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Cost is the top reason clients switch law firms

A third of general counsel switched law firms in the past year, survey finds

10 October 2012

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By Manju Manglani, Editor (@ManjuManglani)

High costs, low service quality and poor results are the main reasons clients switch law firms, a market survey has found.

The survey canvassed the views of 2,500 senior in-house lawyers from companies with revenues upwards of US$1bn (£625m) and based across 45 countries.

It found that 33 per cent of respondents dropped a law firm in the last year. While the reasons for switching firms were varied and based on individual circumstances, overall they fell into the following categories.

The top reason for switching law firms was cost, with 22 per cent of respondents noting their previous firm was too expensive.

Quality of service and responsiveness were also key concerns. Fourteen per cent said they switched firms due to poor service or slow responses from lawyers.

An equal number of corporate counsel also noted that quality of expertise or results were determining factors in leaving their previous law firm.

Another reason given for switching firms was that the general counsel’s key contact had left the firm (11 per cent), indicating that law firms are not doing enough to institutionalise clients.

Sixteen per cent of respondents said they stopped using their law firm the past 12 months due to no demand.

The reasons given by general counsel for switching law firms included the following.

  • "Too expensive, poor value and a skills mismatch."
  • "The primary attorney who had good industry knowledge retired. They didn’t do a good job of transitioning, so I felt our work was at risk."
  • "I lost confidence in their ability to do the type of work we needed."
  • "Because of their incompetence and over-billing."
  • "Bad network in Europe – they sold us on the fact they had an excellent network in the UK, Spain and France and it was complete hogwash."

    Lisa Hart Shepherd, CEO of Acritas, which conducted the Sharplegal research, said: "In so many cases, it’s clear that firms could have easily prevented the losses if they had had better 'early warning' systems in place – through a structured client feedback programme, for example.

    "The key to client retention lies in the strength of the relationship – aided by open, clear and ongoing client communication. Checking on a regular basis that clients feel they are getting good service and value is a proven way of not only keeping but growing their business. Clients want to be asked. In most cases, they are passionate about their business and value law firms which share and demonstrate that passion for their business too."

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