Nobel Laureate Discovers Why Attorneys Undermine Their Own Business Development

It’s a psychological minefield trapping even the brightest of legal minds.

Prospect Theory – developed by psychologists Daniel Kahneman and Amos Tversky in 1979 – explains how people make decisions when facing uncertainty. It especially applies when outcomes are unknown. The following 4 key insights help you eliminate the negative impacts and drive business development:

4 Psychological Obstacles Attorneys Face

People are more sensitive to losses than to equivalent gains. Here’s why it matters:

Losses Loom Larger Than Gains

• • People are 2x more sensitive to losses than equivalent gains.
  • For attorneys, this amplifies the fear of failure or rejection, leading to inaction.

Amplified Fear of Loss

• • Losses are perceived as bigger than they actually are.
  • The mere possibility of a setback stops attorneys from making the first move, whether it’s sending an email or asking for a meeting.

Diluted Perception of Gains

• • Attorneys focus on short-term gain (like billing hours) instead of the massive long-term value business development creates.
  • They see the “change” in compensation rather than the transformative growth a new client relationship could bring over the years.

Overweighting Unlikely Wins

• • Attorneys overestimate low-probability events (winning an RFP) while undervaluing high-probability ones (expanding work with existing clients).
  • This leads to unproductive time chasing and it demoralizes attorneys.

Overcoming Obstacles from Prospect Theory: Practical Strategies

There is much more to Prospect Theory than these 4 elements – but these 4 matter most when it comes to business development.

How to Overcome These Obstacles

Rainmakers instinctively sidestep the traps of Prospect Theory. They focus on upside potential, not perceived risks. To help your attorneys do the same, implement these strategies:

1. Create Awareness

• • Teach attorneys how Prospect Theory works and how it affects their decision-making.
  • Use training, reading materials, and role-playing exercises to spotlight these behaviors and reframe their mindset.

2. Talk About Gains

• • Shift the conversation from risks to rewards.
  • Regularly highlight the benefits of business development – financial gains, professional growth, and long-term career impact.
  • The more gains are emphasized, the quieter the fear of loss becomes.

3. Introduce Performance Coaching

• • Move beyond traditional business development training.
  • Performance coaching helps attorneys overcome psychological barriers, much like Wendy Rhoades does for traders in Billions.
  • This approach targets the personal blocks that stop attorneys from reaching their full potential.

Boost New Business and Engagement

Helping attorneys overcome these barriers isn’t just good for them – it’s transformational for your firm. Here’s what you gain:

• • Better engagement: Attorneys feel motivated and excited about pursuing business.
  • More new business: Efforts shift to high-probability opportunities that deliver results.
  • Increased productivity: Time and energy are better spent on strategic pursuits.
  • Higher retention: Attorneys feel empowered by their success, improving satisfaction and loyalty.

Lead the Pack

Prospect Theory doesn’t just explain the problem – it shows the way forward. By creating awareness, focusing on gains, and offering performance coaching, you can help your attorneys unlock their full business development potential. The results? Engaged lawyers, new clients, and a competitive edge in talent retention and growth.

Master Prospect Theory, and you’ll master the art of big law business development.