4 ways to lose your clients

By Kevin Wheeler

I am currently working for a number of large law firms carrying out independent client service reviews. This involves me visiting their key clients to interview those decision-makers who instruct law firms or who are involved in deciding which firms their organisation uses.

The purpose of the visits is to collect feedback on the law firms’ performance, to understand how the organisations select the law firms that they work with, who they use and for what services, and to identify future requirements and how these might differ from the services currently being used.

These are the 4 main issues clients are raising.

Service Failing

Service failings

It is well understood that a catastrophic service failure by a law firm is likely to lead to that firm being sacked by a client and perhaps even being sued for negligent advice. What is less well understood by law firms is the consequence of a series of smaller service failings which collectively often lead to client dissatisfaction, mistrust and the placing of instructions with other firms. Such small service failings include missed deadlines, slow response times, surprise bills, poorly supervised associates/trainees, etc.

It never ceases to amaze me how many times I come across law firm partners who are oblivious to such service failings and who believe that instructions from the client have dried up because the client is no longer as active. It comes as a real surprise to them when I report back after a service review that their competitors are all over their prized client.

bills

Quality trumps fees

In the current economic climate, competition among law firms is fierce and price has become a big issue for lawyers. There is much coverage and debate in the legal press about the pressure clients are putting on firms to reduce their fees and the detrimental impact that this is having on law firm profitability.

There is no doubt that in many areas, legal services have become a “commodity” where price is a key factor in deciding which firms to use. However, in most instances, and certainly when it comes to “bet the company” issues, I find that clients are more concerned about the quality of the advice that they are getting than the price that they are paying. Obviously, your price has to be “in the ballpark” and clients certainly don’t like surprise bills, but generally I find that quality trumps fees.

As far as alternative billing arrangements are concerned, clients like fixed fees because it gives them certainty, but charging by the hour is still the most frequently used method for lawyer billing. The most important message from clients is that lawyers should communicate more about their fees: “Tell me what it is probably going to cost up front; tell me what your revised fee is likely to be at key agreed milestones along the way and certainly tell me as early as possible if the scope of your work changes at any point; and, at the end set out clearly what you have done and the charges for doing it.”

relaxed

Neglecting know-how

Clients generally prefer lawyers who are proactive and come to them with ideas or who raise issues – both legal and industry-related – that they feel the client should be aware of. In-house lawyers like to be kept up to date with legal developments, if only for their on-going CPD.

Lawyers, on the other hand, tend to wait for clients to issue instructions. The more lawyers can do to provide tailored know-how for their clients, the greater the client loyalty and the more opportunities that are likely to arise for the law firm. If you are not providing your clients with know-how, you can bet that your competitors will be.

boxing

Overt cross-selling is frowned upon

Most clients don’t welcome being cross-sold to by firms. They usually have a number of firms that they instruct, and until they become dissatisfied with one of these or until they have a specialist requirement that none of their incumbents can service, they are happy with the status quo.

By all means make sure that your clients are aware of the relevant services that you provide and the offices around the world that you provide these from, but introductions to your fellow partners are best made when a real opportunity has been identified and when you know the client will be receptive.

Regularly talking to the client about their business strategy and future plans is a great way to identify such opportunities. Identifying failings of other incumbent law firms as part of a regular client service review process is another way.

So, get out there and start collecting feedback from your key clients. It will enable you to improve your service delivery as well as help you to identify ways to build the client relationship and win more work.

Filed Under: Practice of Law

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