Valentines Day has been and gone, and are you feeling the love from your lawyer? Lawyers, are you feeling the love from your clients? Re-reading Susskind’s excellent book “the end of lawyers?” (which all lawyers really should read, and not just say they’ve “skimmed” or “read bits of it”), I was struck by what he calls the asymmetry between clients and lawyers. He explains that fundamentally clients want to reduce the amount they use lawyers (to reduce expenses) whereas lawyers are keen to sell more services to their clients (and therefore bill more). Building on that thought, I began to think of things that can make that gap wider, or indeed reduce it. And that’s where the love comes in…..
Love your lawyer, love your clients
Most commercial law firms these days have some type of key account management. In many cases the root of this is: these are the clients that pay us the most fees, so (a) we’d better look after them so they don’t go elsewhere; and (b) if we are nice to them we might be able to cross-sell them more services; and (c) we still don’t really like “selling” to get new clients, so we’ll concentrate on farming our existing clients. Selection of key clients is often on some variation of the pareto principle (ie 80% of revenues come from 20% of clients) and may be further limited, for example the top 100, 50 or 25 clients, possibly with further segmentation within that group (e.g. Platinum, Gold, Silver). The lucky clients probably get a dedicated account partner, regular (ranging from quarterly to annual) account meetings, “value adds” such as training and newsletters, and possibly some corporate hospitality.
This to mind, highlight’s Susskind’s point. The disparity is really highlighted if there is a cultural clash between client and law firm. One striking example I remember from my time in private practice is where one of my firms won a new “flagship” client. A FTSE listed, household name, it was catapulted into the key client category. The problem was that there was a fundamental disconnect between what the client wanted, and the relationship the firm wanted to build. As a consequence, the law firm tried hard, but didn’t meet the client needs. Meetings were strained, bills were often paid late, and the junior lawyers in particular began to hate working on the account. The apathy became tangible, leading into a vicious circle where the firm’s performance strayed further from the client’s expectations, even though on the face of it the firm was doing what was asked (delivering technically correct advice, on time and at agreed rates). The point is that this was a key client in name only. It was not a relationship either party really wanted to invest in.
By contrast I remember working for clients, big and small, that I genuinely used to enjoy helping. I was driven to find out about their business, read widely, and send them articles I’d read that might be of interest. I did this not because they were key clients and that was the service they were “entitled” to, but because there was a great fit between my interests (personal and professional) and their interests. I found that over time, these relationships generated value to the firm and I in many different ways. Yes it could be revenue, but it could also be introductions and referrals, it could be joint PR opportunities, it could be recruitment tips. The flow of these benefits was reciprocal, and I genuinely think that these moved away from being asynchronous relationships. Perhaps as testament to that, I still keep in touch with many of those clients, even though it has probably been seven years since I acted for them.
Similarly, as an inhouse lawyer, I was never impressed by clumsy attempts at corporate hospitality where I was invited to events that had little professional or personal interest, simply because I was in a particular position with an external legal budget. The relationships that were meaningful to me lay with lawyers (who may not have been partners) who were interested in my company and my job. Who went out of their way to think about how to make my life easier. Who found answers to problems I hadn’t yet articulated. Some of those lawyers were at large firms where on spend alone, I was far from a key client. Others were at smaller firms where the size of the account clearly did push the company into that category. But irrespective of the firm, I felt the love.
The message? I’m not sure, but on a personal level I do think life is too short to work on projects you don’t enjoy. So find a client or a lawyer you love, and give them a hug.
The Intelligent Challenge 
Great article Mark, hope you don’t mind I have posted it up to my senior management group.
Best wishes
Thanks Nick; the more people it reaches the better!
Absolutely. When I speak with law firms I often ask them how they identify their 20 top clients. Easy, they say. Last year’s billings; ranked 1-20. Yet this misses the point, sometimes dramatically. We then discuss the relationship ladder, at the bottom of which firms are not used, then used occasionally, then on the panel, etc, up to trusted adviser at the top of the ladder. I then ask them to think about a big client on their ‘top 20’ list client for whom they are an occasional supplier. Let’s say a big corporate with $20m+ legal spend of which they get say $2m, but for whom, frankly, the client would hardly notice if another firm was doing their work. (Easy pickings – there’s always a client like this, often rather too many as it turns out). Then I ask if they can think of a client not quite on their top 20 list (and not getting a whole lot of loving as you say) but for whom they get the client’s entire legal spend of say $1m (I have found that this example scales well for whatver size firm) and the client thinks they are the best thing since slicved bread. OK, which is your most valuable client of these two? Even now, most partners still say the $2m client. OK then, I say, even putting aside that that client wouldn’t even notice if the firm disappeared tomorrow, how do you measure the referrals that flow from each of these clients? This is typically met Homer Simpson style. Duh? What’s the most compelling marketing message? Love the marketers, they’re smart and persistent, but it ain’t them. It’s ‘someone like me, recommending someone that they think is brilliant’. So, is the $2m client recommending you? thney hardly notice you exist. Yet the $1m client, every opportunity that arises, at chamber of commerce meetings, businesss lunches, etc, whenever someone whinges about their lawyers, he/she says “well, the lawyers I use are just amazing, they…” Now, if that client has over the years darwn half a dozen other clients to the firm, with a total spend of say $500,000 each, how do firms measure that? Of course, not one of them make the grade of MVP client. Yet the reality is that the ‘only $1m client’ is actually drawing $4m to the firm, twice as much as the ‘top 20 client’ – yet is below the radar, alrgely ignored. Then let’s say the CEO finds that the price of his non-loving by the firm is that he’s paying rack-rates and getting none of the value adds that others receive? Hmm, does he/she feel quite so loved now? Is he/she recommending the firm quite so much any more? The sad thing is, firms don’t even notice, until it’s way too late, as these seiously most valuable clients quietly fade away. Nor do they notice, until it’s too late, as the recommendations drop away. You gotta see the loving, and give it back, for it to stay true forever…
Man, what an awesome comment. Brilliant. Telcos often talk about lifetime customer value, but your analysis, by incorporating referrals, goes further still and I think delivers even more value. Spot on.