Do you trust everyone who signs a contract?

I used to think I did.  Perhaps, I was too trusting.

If an entrepreneur or business owner came to me for help, I wanted to jump right in.  I wanted to help them structure the next deal or negotiate a financing transaction.  I wanted to offer legal insights that would accelerate the growth of their business.  My goal was to help them build their dream.

But I wasn’t always on the same page with my clients.  What some clients wanted was a lawyer that would just draft documents for them.  They really weren’t interested in the details and they viewed lawyers as “hired guns”.  It was always about closing the deal not building the relationship.

It’s just Marketing 101.  There is a difference between “relationship marketing” and “transactional marketing”.  I learned quickly that relationship marketing was better for attracting clients who valued working with me, and generally speaking, were willing to pay for my services.

When I first opened my law practice, I did some marketing research.  During my first year, I brought in 75 new clients.  That was a great start.  But where did they come from?  Which ones were most profitable.  I listed all of my clients in a spreadsheet.  And I realized that all of them came from just three sources: (1) direct marketing; (2) client referrals; (3) professional referrals.

Direct marketing meant that I met my clients at a networking event or I happened to tell them I was a lawyer.  Client referrals were the result of doing great work and having an existing client refer me to someone they thought needed my help.  Professional referrals came from a trusted adviser, like an accountant or consultant who worked closely with the CEO or executive team.

By analyzing the data, I learned that of the 75 clients about one-third came from each of the three categories.  What surprised me was that when I looked at revenues, only 10% of the revenues came from clients I met directly.  About 30% came from clients referred by other clients.  And 60% came from professional referrals!

After thinking about it, I realized that business owners don’t trust critical matters to a lawyer they just met at a cocktail party or networking event.  For bigger deals, or more successful businesses, clients needed someone they trusted, typically an accountant, consultant or successful executive to make a recommendation.  They needed someone they could “trust“.

Trust goes two ways.  Clients need a lawyer they can trust with their most important matters.  And lawyers need clients that they can trust will not take advantage of them, waste their time, or act unscrupulously.

Today, it’s getting harder and harder for people to do business.  More and more businesses are forming relationships strictly over the Internet.  More and more of my clients are “virtual” in that I don’t actually meet them in person.  Occasionally, I skype with them and see their face.  But typically I just talk with them over the phone and mostly correspond by email.

Don’t get me wrong.  I actually love the freedom of working from home (or traveling) and having clients all over the world.  I like working on computers and leveraging technology.  But it changes the way we build relationships with our customers and clients.

Fundamentally, customer relationships are based on trust.  How do you develop trust with people you don’t know and may never meet in person?

In the past, most clients were someone you met in person or were recommended by a trusted source.  We had a way to prequalify or filter out the “bad” customers.  Today, it’s different.   We attract customers and do business over the Web.  We sign contacts with people we have never seen, and would not recognize even if we were standing face to face, nose to nose.

Yet, trust is still essential to building strong relationships and successful businesses.  As a lawyer, I am often asked to draft an “iron clad” contract.  Clients say to me, “I’m not sure that I trust the other party.  Make sure that the contract protects me.”  My answer is always, “Don’t do business with people you don’t trust.  You can’t draft a contract strong enough to protect you from everything.  No contract will protect you from someone who is willing to lie, cheat or steal.”

Of course, that answer doesn’t provide a lot of comfort to clients who are looking to their lawyers to provide “bullet proof” protection.  But that’s not what we do.  We are not armed guards.  We are not business psychics.  We have not mastered every conceivable business strategy to end run an agreement.

What we do is to apply legal knowledge in ways that will strengthen your business relationships.  We do that by starting with clients or customers you trust.  Our goal is to clarify expectations, anticipate potential problems, offer simple solutions to complex problems, and document an understanding in a way that reflects a true “meeting of the minds” and helps avoid disputes or, at least, resolve them quickly.

It all starts with a simple rule.  Only do business with people you trust.  So, how do you pre-qualify customers you meet over the Internet?  Is it different than people you meet in person?

Roger Glovsky is a business lawyer who believes legal documents should be accessible, affordable and comprehensible. As author of, Roger coaches business owners how to draft and negotiate their own contracts through workshops, teleseminars and online programs. As founder of, he plans to make it easier for business owners to find the right legal documents when they need them. Originally from Massachusetts, he now lives in Boulder, Colorado.  

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