Relationship secrets: How to institutionalise new clients in 100 days

First impressions count in law firms, as they do in politics. Successful governments have focused on establishing a new mandate early, with calls to action in their first 100 days.

Similar pressures apply in law firm client management. Both sides need to focus on what should be done in the first 100 days of a new client relationship to ensure it works for each side.

From the firm’s perspective, it needs to focus on how to institutionalise the client (including cross-selling the firm’s services) and embed it as a long-term client. What is the best way of effecting this?

The law firm perspective

The first and perhaps most fundamental requirement, says Baker & McKenzie’s EMEA senior client development manager Eva Dvorakova, is effective communication.

“This is the most important aspect of the client engagement process, in asking the client the right questions,” she says.

“Only through listening and understanding the client’s needs… can we best establish how to work across all relevant practice areas to deliver the best possible legal services.”

One senior business development manager at a commercial law firm, speaking anonymously, went further, saying that his most pressing client engagement priority was to act in a way that convinced the client of the firm’s sincerity.

“You have to show that you genuinely care about the success of their business, as well as the individual matter.”

To him, “this requires a lot more listening than talking and the ability ?to empathise.”

Jean-Michel Beeching, global head ?of business development at Taylor Wessing, agrees, stressing that “it is important to build up trust in the relationship as early as possible”.

To him, that means clarifying priorities and expectations. “Clients and partners both need to be operating to the same set of principles and be honest about the firm’s areas of strength and weakness”.

He adds: “Nothing destroys trust ?faster than feeling that the other party isn’t being totally honest or isn’t keeping to what was agreed”.

Alongside communication, Beeching says partners should also assume responsibility for educating themselves early on about the client, to avoid asking avoidable questions.

“Clients don’t like to waste time educating their advisers on basic aspects of who they are, what they do and how they like to work,” he says.

It’s a sentiment that rings true for Dvorakova who notes, wryly, that it may sound like common sense, but is something that all firms can improve at.

“We strongly encourage [our lawyers] to limit talking and try to find out as much information as possible from the client, ?at all stages, not limiting the conversation to the particular transaction in question,” she says (see box: Case study).

 

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Case study: Creating a packaged solution

Eva Dvorakova, EMEA senior client development manager at Baker & McKenzie, provides an example of how communication in a new client relationship can lead to wider benefits.

“Our employment partner went out to visit a factory where employees were being made redundant, through which it became apparent that they were looking at renting office space,” she says.

Through questioning the preferred location of that lease, she learned that the client could obtain tax benefits if it relocated to a new office building which meets the highest environmental standards.

At the subsequent meeting, the employment partner brought along a real estate partner and a senior tax associate to take this opportunity forward.

This approach won the firm additional business from what had initially ?looked like purely employment work, while delighting the client with an efficient ‘packaged solution’.

“If we had gone into that first meeting focusing on employment law and spent the whole time just talking about ourselves,” she says, the opportunity would have been undiscovered, “which came out quite naturally from small talk with the client”.

“It all comes down to being interested in the client, their needs, goals, challenges, and so on, rather than focusing on being interesting.”

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What clients say

Julia Banks of market research firm Acritas notes that her recent survey of general counsel has demonstrated that “embedding a culture of clear, open and ongoing dialogue between the law firm ?and client is critical” (see ‘Why clients switch law firms’, p.4).

This, she says, is the single most effective way of avoiding relationship failure. General counsel have frequently cited relationship and communication issues as primary ‘push’ factors for dropping law firms.

Beeching agrees, saying “if there ?are areas of client dissatisfaction, they usually involve non-legal things such as ?too little communication”.

Banks also notes that firms should question clients about the challenges ?they face, pointing out that several respondents cited poor client focus ?as the main reason relationships with ?their chosen law firm failed.

That can, again, boil down to common sense: “Sometimes a simple phone call ?on a regular basis is enough to keep ?a relationship healthy”, she notes.

This is a sentiment that rings true with George Bull, head of professional practices at accountancy firm Baker ?Tilly. “The law firm should start as it ?means to go on; so should the client,” ?he says.

He adds that “the first 100 days set the seal on the later tenor of the relationship. It is important that both parties are aware of their needs.”

Anthony Armitage of First Law, who recently acted as an interim general counsel for Southern Housing and serves as an adviser to in-house lawyers, agrees that this period is “a golden opportunity to impress your client and to differentiate yourself from competitors”.

He urges firms to “be active in making contact with the people at the client your firm will be dealing with. Don’t be shy in asking who these people are if you don’t already know.”

That way, he says, you will “get to know your client’s business as best you can, so that you can identify more easily what is important to your client and ?what is not, to understand the ?pressures and concerns that drive expenses and profitability”.

Maintaining relationships

Bull stresses, however, that the focus on the client relationship should persist beyond the initial period, noting that firms must take care to meet or beat their new clients’ expectations.

“This is not limited to the first 100 days; it simply sets the seal on the level of service which the client can expect on a consistent basis… getting the right thing right, first time, every time.”

Jane Jarman, reader in professional legal education at Nottingham Law School, agrees. “The first 100 days in the client relationship are not really the problem, as this is very much the honeymoon period”.

Rather, she says, problems may set in later, when the work can often seem processed. She suggests that firms should set internal benchmarks and assess whether they are providing proper standards of service. As part of that analysis, common themes may emerge which should be addressed to improve client service and assist client retention.

“Done well, this could result in a ‘client care dividend’ from the investment in legal compliance,” Jarman adds.

To do this, suggests Armitage, law firms should ensure fee-earning staff are aware of the terms and conditions of any client agreement, and put measures in place internally to ensure they are complied with in full.

Banks notes that “it is critical that both parties review these thoroughly early on and set clear, mutually agreed goals – many a relationship has got off on the wrong foot because simple assumptions were made at the outset”.

Horses for courses

Communication is also important in working internally with business development staff, who are well placed ?to manage client relationships.

“It is important for the relationship ?with a client to be a team effort, led ?by the client relationship partner and coordinated by someone who is a professional in understanding client service,” says Beeching.

He stresses the importance of looking forward in a clear client relationship strategy. That, he says, “can capture services we could usefully offer the client and who we need to get to know and introduce to colleagues”.

Such plans can be reviewed at regular intervals, but “inevitably this doesn’t always happen,” Beeching says, given “opportunities or unplanned setbacks that cause us to change tactics”.

Nonetheless, that structure enables “developments to get communicated so that everyone is roughly pointing in the same direction”.

And, if there are setbacks, then looking back is equally as important. Dvorakova notes that therein lies the importance of client feedback captured on an ongoing basis, helping to build client retention and loyalty and embed a client service culture.

Client review meetings “are an excellent source of information and, although initially, they may be wrongly viewed by some as a bureaucratic exercise, it usually only takes one client review meeting for both parties involved to realise the tremendous value it can add to the relationship,” says Dvorakova.

Banks is also evangelistic about their benefits, saying “they give a boost to both parties when feedback is all good and they provide early warnings of problems before they become crises”.

Her research shows that many firms are still missing out on those benefits. Only 20 per cent of respondents said they had taken part in a feedback survey, yet 86 per cent of those said they had found it valuable. Of those who had not had the opportunity to voice their opinions about their most used law firm, 78 per cent said they would have found it valuable.

 

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Managing expectations

• Embed a culture of clear, open and ongoing dialogue between the firm and client.

• Get your partners to put their feet in their clients’ shoes.

• Act on client feedback and tailor services accordingly.

• Review client requirements and fee-earner promises early on to set clear and mutually-agreed goals.

• Benchmark the firm’s performance throughout the relationship.

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How loyal is loyal?

Unfortunately, there are limits to client loyalty, however excellent law firms are in managing the relationship initially and thereafter, whether they have feedback or not. That poses problems for cross-selling.

In some ways, “law firms are close cousins with advertising agencies: both are judged by clients who are unlikely to be loyal,” says Jarman.

“Many people point to cross-selling as the best way to embed a client within the law firm structure”, she notes, but “while that is true to an extent, the client may not appreciate being managed in such a way”.

One source speaking anonymously to Managing Partner agreed, saying that active cross-selling is generally a turn-off for clients, but “if you can persuasively identify other client needs to which you have a relevant solution, then you can make progress”.

Bull takes a different tack. He says that, for as long as people continue to buy people first, law firms must give sufficient presence and profile to the lawyers who secured the engagement in the first place.

He agrees with Beeching and Dvorakova that a well-managed law firm is more than the sum total of its parts. Through cross-selling, “the firm must take care to broaden the relationship map,” ?Bull notes.

Beeching has sympathy with this view. “What is true of all clients is that they want their advisers to take responsibility for delivering solutions, not just individual components,” he says.

“The partner who simply introduces a colleague from another practice or office and leaves the client to work it out with this new contact is missing the point. Managing a client relationship means taking personal responsibility for the ?entire relationship.”

Bull also warns that focusing on the financial aspects of inducement mean that “slavish adherence to a paid referral mechanism is likely to prove more divisive than not”.

He stresses ?that law firms ?can encourage such values ?by creating ?a culture of shared client relationships ?and encouraging lawyers to be good ‘corporate citizens’, as reflected in their remuneration systems.

Jarman agrees, noting that the maxim of the famous advertising executive, Leo Burnett, ‘what helps people, helps business’ could provide a useful guide to good client engagement as well as reward structures in law firms.

“The ‘glamour’ of new client acquisition should be matched in terms of rewards for those who will complete the work on ?a day-to-day basis,” she says.

To her, success should be shared. “Does the prospective cross-sale really help the new client or are you just ?going through the motions to ensure ?that you have a ‘triple lock’ on work from ?a new client?

“The reality is that the client can just walk away,” she warns.

Holding out for a hero

To avoid the reality of clients walking away from your firm, Armitage says it is important to “treat your client consistently as if it were your most important client, regardless of the fee income you derive from it”.

“This might involve routinely considering whether the effect of your advice is worth the cost to the client,” ?he says.

“Put yourself in the shoes of the client’s general counsel (imagine if they don’t have one). There is more value in prevention than cure, so anticipate risks and make recommendations before problems arise.”

Banks says her research shows that responsiveness, competence and decreasing hourly rates are the main drivers of increased client satisfaction. Many general counsel said they parted company with their law firms because they were too expensive for the level of service and expertise they were getting or were unhappy with the firm’s level of service, responsiveness and quality of advice.

Gauging the relative importance to each client of these criteria helps with preparing a well-prioritised service that meets client needs – not just for the first hundred days, but for the duration of ?the relationship.

Ben Rigby is a freelance legal journalist.