Law firms want to be their clients’ trusted advisors. But will clients spending millions in annual legal fees ever really trust a law firm whose name is plastered over the trade press for its latest hefty profit per equity partner (PEP) figures? Hoisted by their own petard, says Gordon Brown, director at Client Savvy, and he doesn’t think innovation, cross-selling and thought leadership will have the impact that is expected from them.
But can law firms get better at their client relationships – and if so, how? We ask Brown for his views on how law firms should really be engaging with clients to build resilience and business growth.
Brown thinks that law firms have improved the way they work with clients in recent years. But he adds that clients still raise the same issues talked about ten years ago (just in different terms), which means that many of the basics are not yet fixed:
- Showing how the law firm is value for money. This isn’t about cost, which quickly just becomes a conversation about how cheap you can be, says Brown, but about commerciality, and delivering tangible value that is recognised and can be measured – ie, what have you enabled a client’s business to achieve? ‘As long as the conversation remains about absolute cost there will be a continued flight to the bottom on prices,’ he says.
- The need for better understanding of the client’s business. ‘Firms might be on this for one or a few days (notably around tender/re-panel times and pitching for big projects) – but clients still say that no one sustains it,’ says Brown.
- Delivering a workable two-way relationship. Interestingly, Brown adds, while clients still value and ‘demand’ institutional relationships, at the sharp end they are reverting to individuals. The reasons, he suggests, are that even though firms may have successfully differentiated themselves by their sector or industry expertise, clients can’t distinguish firms beyond these like-for-like clusters. They therefore turn to the lawyers that stand out.
Over the years, firms have invested in various means to better understand these issues and improve their offerings. But if clients are still giving the feedback above, such efforts may not be enough. ‘Firms needs to improve their understanding and do something different and intelligent with it,’ says Brown. ‘The problem is that firms are looking at the wrong things.’
‘There is a misguided fight for differentiation and a short-term smash and grab for cash – which creates fads that everyone surfs along (which ironically plays against the elusive differentiation they all seek),’ he says. ‘The need to get a return on every investment stunts creativity, agility, speed to react, taking risks and, when things change, changing plans,’ he says. ‘Failure is built into all good business strategies, but not for law firms.’
He thinks many law firms waste time on too many initiatives that don’t help. He has a litmus test: if a client hasn’t specifically asked for ‘it’, how can you be confident they want or will pay for ‘it’? Take innovation as an example. ‘It’s taken on a life of its own and the end game (low-value, repeat tasks done more efficiently at less cost and time – with no loss of quality) is lost. ‘Everyone is focussing on the drill – clients don’t care, they only want the hole,’ he says. Similarly, with cross-selling he suggests that clients see through it – as a means for law firms to sell more. ‘Clients don’t see it as putting their issues/priorities first. It has no place in an intelligent client plan,’ he argues. ‘Working where you are expert and creating a demand for complimentary products/services is much smarter.’
As for thought leadership, he says he’s never heard a client say thought leadership has either differentiated a firm or influenced their buying decision. ‘For whose benefit is thought leadership?’ he asks.
Getting it right: The role for BD & marketing
For Brown, the key lies in understanding and articulating value: both in terms of how functions within the firm add value internally, but also to the firm’s clients in terms of what they are getting and how that is delivered.
For both firms and their BD & marketing teams, there is also opportunity here – to transform themselves by focusing on core strengths and aligning those to a deep understanding of the unique issues each client faces. ‘If you are going to “enable” a client’s business you need to know where they are going and why – and that needs more than a macro read of annual reports and accounts,’ he says. ‘Law firm leaders need to review their business model, but so too do heads of BD and marketing. They need to question the value of their own functions: what tangible benefits do they bring to both their firm and clients?’ He thinks that for too long the focus has been on command, control and process, adding that while it is important to stop a catalogue of bad behaviours and investments, taken too far it can kill the commercial spirit of any firm.
‘If you are a marketing director, ask how are you bringing money into the firm? Are you spending enough time on external affairs to deliver tangible value? Can you support partners in a way that joins the dots between lawyers and clients, giving them new avenues for engagement? If not, what is your role?’ he asks. BD and marketing teams that are forever focused on campaigns getting global, or basing action plans on quantitative research, are missing the point, says Brown: successful engagement is about being highly tailored and personalised – and asking does this really address this client’s issues?
‘Trust between client and firm is at the core of this,’ he adds. ‘The market is changing – no-one has a real sense of what the end game is. Firms that want to walk this uncertain path together with clients need to invest the time, not be risk adverse and not be afraid to put ideas forwards.’
Brown also thinks that BD should take a more front-line role in seeking out insights directly from clients. At the same time, however, he strikes a cautionary note. ‘Don’t foist BD managers on clients because it suits internal purposes. Think through what impact you will have with the client, what value they get by having you at the table and the new things that you are going to raise by being there. How are you going to keep the GC of a bank on the hook for an hour? Start with the homework – be intellectually more robust,’ he says.
‘It’s about improving focus, priorities and making decisions – it’s as much about what you don’t do,’ he adds, ‘You have to understand how, what and why clients buy. Every client sees their business as unique – so make a point of getting to know it, and then articulating how your firm can deliver against those needs.’
But are firms really interested in making these things happen? ‘There’s a fundamental need for leadership to grasp these issues but it’s hard to tell people who are successful that they need to change.’ He cites, however, the example of EasyJet. Not long ago, budget airlines were just a blip on the horizon. Now they have turned the airline industry on its head. Similarly in law, competition from in-house legal teams, accountancy firms, technology newcomers and other alternative service providers will increasingly chip away at law firms’ ability to make money.
His last piece of advice is pragmatic. ‘Be realistic with clients (be honest about what you can and cannot do – all things to all men is not a compelling proposition), be real (don’t push your own agenda), share your ambitions, show you’re hungry and, when developing relationships and trust, leave the lawyer in you at the door.’
For lawyers and BD & marketing teams, the journey it seems has a few more miles to go…
Gordon Brown is a management consultant who helps firms develop their strategies, plans, programmes and conversations for their ‘bet the ranch' clients. Gordon has more than 20 years’ experience in the professional service sector and was previously BD and marketing director for PwC, both in the UK and the Middle East. He can be contacted at firstname.lastname@example.org