Client Side Up

January 1, 2005

Finding a law firm that thinks it needs advice on the better management of client relationships is like trying to find a man who will admit to being a bad driver or who will say that he is not good in bed.

To be blunt…law firms, whatever they say, do not manage relationships as well as they could or should do and this is costing them money. Lots of money.

If your firm routinely discounts hourly rates, interim bills and final bills, it will be due in part to poor relationship management. If your firm wins new pitches but falls of existing panels on review, it will be due in part to poor relationship management. If your firm carries acres of unbilled time under “WIP”, it is due in part to poor relationship management.

Ten years ago this did not matter too much…There was more work than most firms could manage, more profit and more growth than firms could have dreamt about and a good deal of complacency and arrogance to go with it. The great weakness in the concept of competition is that if nobody is very good, everyone can fool himself or herself that they are all very good.

Things have improved of course; corporate clients are now more demanding and more discerning. More questions are raised about fees and service standards than ever before, but there is still an awfully long way to go.

This article is not a plea to dust off old ideas and to refresh tired practices. It is more serious than that. Now is the time for firms to undertake some serious self-analysis. True competition is coming. Over the next few years (and probably more quickly than most people now realise) the legal services market will change dramatically.

New providers…banks, lenders, affinity groups, will open new markets and deliver new services. Legal services will become increasing commoditised. Technology will be both more sophisticated and easier to use. Solutions will not be crafted (and paid for) on notions of distilled wisdom handed down from generations back, but by pressing a button. And law firms will have their own hard-nosed investors demanding a return on equity and effectiveness and efficiency at every level of delivery.

This then is the time for a fundamental strategic appraisal of how to maximise the return from a firm’s two biggest assets – its lawyers and its clients.

So, what should be done?

Making plans

On the basis that hope is not a strategy, the most important thing is to develop a plan…in fact several plans.

  • A plan for each lawyer’s personal development. Skills being at least as important as expertise, each plan should identify the key competencies required together with the training, mentoring and coaching resources available.
  • A plan for all prospective clients. Why would the firm be on the client’s buy list? How can that be translated into contact? Who are the key decision makers and influencers in the target client? What is the communication strategy? How is information disseminated around the firm about the client?
  • A plan for existing clients. Why did the client buy? Have those reasons changed in the light of experience? Who else does the client buy from? What is the risk of losing work and what is the potential for growing work? Who are the decision makers and influencers? What is the exposure to the firm in terms of number of contacts and frequency of contact? Is there brand loyalty or is the relationship based solely on economic criteria or individual personalities?

None of this, of course, is rocket science but without a planned, systematic approach that is linked to the strategic focus of the law firm, good relationship management is less predictable. In these circumstances relationship management becomes a matter of personal style where “rainmakers” build their reputations on self created models that they “own”, with know-how that does not easily transfer to subordinates and where the firm is increasingly at the mercy of partners working in their own silos, disinterested in the wider, long term interests of the whole firm.

Defining the client’s comfort zone

The analysis that is only barely outlined above needs to result in a set of actions that are followed through by everyone. I sum up this process as defining the client’s comfort zone.

Lawyers are very good at working in their own comfort zones…their preferred clients, their preferred subjects, and their preferred style of working. What is now needed however is a determined attempt to define the client’s comfort zone and then to place the lawyer very firmly in it.

Certain things will happen if lawyers work from within the client’s comfort zone.

For example, the lawyer will begin to see what aspects of legal services the client actually understands and can value. The lawyer will notice the relationship between risk, cost and value from the client’s perspective. The lawyer will also begin to notice whether speed is more important than 100% foolproof accuracy .

Defining the client’s comfort zone is like demisting a window that has previously hidden the value beyond it. Let the client see the value in work done on their behalf and the client will appreciate the service more, understand the importance of quality advice and be more prepared to pay appropriately for it.

If all this is the “what should be done”, what about the “how it should be done”?

This is less easy to see because the essence of good client relationship management is not about imposing a “one size fits all” house style.

Mapping concerns and preferences

Key, however, is to understand and to map the interests of the client. Not to rush to a conclusion about what is in their best interests based on a legal analysis of the issue or problem presented, but to take the time and trouble to understand how the client perceives the problem. What aspects of it are more or less troublesome; what range of outcomes are more or less acceptable; what ancillary issues are more or less important and what effect timing and cost will have on perceptions of success or failure?

All this must be seen not just through the eyes of the person instructing the firm but also from the points of view of others who may need to be influenced, persuaded and encouraged.

The result is not the simplistic focus on a particular solution, but the systematic development of a range of solutions based on the best possible understanding of the client’s range of interests.

Delivering solutions through skills rather than pure legal expertise

The focus then switches to finding the best way to implement or deliver the preferred solution based again on the client’s perception of what is valuable and valued.

This process of mapping concerns and preferences, then attending to needs in relation to the visibility of risk, cost and value, has very little to do with legal expertise. It is mostly about using those often under valued soft skills we too easily dismiss.

And herein lies an uncomfortable truth…clients do not generally value legal expertise because they have no parameters to judge whether it is good, bad or indifferent. Clients will, however, value people skills because they can make a value judgement on degrees of empathy, care, attention, responsiveness, thoughtfulness and helpfulness.

Clients are becoming more sophisticated buyers of legal services, but not based on qualitative judgements about the lawyers legal skills. Instead the judgements are made on grounds reflecting the economics of the relationship and the way the account is handled.

Too often in the past so-called client relationship management programmes have been about a few painless hours in the training suite listening to presentations on “cross-selling”. Law firms also have to move beyond believing all that stuff in their own very glossy client brochures extolling the virtues of putting the client “first” and how brilliant everyone is at being brilliant.

Client relationship management is not about cross selling, but it is about:

  • Developing lawyers so that they see the breadth of their role and are equipped with the soft skills they need to deliver the value their clients will see and understand.
  • Analysing the shape and make up of clients (and on an ongoing basis as priorities and personalities change) to ensure that service is aligned to perceived need and value is always visible, and
  • Always working within the overall strategic focus of the firm.

Take these thoughts, and then place your firm against the myriad number of possible new providers in the legal services market (and their decades of selling, marketing and relationship skills). Are your lawyers equipped with the skills to deliver a service that your clients will value in comparison? Is your firm going to rise to the challenge and invest now in the skills training and strategic planning that will be required?

Hope is not a strategy. So, develop your lawyers’ skills, and develop the best possible understanding you can of new and existing clients from the perspective of the client…then concentrate like never before on being not just good lawyers but truly outstanding relationship managers.

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