Full-service client relationships are a major goal across big law firms today. But what does “full-service” mean?
After moderating a panel discussion on law firm/client relationships at the 15th Annual COO-CFO Forum in New York, LibSource EVP John Harbison explains it this way:
“A full-service relationship is more about partnership, and as we all know, partnerships are built on collaboration and trust. Clients are demanding greater collaboration in matter management, pricing negotiations and other areas, and firms have no choice but to comply. Losing a client in a time of low growth, low demand and high competition is simply too risky.”
John’s session was about the challenges of mastering a full-service client partnership and the new rules of collaboration for winning and retaining legal customers. The panel was comprised of executives from the law firms of Davis Wright Tremaine, Quarles & Brady, Schulte Roth & Zabel and Bilzin Sumberg Baena Price & Axelrod.
Prior to the event, we surveyed a small group of law firm executives, asking them to respond to three questions. Their answers served as prompts for the panel discussion.
Understanding law firm client loyalty
Since client relationship management is about retaining client loyalty, we wanted to understand how firms define a “loyal” client. We were surprised to find that most set the bar at over five years.
Client expectations for time- and cost-saving tools
The market’s demands for greater value and lower costs has been one of the greatest permanent shifts in the landscape for legal services. Fully half of the survey respondents said most clients expect their outside counsel to streamline and optimize to provide greater value at a lower cost. Ten percent said the expectation cuts across all their clients.
The most important benefit law firms can deliver to clients
Our final question was about ranking the value of several benefits that firms can offer, from efficiency to transparency. None of the options stood out on being either very important or not important, but responsiveness edged out the rest to take the top position. Transparency received the lowest number of votes.
Assurances of data privacy and security polled in the middle, but it was a topic of concern expressed in the panel. More clients are asking for security audits, with one panel member saying it’s becoming a weekly request. More firms are hiring data security specialists and creating new roles and responsibilities. We see privacy and security assurances as an opportunity for differentiation while fulfilling the firm’s obligations for client confidentiality at the same time.
Shifting from the practice of law to the business of law
It’s clear that changes over the last decade are becoming permanent. Law firms have long been considered slow to change, and that culture remains. Cost-effectiveness continues to be a driver, and John says that the whole nature of this year’s Forum was about the challenges this presents.
“There have been pockets of relief and resistance, but the pricing pressures that started back in 2008 are becoming even greater now. The billable hour continues to get pummeled and clients are looking to shift more risk to the firm.”
The Forum confirmed that law firms should remain on the lookout for technology and services that allow them to respond more quickly to changing needs and requests. Clients are demanding change and progressive firms are responding with greater urgency and innovation.
More on the business of law
For another view of the COO & CFO Forum, focused on law firm innovation from a spend management perspective, I invite you to read this post from Patrick Gleason, my fellow LAC Group colleague and VP at sister company CCM: Law firm practice innovation.