Competition is fierce and the stakes are high. So what are you doing to maintain and grow your best client relationships? If you’re like me, you wake up every morning thinking about ways to ensure your clients’ continued trust. You might also be fearful that other lawyers around town and across the country could be hungrier than you. The fact is, key client teams are no longer a fad but a critical component of many law firms’ strategies. Yet many lawyers struggle with how best to build and maintain key client relationships with buyers who are more sophisticated than ever.
How does one define a “key” client? The short answer: revenue. The longer answer is that many firms use various benchmarks to define a key client (aka a “client team candidate”), including
- Revenue in relation to a firm’s top 25 to 200 clients
- Profitability in relation to a firm’s top 25 to 200 clients
- Practice group and office penetration
- Opportunities for expansion
- The need for coordination based on the number of contacts within a firm and the client
Many of these metrics depend on your firm’s size and overall profitability. For example, a $250,000 client to some firms would clearly qualify as a key client but wouldn’t to others. Put another way, how vital is this client to your practice and your firm as a whole? In addition, with added focus and resources, how might you improve that relationship and realize on areas for growth?
SURVEY SAYS: TRANSIENT MARKETPLACE
While firm metrics are important to determine the necessity for effort around a given key client, it’s important to keep in mind the continued skepticism that exists in legal departments across the country. Here are a few highlights from well-respected in-house surveys:
- A recent BTI Consulting Group survey on Client Service Performance for Law Firms showed that nearly two-thirds of corporate counsel aren’t recommending their primary firms.
- A Brand Research study on Use of Outside Counsel showed that more than half of the respondents engage a new law firm at least once a year.
- Another BTI survey, Strategic Review and Outlook for the U.S. Legal Services Industry, showed that nearly 20 percent of law firms are gaining market share at a competitor’s expense.
- Altman Weil’s Chief Legal Officer Survey found that, for the third year in a row, chief legal officers don’t think law firms are at all serious about changing their service delivery model, rating them a median 3 on a 0 to 10 scale.
These numbers provide an intimidating reality—but also fertile ground to increase your client focus.
UNDERSTANDING CLIENT EXPECTATIONS
We are all familiar with that adage that you should never “assume” because it can make an “ass” of “you” and “me.” Gaining a deep understanding of client service expectations and communication preferences, and delivering on them consistently, can be the most effective way to grow into a new area of service or increase the share of existing lines of service. In my experience, the best way to learn this information is simply to ask.
Many firms are embracing the notion of client feedback to ensure they are meeting and exceeding client expectations. This occurs in a variety of different ways, including in-person visits, telephone interviews or online surveys administered by members of firm leadership or third-party consultants. With all of the buzz about client interviews, I find it striking that a significant majority of the clients we have interviewed indicate they’ve never been formally asked for feedback.
It’s important to note that it isn’t enough to just ask for feedback. You need to act on it! Some in-house counsel expressed their displeasure when asked but found that, despite providing feedback on improvements, six months later the service hadn’t gotten better at all.
The Altman Weil Chief Legal Officer Survey backs this up from the client perspective as it indicates that “most law departments are missing an opportunity to use direct feedback to encourage change in their law firms. Only 35 percent of law departments regularly and formally evaluate outside counsel, according to the survey, and a meager 17 percent communicate the results of those evaluations to their law firms.”
This conundrum helps explain why so many legal departments are looking for new dates to take to the prom. That said, it’s not too late. You can ask several questions to help understand client preferences:
- How do you define responsiveness?
- How would you like to receive our work product?
- Who should be copied on communications?
- How frequently and formally would you like status updates for your matters?
- How would you like us to budget for and invoice your matters? Note that some firms are taking this a step further by providing real-time “budget to actual” reporting via extranets.
The response to any and all of these questions may be “It depends.” This is why it is critically important that we understand each client’s preferences on these issues. Our ability to manage a client relationship successfully is built on our ability to deliver on the client’s expectations, communicate those expectations internally and ensure quality control across the enterprise.
CLIENT SERVICE STANDARDS
The challenge of successfully using client feedback is further clarified when considering that numerous people within a given client’s company may answer these same questions differently. Large clients can have more than 100 legal decision makers, with more than 150 lawyers and paralegals supporting them. While this may seem daunting, you should establish a set of client service standards in collaboration with your client. These standards can include, but are not limited to, the following areas:
- No surprises policy
- Preferred communications protocol
- Budgeting and billing practices
- Knowledge of the client’s business and industry
Upon agreement with your client, these standards—preferably limited to one page or less—can be distributed to all timekeepers and reinforced in various team communications. The person leading a given relationship must reinforce the importance of adhering to these standards, and must lead by example. A word of caution: establishing these types of standards is a waste of your client’s time if you don’t plan to do anything with them.
SELECTING THE RIGHT TEAM
Once you understand the service expectations and you have positioned yourself to introduce new team members or practices, how do you ensure you’re selecting the right team members? Here’s something not to do: simply name a practice group leader or office head and then wait for new matters to fall from the sky. You need to be purposeful in your introductions, and they should be based on client need and “fit.” Some lawyers won’t fit well with your clients, while others will seem like a match made in heaven. Do your best to make sure that you aren’t simply introducing a great lawyer but also someone with capabilities that align with the current needs of the client.
Focus your efforts on what the client is presently interested in buying from you. If they aren’t buying litigation today, don’t try to sell it. Performing a needs analysis with your client can ensure that you’re introducing the resources they do need. Be respectful of existing relationships and determine where the client would be open to an introduction. Just because your client has real estate holdings doesn’t mean the client wants to hire your real estate lawyers. While this may seem like a no-brainer, far too many times I have seen or heard of instances where a practice group assumes it should be doing its specialty work for a company instead of some other competitor who is currently working for the client. An introduction would be much more successful if your team members are attuned to issues surrounding the client in a given area and can subsequently provide a relevant example as a lead-in to an introduction.
TOOLS, TOOLS AND MORE TOOLS
For the last decade, firms have been working on various value-added services to help support and build client relationships. But be sure to select the right tool for the right client. If you’re a hammer, every problem looks like a nail. Listed below are some of the value-added resources available to clients.
Client alerts. Many firms use client alerts as a tool to keep clients informed of new legislation or interpretations of the law. While mostly practice driven, consider a client-specific alert geared toward its industry and its needs.
Topical seminars. Hosting a client-specific program can be a meaningful way to get valuable face time with a client. If the client has in-house counsel, try to offer CLE credit. Be mindful, however, that CLE accreditation rules vary from state to state.
Client social events. Whether large or small, take the time to invest in building relationships with your clients by hosting client-specific social events. These can range from traditional sporting events to fishing trips to cookouts that include family members.
Extranets. While no longer innovative technology, clients are embracing extranets more and more. My firm currently has more than 1,200 active client extranets. The sophistication of these extranets can vary from simply posting documents to virtual deal rooms with real-time drafting collaboration.
Legal project management. While not done exclusively for key clients, many firms are taking legal project management processes and technologies to their current clients as a means to help drive the value conversation.
Alternative fees. With a track record of matters and fees to reflect on, providing various forms of alternative fees is a great way to further your client relationship. I would advocate that you proactively introduce the conversation rather than being put on your heels when the client threatens to leave because one of your competitors provided them with the predictability they have been looking to receive.
Partnering. While this is a broad term, I recommend partnering with clients on areas that are of interest to them, which can include diversity, pro bono or community service. All are important to firms and clients alike, so consider co-staffing a legal aid clinic or sponsoring a program tied to their core values.
Clearly, each of these topics warrants further description, and a great deal of content and programming is available on each of them. There are also a bevy of resources available to support the internal management of a key client, including competitive intelligence, financial reporting, client surveys, intranets, relationship mapping, client relationship management databases and your professional administrative teams.
ONE SIZE FITS ONE
Frequently the hardest part in managing a key client relationship is implementation. So take it one step at a time. Understand your client by asking for feedback. Then pick the right team—not the team you’re “supposed” to have, but the one that actually makes sense for the particular client. Gather the right tools, and then begin constructing a unique model of service delivery that will exceed that client’s expectations. After all, you now know what they are!