. But do take care to specify individual positive outcomes that the attorney should expect to receive from implementing your ideas.

Step 10: Get agreement from the attorney. Address and satisfy any questions or concerns the attorney presents. Then obtain a firm commitment for moving ahead with your recommendations.

Step 11: Assist in implementing the recommendations. As soon as you get agreement on your business enhancement recommendations, help the attorney to carry them out. It is extremely important to have some successes early on in the process, in order for both parties to remain committed to the alliance long term, so work your hardest to ensure that this happens as soon as possible.

Step 12: Maintain the strategic alliance. Your alliance will thrive on informal contact. Call the attorney on a regular basis to check on the progress he or she has made with your recommendations. Be ready to fine-tune your recommendations as needed. At the same time, let the attorney know about the status of any referrals that he or she has provided to you. Meet for lunch or dinner as often as seems appropriate to maintain and grow your personal relationship.

The best and most successful strategic alliances between financial advisors and attorneys are a win-win situation for all involved. Attorneys are able to offer clients qualified referrals to a financial advisor who is well equipped to assist in solving their financial challenges. And the attorneys receive important business assistance that will help them address their key concerns. At the same time, you will obtain a significant new source of assets under management and do so in an extremely cost-effective manner. A high-level strategic alliance will open new doors, build trust, and create new business opportunities for both you and your alliance partner.