The importance of enhanced client focus continues to ratchet up. With good reason. In the “battle for market share” your current clients are both more valuable and vulnerable than before. Further, as supported in numerous studies, nurturing and building current client relationships positively impacts client satisfaction, client retention, revenue and profitability and, ultimately, sustainability of the firm. That said, we’re frankly amazed that many firms are clueless about how to effectively manage their client relationships and continue in ways that are often counterproductive.
Let’s not forget, at its most basic level, the business of law firms is to serve client needs. No clients, no business.
The (very) good news is that these mistakes are not all that hard to fix – in fact, these are a whole lot easier than, say, trying a case in federal court or drafting a merger agreement. And, partners don’t (and shouldn’t) have to shoulder the entire burden. The many talented business professionals and others at firms can and should play a key role; they have as much stake in the future of the firm as do the partners.
Our goal here is to help you stand out in the eyes of clients, and to do so you need to recognize and avoid a few of the most common pitfalls we see firms fall into when it comes to managing key client relations. So, in the spirit of demonstrating to you that these are not in the least bit hard to address, here’s our Top Ten Mistakes list.
- Not knowing what keeps your clients up at night. This is the granddaddy of mistakes lawyers and firms make. Clients are looking for solutions to their business problems that go beyond legal answers. Knowing your client’s business, including dynamics of the industry they operate in, and what is especially worrisome to them will ensure your advice is on point and will likely open up additional opportunities for you and your firm. Become more than a “trusted advisor” – become one that is welcomed by the client. The firm’s business professionals can provide valuable insights here; this can even be out-sourced to eager grad students for a pittance.
- Failing to secure client feedback. Sure, it may feel a bit uncomfortable, but clients expect to engage with their professional service providers on the quality of the relationship. In fact, your clients are all asking their clients and customers how they’re doing. Acritas/Thomson Reuters found that only 16% of clients reported being approached for their feedback. This can make it a competitive distinction for firms that meaningfully seek and respond to client feedback. Importantly, it is a demonstration of personal interest in your client and can further solidify the relationship. One big caveat: failing to act on feedback is worse than not asking at all. Again, folks other than partners should lead these efforts.
- Believing that great lawyering is enough to maintain your client’s regard – and business. For the most part great lawyering is merely table stakes; there are many, many very good, nay, great lawyers out there. Numerous research studies confirm that client service trumps legal expertise in the eyes of clients. Great client service goes beyond great lawyering or the basic hygiene of delivering your work on time, promptly responding to emails, communicating effectively, etc.
What clients are increasingly demanding are solutions to their business problems – not learned legal analysis.
Other relationship-building activities include onsite seminars, providing business referrals; the list of possibilities is endless – just ensure you focus on what each client finds valuable. - Failing to understand your competition or even recognizing that you have competition – which may not be just other law firms but could be your client’s increasingly taking the work in-house or looking to the growing cadre of non-traditional legal service providers. Once you understand your competition, you can develop strategies to distinguish and elevate you and your firm in the eyes of your client.
- Not coordinating with other lawyers at your firm who also work with your client Create a team of those at your firm who can advise on the current and future needs of the client. The team should develop a plan to deepen the relationship with the client – and deliver on it. Fluidly share insights about a client. Be on top of what’s going on across the board with the client – not just for your matters. Develop compelling alternative fee arrangements, encompassing the full range of work done for your client by your firm that can further cement the relationship between your client and your firm.
- Not communicating enough. It’s almost impossible to communicate too much – both with your clients and internally. This helps ensure there are no surprises and keeps you front-and–center with you clients – both when you are working on a matter and, perhaps more importantly when you are not.
- Failing to articulate the value that your firm delivers. In-house counsel are under increased pressure to generate value for their companies and effectively demonstrate that value to their “higher ups.” Your firm has lots of valuable information about the client’s legal matters. You can show clients how you’re generating value and help in-house counsel communicate how the legal department is doing the same for the company. Make your in-house peers look like heroes.
- Cross-selling inappropriate capabilities – that is, those your client may not need, or are inferior to what the client’s other firms offer. Trust is fragile. Recommend what is right for your client. Demur on opportunities where you or your firm cannot deliver. Think of cross-serving versus cross-selling.
- Not understanding your business. This is particularly critical when it comes to negotiating services or fee agreements. Unless you understand your business, you won’t be able to negotiate and perform under agreements that work for your client and for you. You may end up agreeing to something that works marvels for the client, but is unprofitable for your firm. We often hear clients complain about law firms that agree to attractive fee arrangements and come back six months later asking them to renegotiate. Needless to say, this sends a bad message to the client.
- Assuming added value efforts are fluff– or that every client defines good service the same way. Increasingly, clients are not looking for fancy dinners or tickets to ball games (though some always will). Research indicates most are looking for tangible business contributions; ways to build their business, enhance the capabilities of their staff or more meaningfully contribute to their communities. They are looking to their law firms for leadership and partnering in these areas. Identify and deliver what is most compelling for each client. If you don’t, another law firm will.
There may be other mistakes that can torpedo a relationship or leave it foundering – and ones that may be unique to specific clients. That said, by keeping the following in mind you’ll rarely go wrong…
- Law is a client service industry. We know this – but sometimes forget: Treat your clients as you’d like key professionals in your life to treat you.
- Your clients have choices in where and how they procure legal services. Make you and your firm indispensable.
- Be “long-term greedy,” as Gus Levy, Senior Partner at Goldman Sachs once said. Building enduring, mutually beneficial relationships is a long game that may at certain points call for some near-term accommodations. Take the long view.
Also, always remember…
Many folks would prefer to never (ever) see a lawyer. It’s not personal; it’s just that this often means something (really) bad has happened or is a distinct possibility – and there’s likely to be a hefty bill attached.
Empathy goes a long way.
