The cost of sales The cost and effort to ensure client satisfaction and thus the retention and development of clients is many times less than the cost of trying to win new business Do you know your clients’ potential which could be unlocked for your firm?
Protect your backyard This should be an obvious and profitable way to ensure -not only survival but also -one of the best ways to build long term competitive advantage But are law firms doing so?
Strategic forward planning What services are your clients going to need in the future?
What are clients looking for? Core issue is to add value More than the competitors In a way which is regarded as valuable by clients and which differentiates you – to create a ‘brand’
Value Clients Care About Our clients’ perspective Not our own perspective Is there a gap?
The value gap It is the client’s perception of value that matters Professionals often put too much emphasis on service attributes Not enough on helping clients achieve results
You will add value if… You provide clients with what they want – and more At prices they perceive to be value for money; and You do this better than the competition
Understanding the client’s needs and requirements So what do clients want?
Price on its own is rarely a determining factor However, value for money is key
The client’s perspective “They always try to sell to us on price – but what we really want is to have a good job done at a reasonable price” Client feedback from a perception survey commissioned by a law firm
PETER SCOTT CONSULTING Positioning your practice to be competitive by adding value more than your competitors (Brown and Faulkner 1994, Long Range Planning) Client Perceived Added Value Client Perceived Cost High Low Ave X Suicide Zone
So what do clients want? Here are some of our most important research findings from interviewing clients of law firms and in particular from those clients which were in the at risk category
Perceived lack of skills and technical expertise Clients absolutely expect that law firms have the necessary technical expertise to get the results clients require This should be a given – but unfortunately it is often not the case
What some clients said “They are OK for most work but when it comes to something really important to us, we go [elsewhere]” “If [named partner] is not there we go elsewhere because they lack depth of expertise.” “They need to improve the quality of staff in the 2 nd tier”.
However, it is not enough just to be a good lawyer The following factors can all influence a client’s choice of law firm
Brand and Positioning Law firms win and lose work based on how clients and key decision makers perceive them, and particularly in relation to transactions, factors around -complexity -risk; or -size
Some relevant client comments “For high value / high risk work I would use a big name firm – very unlikely to get bad advice” “Our accountants tell us to use a ‘corporate’ firm” “The firm is under pressure if it does not do some bigger corporate work” “Sometimes we don’t use them for complex work” “(They) may not be able to do complex transactions”
Lack of client awareness of specialisms offered Sometimes the problem is not so much actual lack of technical expertise but more a failure on the part of the law firm to make clients aware of what the firm can do
The following client quotes show this “They must not assume that people know what they do” “If I had a £5m project, would I think of (Firm)…probably not…I would think of one or two others first… it may be that I don’t know enough re: the full extent of their expertise”. “Not sure if they have certain capabilities” “They are not proactive with their own clients” “I don’t think they have anyone in litigation...but if (the client partner) told me they did, I would trust him...I’d be interested in talking to them” “Maybe not so good at telling people what they do”
Speed and other service factors including -Meeting deadlines -Keeping commitments -Ability to offer advice quickly and efficiently -Keeping clients informed of progress -Care and attention to work -Billing as expected -Personable and likeable people / rapport with the team -Interest in / knowledge of client’s business
These client comments help to illustrate this “Their response times leave much to be desired” “We had to chase all the time … we said it was urgent but it still ended up drifting” “They didn’t communicate enough, or didn’t seem to be on top of things” “I don’t believe they have the resources”
Relationship and understanding of needs If a law firm is unaware of a client’s strategic needs then it is at risk An example of this was a firm which was unaware that it was likely to lose a large client relationship in an imminent review of panel firms
“For service, I would rate them 8.5 out of 10 (they are upper quartile on this)...for strategic value I would rate them 2/10” Being aware of this client feedback, and effectively responding to it, enabled the firm to retain what was its largest single client
Referrers of work Different factors are likely to be identified from listening to referrers of work such as accountants, banks, overseas lawyers, IFAs, surveyors and estate agents
Research indicates that referrers consider these factors important Knowing the individual / the personal relationship / having confidence in the individual Expertise / technical ability / good quality advice Track record in an area of work Turnaround time / speed / ability to meet deadlines A fit with client Location Reciprocation Working as a team
Your firm For any individual firm it is key to identify what is important to your clients and referrers of work and how you perform in key areas Understanding and then responding to the issues can create immediate financial benefit and clarify the future direction of your firm
To be unaware of or to ignore client and referrer perceptions is to put at risk a firm’s very existence