If I haven’t been clear, I believe very few firms indeed have achieved Phase III, emulated my friend, or even grasped the reality that with stagnant/declining demand for legal services from traditional law firms, and excess capacity in our sector, we’re now in a battle for market share. In this environment, we have to treat our existing clients like gold because acquiring new clients means stealing them from some other firm where (one can only assume) they’ve been perfectly content heretofore.

Altogether too many of us lack any focus on what the implications of this are. I never want you just to take my word for it, so consider these findings from an ALM Survey released about two weeks ago:

  • We’re not serious about measuring client or partner profitability: Just 44% of those questioned said they were hitting their profit targets with individual clients and 46% with individual partners.  These are flunking grades.
  • We’re not serious about requiring new measures of productivity and client pricing arrangements. Respondents’ “top three” financial measurements included nothing but old school data: Firm revenue (52%), firm profit (44%), PPP (37%), utilization (30%), and operating margins (24%). Where is client satisfaction?
  • Actually, ALM also told us how much we care about client satisfaction: A bare majority of firms even deign to track it. Although we all may declare with self-satisfaction that client service is crucial to our competitive advantage, only 56% reported that their firm has a plan in place to measure, track, and build client satisfaction and loyalty.
  • And get this, which I found the most shocking finding of all: Four out of five respondents (78%) could not  honestly say that their firm leaders were “extremely knowledgeable” about their top 20 clients’ businesses.

I find the last point tantamount to client management misfeasance.  Yet consider whether the reality might be even worse than our law firm respondents reported; they might just have an optimistic bias. Here’s an example, from an Inside Counsel survey, of two quite distinct report cards on the “overall service level” of law firms:

 

Grade In-house counsel Law firm
A 19% 62%
B 70% 35%
C 10% 3%
D/F 0.5%

Or this: “Outside counsel always or usually  understand the business issues.” Agree:

  • Clients: 22%
  • Law firm partners: 92%

While we’re at it, here’s a roster of “value added” offerings from law firms to clients, and how clients rank the importance of the offerings vs. how law firms perform on them. In a nutshell, we do poorly on the important and we do just fine on the unimportant.

Offerings where clients grade importance more highly than law firms’ performance (all listed in order of importance):

  • Secondments
  • Seminars at the client’s office
  • Regular service review meetings
  • Seminars at the law firm’s office

And offerings where clients grade the law firms’ performance more highly than importance:

  • One on one lunches
  • Newsletters
  • Pitching proactively for new work
  • Websites
  • Corporate hospitality
  • Seeing a firm’s name in the press

See a pattern emerging?

Related Articles

Email Delivery

Get Our Latest Articles Delivered to your inbox +
X

Sign-up for email

Be the first to learn of Adam Smith, Esq. invitation-only events, surveys, and reports.





Get Our Latest Articles Delivered to Your Inbox

Like having coffee with Adam Smith, Esq. in the morning (coffee not included).

Oops, we need this information
Oops, we need this information
Oops, we need this information

Thanks and a hearty virtual handshake from the team at Adam Smith, Esq.; we’re glad you opted to hear from us.

What you can expect from us:

  • an email whenever we publish a new article;
  • respect and affection for our loyal readers. This means we’ll exercise the strictest discretion with your contact info; we will never release it outside our firm under any circumstances, not for love and not for money. And we ourselves will email you about a new article and only about a new article.

Welcome onboard! If you like what you read, tell your friends, and if you don’t, tell us.

PS: You know where to find us so we invite you to make this a two-way conversation; if you have an idea or suggestion for something you’d like us to discuss, drop it in our inbox. No promises that we’ll write about it, but we will faithfully promise to read your thoughts carefully.