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Large law firms provide 'shoddy client service'

Failing to align services with client values and expectations  

23 September 2013

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By Manju Manglani, Editor (@ManjuManglani)

Large law firms are increasingly losing key clients because of basic failures in client service, a survey has suggested.

According to the research by Acritas, clients are increasingly firing law firms because their service, work, relationship or conduct does not align with clients’ values and expectations.

A lack of client focus was highlighted as key, along with failures in appropriately representing clients’ brands and understanding clients’ requirements and needs.

Commenting on the research findings, Acritas’ CEO, Lisa Hart Shepherd, said: “By conducting regular, formal client feedback interviews and maintaining good client communication from the start of the relationship, law firms can effectively put in place an early warning system to highlight problem areas before they become critical. This is a powerful way to build trust and loyalty as well as encouraging client referrals.”

The survey findings are based on telephone interviews with 968 senior in-house lawyers in $50m+ revenue organisations operating in all industry sectors across the world.

Poor value and service quality

A third of the world’s largest companies have dropped a law firm in the past year, the research found.

It noted that law firms are either failing to ask clients what their expectations are with regards to service levels, billing, response times and communication methods, or are failing to regularly check in with clients on these points during the course of a matter. This is creating misalignment and damaging the health of the client relationship.

Shortly before clients leave law firms, clients often experience a below-par drop in the quality of service or work provided, the research found, creating the perception of poor value for money.

Slow or poor service was highlighted by 17 per cent of respondents as a reason for firing law firms.

Stringent billing practices were also criticised. Clients noted that they were frequently billed for every second of attention they received, creating negative perceptions of the value that was being provided by their external advisers. The report adds that this feeling is exacerbated when clients experience varying levels of service quality from law firms around the world.

Just under a fifth of respondents said they had dropped their current law firms because they were more expensive than their competitors, without providing higher value or efficiency. More than a quarter said they had sought alternative external counsel to increase value under a reduced budget.

Smaller and ‘challenger’ firms favoured

The research found that smaller firms with more flexible billing practices and approaches to value often win out against global law firms.

“We just moved work to a smaller firm with similar expertise and lower rates,” said a US respondent in a chief legal role at a healthcare organisation.

This shift away from ‘elite’ providers is a trend that has been developing since 2010, according to the research. Under pressure to control external spending, it notes that clients are becoming more selective in their use of the top-priced firms, reserving their use for bet-the-company or highly specialised matters alone.

Instead, it says international ‘challenger brand’ firms (those with a wide geographic spread, high levels of customer service and competitive rates) are rapidly gaining favour and winning the most work.

Large law firm mergers were also cited as a reason for changing advisers, either because of conflicts of interests or because of a decision made by the board or broader C-suite.

“It's a political decision of my top management to give preference to X. So it's not linked to the quality of Y,” said a respondent in a chief legal role in the engineering sector in France.

The research findings are published in Winning and Losing Business: Clients’ Candid Views on Why They Hire and Fire Their Law Firms.

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