Client Procurement and Retention
Clients are vital to any law firm, and in today’s market the client has become ‘King’ (Massingham). Due to a number of factors, including marketing and readily accessible information, clients eyes are now wide open to the standards and services they can expect from their law firm of choice. Exacerbated by a saturated market if a law firm wants to work against current downward trends many will need to up their client game.
This article will explore some of the considerations that can be decisive for clients and how law firms can respond.
When choosing a law firm, clients focus on firm reputation, pricing and specialism; they buy into the firms’ culture, values and perceived quality. Law firms need to think carefully when hiring and retaining employees; whether they ‘fit’ the culture of the firm and are able to meet the needs of current and prospective clients. Not only this, but when teams are being looked after, believing in shared values, the quality and results of the work improve and these differences carry far being rewarded by the client. Andrew McMillan, independent consultant and ex John Lewis boss talks of the “halo effect” ‘that transfers from your individuals to the brand’ and advises firms to fire new employees within the first 6 weeks if they are a poor culture fit. Furthermore, loss of talent can be abated far better by a firm culture that includes respect, diversity, mental health awareness and fair remuneration.
Clients seek value for money, rewarding efficiency and transparency. The billable hour has long been criticised as an antiquated pricing model. Fee estimates are problematic when clients end up disappointed having held the original estimate close to heart. Especially as changes to scope, approach, deliverables and dependencies have not been proactively managed. The SRA 2017 regulation requiring firms to publish their fees and pricing on their websites is an example of the law community breaking away from the traditional model, giving more power to the client to compare and contrast. 52% of clients are now choosing firms that offer fixed fee pricing models (Legal Services Consumer Panel, Hyde), following the upward trend. As a result, many law firms are finding ways to move away from the billable hour.
What is most important, is that lawyers become accustomed with the often uncomfortable conversations around money that needs to be had with clients not only at the beginning of the engagement but rather led proactively by the firm all the way through the matter life-cycle following a structured approach.
Research shows that, disappointingly, firms are letting themselves down. Once clients have decided on a firm, over 40% (Lemzy) that try calling their firm of choice do not have their phone calls returned for a number of days. Unsurprisingly, clients are likely to move onto other firms. Client communication can be improved through the use of technology. One good example is to look at a popular private business standard that the NHS has adopte; to utilise text messaging service notes. Alexa Lemzy of TextMagic writes ‘Improving your intake processes, using emotional intelligence to handle clients, and embracing the use of text for updates and appointment reminders can all enhance your firm’s client care’.
Whilst new clients are important, law firms also need to spend more time investing in clients they already have. If law firms, from the off set, are able to truly understand their clients needs, they are able to, and should, offer more services that add value. Joe Reevy expresses it deftly; ‘bake a bigger cake’.
By maintaining a running dialogue with clients, past the original transaction, firms can foresee and predict how events outside a client's business may affect them. Brexit is a clear example. When GDPR came along, Reevy was astounded to find only 1 in 20 companies he had talked with had been called by their law firm, despite all facing its impact in 2018.
To clearly identify the challenges of the current issues is one thing, but to create and implement tailored strategies that work within a law firm’s unique culture and business context, is another. This is a problem solving exercise beyond the core competencies of any law firm and one that should not be underestimated in the impact, both positive or otherwise, that it will have on the firm's future performance.
For more information on how this can impact your firm please contact Kies Consulting.