Law firm finances – Banking

A recent survey of small business owners by SurePayroll has produced some interesting results concerning business relationships with banks:

•    Businesses believe that all banks offer about the same products and services
•    Less than 10% of those surveyed take the time to evaluate the bank’s products and services
•    Banking has become a commodity
•    Owners select their business bank because of the following
    •    Familiarity (30% based on where they have a personal account, while 65% have both personal and business accounts at the same bank)
    •    Location (26% based on proximity either to home or business)
    •    Referral from a friend (10%)
    •    Previous relationship or business with the bank (10%)
    •    Being a member of a group that recommends the bank (5%)

Other interesting findings of the survey:
•    79% said they use on-line banking if available
•    54% said they have one point of contact with the bank and, of these, 80% said their banker would recognize them and talk with them if they met outside the bank premises
•    84% said they would refer their bank to a friend.

Banks, according to the survey, face a challenge similar to that of many lawyers: How to differentiate yourself in the market.  But, the survey does exhibit one characteristic in their banking relationship that escapes most lawyers: Loyalty.  More than 80% said they would refer their bank to a friend.

Also, like lawyers, there seems to be "one point of contact." This suggests that business will go where the banker goes. In other words, the banking business may be "portable." Lawyers face a similar phenomenon, a possible cause for the freedom many lawyers feel in making lateral moves from one law firm to another.

The conclusion of the banking survey seems obvious for lawyers:  Lawyers who develop a strong banking/business relationship with their bankers have an opportunity to enhance not only their financial health but also their referral base for increased revenue.

See The Successful Lawyer-Banker Relationship: A LawBiz® Management Special Report, where we discuss some of the services and products that banks can offer lawyers; how banks can assist the growth of their law firm customers by cross-referring bank patrons; as well as how a good banking relationship aids the health of the law firm.

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