Tag Archives: client relationships

Excuse me, I think your pricing is broken

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I was pleased to read the post on 3 geeks about value billing as this is definitely a topic that needs exploring further, not least because I’m astonished by the number of law firm partners who continually tell me that it’s for clients to find a pricing model that works for the firm’s services.

Caroline the Finance Director had the new pricing model absolutely nailed

The common refrain from private practice lawyers (especially those who know how I feel about hourly rate billing) is that in-house lawyers who talk about value based billing really just want to pay less, and are not really interested in concepts like sharing risk. Opening a dialogue about pricing is simply an exercise in getting the law firm to do the same work for less money.

I my have missed the point, but of course they want to pay less!

The fact that the firm hasn’t developed a model that really meets their needs, or if they have the firm can’t communicate it in a compelling model does not turn this into the client’s problem. It’s the private practice lawyer’s problem. It’s the firm’s problem. It’s the profession’s problem.

The market has changed.

Forever.

Except for those highly differentiated firms that have unique or otherwise genuinely marketing leading skills and expertise, law firms are shifting to being price takers rather than price setters in the market. As barriers to entry in the legal market fall, and new models of legal service delivery emerge, clients have more choices about how they resource work:

  • Big firm, small firm?
  • Global firm or international network?
  • Insource, outsource?
  • Disaggregate, multisource?
  • Onshore, offshore, nearshore?
  • Automate?

Fewer and fewer GCs respond well to a conversation with a law firm that starts at a notional rate card, which of course is all great news if you’re a firm with some creativity and innovation.

To me, understanding value starts with a conversation with the client.

Too many firms assume that clients all want the same thing, but in my experience the range of client needs and expectations are almost infinitely variable.

Organisations of a similar size in the same vertical industry may look similar on the outside. They may have similar sized legal teams which do similar types of work. But actually the underlying businesses may have different operating models, different shareholder expectations, different objectives, different risk tolerances and of course different legal budgets. What they want from their internal and external lawyers may be very different, in fact it might vary significantly across the business.

There are a whole host of client needs that might emerge from a well structured conversation, implemented through some good questions.

The challenge for the law firm is then to define the service that would best meet those needs, identify the variables, work out what the cost implications of those variables are on the overall cost of service delivery and then stitch the whole thing together into a great value proposition at a compelling price.

Some of the variables might include turnaround times, the style of advice (who is the ultimate recipient – business person or in-house lawyer?), the  level of detail, different types of relationship management (dedicated team?) and the hours of operation/availability for the external lawyers.

Thinking about how these factors help the client’s business, as well as the needs of the inhouse legal team, can provide a deeper understanding of value – for example will a quicker response time allow a deal to be completed more quickly? If so, what does that mean for the business?

From this baseline understanding, the firm can get creative, but to do so also needs to ensure they really understand the cost and benefit to the firm of moving these “levers” (i.e. changing the variables).

Cost is often not simply the employee cost, but also may encompass opportunity cost or the cost of holding WIP for specific periods of time. The flip side is that the benefits to the firm can be broader than simply revenue – improved cash flow, client referenceability, employee retention (if the work is prestigious or interesting), replicability (the ability to reproduce the output for other clients at lower cost/higher margin) are all benefits that have value and can be quantified.

With all these factors to play with, plus of course the dynamic of genuinely sharing risk and reward with a client, I would be amazed if a firm couldn’t find a pricing mechanism that works for both the client and the firm. Once some pricing options (hint: that last word is a useful one in these conversations), the overall value proposition for the service offering can be pulled together and communicated. Law firm BD has become increasingly sophisticated, and there are plenty of skilled professionals who can ensure the resulting proposal is truly compelling and is tightly tied to the value it will deliver.

So I’ll grant you this – it’s more effort than simply negotiating percentage discounts on an hourly rate. It requires you to understand the client’s business in more depth, but also your own. But surely both of those are worthwhile steps in any event.

And if you do get a client who is genuinely not interested in this type of conversation (assuming you are not in the commodity market where the price genuinely will be just about lowest price), then maybe they’re not the right fit for your practice?

Or maybe you need to go back and tweak the model some more…..

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The Joy Of Secs (secondments)

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I’ve been hanging out with a lot of in-house counsel recently, and one thing’s clear.

They love their secondees.

Really love them.

The working environment on secondment wasn't quite what senior corporate associate Sarah was expecting

Whether it’s a GC who is relying on a specialist skill set that he or she can’t quite find the budget to recruit, a mid-level corporate counsel who is working with a junior lawyer from private practice who helps with the “heavy lifting” on a big deal, or a small in-house team that find having a secondee gives them much broader access to their external law firm’s resources than their usual interaction – the sentiment is unanimous.

For law firms, secondments offer some incredible benefits too. Time and time again, clients point to knowledge of THEIR business as a critical factor in selecting their external lawyers. The insight secondees getting living and breathing in that environment can’t be gained from market research or reading up on the company. Plus, alongside the knowledge of how a client works, their culture, their pain points comes the opportunity to build broader and deeper relationships – not just with the in-house teams, but with their internal clients too.

Where a secondment programme has a rolling element (whether trainees or more experienced lawyers) and the firm puts in a continuous series of lawyers over time (for example a change every six months), this can build an incredibly strong connection over time between firm and corporate team and build a powerful competitive advantage for an incumbent law firm.

Outside of the particular secondment relationship, lawyers often return to private practice with a broader skill set and a better understanding of clients at a more general level, and are much better placed to empathise with the in-house community as a result. Plus in-house experience, even at a secondment level, really does does count when pitching for work with corporate counsel.

So it’s all sunshine and light?

Hell, let’s try and stick everyone on secondment and then we’ll never lose a client. Right?

Alas, it’s not quite that simple.

The major challenge law firms face is economics.

The basic premise of a secondment being that if a client has enough of the right type of work (generally consistent in terms of volume, skill and experience required), but not enough to make permanent recruitment an option, then taking a single lawyer on secondment will be cheaper than paying for that resource on an hourly rate basis. In return the law firm gets guaranteed utilisation of the lawyer, a degree of certainty of revenue and predictable cash flow.

But the world has changed. Because the competitive intensity in the legal market is increasing rapidly, and because firms have wised up to the broader benefits of secondments (set out above), the price that in-house teams have had to pay for a secondee has fallen rapidly.

As the economy tightened, putting secondees in “at cost” became more prevalent. At a superficial level, this again made sense – with firms restructuring and struggling to find work to keep all their lawyers busy (and therefore employed), farming them out to clients allowed them to retain their good people while keeping clients happy.

But in reality, often the exercise often ended up costing the firms more than they anticipated. Questions arose to what “at cost” actually meant. Was it salary cost (and if so did that include benefits, bonus etc)? What about a proportion of overheads (often asked as the finance director walked past the secondee’s empty desk in an expensive City location)? Who picked up the tab for the upgraded laptop that was required to get on the client’s network? What about the opportunity cost when another project turned up unexpectedly and the firm was struggling for a particular resource profile to do the work efficiently?

As the requests for secondments increased, difficult decisions had to be made – who can we say “no” to? If we say “no” will another panel firm put someone in? Is it an investment rather than a revenue stream, and if so, how do we calculate the return on that investment?

Competition for resource within firms, already fraught with politics in many cases, heightened.

The pressure on resources is made worse still when a secondee doesn’t return (not as sinister as it sounds!). Two common outcomes are that the secondee “goes native” and is simply recruited by the client. If the relationship with the law firm is financially material, the firm will have limited ability to negotiate any form of compensation, irrespective of terms in the engagement letter. The other alternative is that the secondee gets a taste for in-house life, and after returning to the law firm simply finds another job with a corporate legal team as quickly as possible.

Speaking from experience, while I had already decided that an in-house role  was probably the next move for me, three months I spent on secondment a year before I made that move did help to crystallise my thinking when the time was right to make the change.

Another challenge is for longer term secondments, how does the law firm effectively keep the connection with the secondee? I’ve seen this challenge at several levels – from the junior associate living out of a hotel for nine months, disconnected from her peers and far from her family, to the partner slowly becoming marginalised in the partnership and losing the emotional connection to the mothership.

Pros and cons.

Swings and roundabouts.

To my mind however the overall value equation is clear. If the engagement is structured well, the economics thought through and the fit between secondee skill set, personality and appetite with the in-house team’s culture and need is good, a secondment is a winner every time. The key is not to assume every secondment fits this model and to put the time in up front to get to a working relationship rather than to simply react and throw resource in at every opportunity that comes along.

Happy seconding.

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Can your clients say goodbye?

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Regular visitors to this blog will know I’m a big fan of Michael Porter’s work, and have a genuine belief that all business people should read his two books (Competitive Strategy and Competitive Advantage). Competitive Strategy provides a framework for analysing industries, and helps the reader think about how attractive their marketplace is.

Wisto & Partners' client wanted to make sure the message was fully understood

One of the determinents of this attractiveness, are the presence (or absence) of “barriers to entry”.

If a market is particularly profitable, the high profits will attract new entrants who will join that industry and increase the competitive intensity of the market (ringing alarm bells any UK lawyers?!). This ultimately reduces profitability across the industry. Barriers to entry are factors that stop these new entrants, or at least make it more difficult for them.

One of the most obvious barriers to entry, is of course regulation. The legal profession has benefitted from this in most countries for many years, and only now as the cold wind of deregulation blows through town, do we see this barrier to entry crumbling.

However, this isn’t the barrier to entry I want to consider  today.

Rather, let’s spend some time thinking about “switching costs”  – essentially these are one-off costs that a buyer (i.e. law firm client) faces when switching from one supplier’s product or services to another’s.

Now on the face of it, the concept might seem  more relevant to industries other than legal services – for example if you were switching your CRM (customer relationship management) software from Oracle to Microsoft. There you might have data migration costs, systems integration challenges, and user training issues.

However, it was another book, Information Rules by Shapiro, that got me thinking about how the concept of switching costs could apply to legal services.

The situation I want to investigate is not whether or not a client wants to stop using a particular law firm or not (see some of my previous posts on client relationships or quality for factors that might influence THAT decision), but if they do make the decision to say goodbye, how hard is it for them to actually make the switch.

At the lower end of the spectrum, where the relationship between clients and law firm is pretty transactional, there are very few switching costs. The client takes their business elsewhere (probably not even telling the previous law firm), gets the minor hassle of identifying a new firm, making contact, and then after engagement letters and anti-money laundering checks are complete, they are up and running.

Another fairly unsophisticated, but surprisingly effective tool at the lower end of the spectrum, is the classic smaller firm technique of being named as the registered office of a company (possibly supported by company secretarial activities). Not a major block to an advisor move, but certainly another layer of inconvenience. There are plenty of similar examples for consumer based law firms (for example, retaining a copy of the client’s will).

Moving up a level, where the relationship with a corporate client covers multiple services, and includes a large degree of interaction, this can definitely make a move more difficult, particularly if both the legal team and business people (for example the HR vice president) at the company instruct the firm.

It might be that this type of broad relationship benefits not just the law firm, but also the client, in that the larger volume of work underpins significant price discounts. Subsequently trying to move one work type to a new firm could put those enterprise-wide discounts at risk. These broad relationships provide even stronger ties (higher switching costs) if the relationship is multi-jurisdictional.

Many firms try to achieve this type of model, but a much smaller proportion really do it effectively, frequently lamenting their failure to cross-sell and up-sell. Perhaps the notoriously protective attitude of many partners to their clients (and the firm cultures that support these attitudes) contribute to this, or maybe it’s the siloed nature of many larger firms that makes providing a truly integrated services to clients challenging, but either way, experience suggests it’s not as easy as it should be.

The other large switching cost that might cause a client to think twice about a move, is the depth (as opposed to the breadth) of the relationship with the law firm.

If the firm has made a large investment in understanding the client, this can be difficult for a new supplier to replicate. Here I’m not just talking about understanding the way in which the client works, but also things like their commercial models, their decision making process (formal and informal), the personalities involved, their history, their competitors and their products.

If this is done well (and both in private practice and in-house, I have seen firms do this VERY well), then this is a benefit which should be carefully weighed up before a relationship is terminated – it’s not the type of information that a new firm could harvest in an “investment in a new relationship” (such as spending two days on-site with the client, notionally free of charge).

Another area of potential switching costs can arise from technology and documentation ties. If a law firm provides a useful extranet for a client, or hosts a large number of important documents (having perhaps scanned and indexed them for the client), then a move may put these benefits at risk. Greater technical integration (such as access to time recording systems, maintained and automated precedent banks) offers clients higher benefits but may also increase switching costs.

So in my view, switching costs are alive and well in the legal profession, even if they are not recognised as such. With one critical barrier to entry being swept away in the UK with the full implementation of the Legal Services Act, it’s maybe time for law firms to look at the concept of switching costs a little more closely.

The one caveat I’d say, is that often creating switching costs requires an investment by a law firm. To know whether that investment makes sense, the firm really needs an understanding of the likely return from that client, and the concept of “lifetime customer value” is not often applied in the legal profession, but that’s a topic for another post….

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Meaningful New Year’s resolutions

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I know it’s a cliché, but it’s that time of year when all the talk is of resolutions. So take a break from diets, exercise and learning to play the ukulele/starting a salsa class/swimming the channel, and take the next ten minutes to think about some simple  steps you can take over the next 12 months to transform your practice.

The Head of Litigation's resolution to run the 20 miles to work everyday caused concern among the management team

Before I offer some suggestions (you knew that was coming didn’t you!), let me caveat them by saying that while none of the suggestions are rocket science, implementing them regularly will require behaviour change (if of course you are not doing them already), and behaviour change is hard. There is, however, a growing body of research-backed literature on how to establish new behaviour patterns, so help is at hand if you want it.

When I jotted this list of suggestions down, I tried to get a list that built on the piece I wrote at the end of 2010 on value disciplines (which is here) and in the spirit of that piece I hope you find something of value to try, adapt or play with…..

(Really) love your clients

Identify your five best clients. Best might mean different things to different lawyers – maybe they are the organisations you want to work with most (either external clients or departments/subsidiaries if you are inhouse counsel), maybe they are the organisations that provide you with the most revenue and/or profit, perhaps they are the clients which stretch and grow you most. Whatever the reason, make the resolution to really get to know them and their business over the next 12 months. Become intimately acquainted with their challenges. Read around their industries. Understand their job.  Know what their competitors are doing. Anticipate their legal needs before they do. Tailor your service for them. Get to know them as human beings. Make sure that every week, you are doing something like this to deepen and strengthen the relationship. Score the relationship every quarter (if appropriate, ask the client to score it). Ask for nothing extra from the client yet see the benefits unfold with the months of the year.

Investigate how you work

Take a piece of work that you or your team do regularly. It can be a piece of client work (whether in a law firm or in a law department) or a process that supports the work  (administrative, knowledge management, business development). Next put a couple of hours aside, and lock the main participants in a room with a flip chart, some big markers and a stack of post-it notes. First list the key clients for the process (this can be inside or outside the organisation) and then work out what are the key objectives of the process – what is it designed to achieve and what are the best metrics for success. Next draw the process on a large bit of paper. This doesn’t have to be complex – put each step on a separate post-it note, arrange the steps in order (showing decision points and variations if required) and then use the pen to link them up. It might be that this step in itself takes some time, particularly if several people perform the task in different ways. However, don’t spend more than an hour on this step.

Once you have a visual view of the process, think about how you can improve it. Think back to the people you identified as clients of the service – what does “better” feel  like for them? Is it faster? cheaper? in a different place? with fewer errors? in a different format? including different information? Once you have established what better means, work how how the task could be done differently to achieve it. A useful question is “if we were a new organisation looking to do this job optimally for the first time, how would we do it?”.

When you have some ideas for improvements, identify the top three (tip – to rank them think about the impact the change would have versus the ease of implementing it) and then set yourself a timetable for implementation. Aim for one of these two hour workshops a quarter – you could either choose a new task each time, or stick with the same task but look to continuously improve it.

Take a product to market

Now while at first sight this might seem irrelevant for corporate law departments, while the terminology might not seem as appropriate as for a law firm with an external market, the process itself can devliver real value to corporate counsel and their clients. As for law firms – well, some firms are already well practised in product development, while others are dabbling their toes, but if you haven’t thought about it, perhaps this is the resolution for you….

Firstly, start with a particular group of clients you think you can help. Work out what are the characteristics that define this market (is it an internal department, a particular group of colleagues, a set of organisations in a particular vertical, a group of clients or prospects in a particular geographic area etc etc). Then focus on their needs – this is absolutely critical. To be successful I absolutely subscribe to the theory of “outside-in” thinking in the book “Tuned-in”, which stresses the need for a new product to meet a defined market need.

Once you have a target audience for your product (and don’t get stressed out about the word “product”, a service is just fine) and have worked out a need, then work out how you can meet that need and help the clients (be they internal or external). Identifying what is different about your solution from what is already available is a useful step to begin to formulate your value proposition (see previous posts for discussions on this, or even better have a look at Jill Konrath‘s book “selling to big companies”).

The next step is to work out how to build and deliver the service, and validate the financial model behind it. If this sounds intimidating, it doesn’t have to be. At i’s most simplistic, work out the cost (which for lawyers is likely to be largely based around the cost of people’s time, both in developing and then delivering the product) and then work out the revenue (for an inhouse service the benefits may be expressed other than in revenue terms). This is no more complex than the price (see Mark Burton’s great book Pricing with Confidence for help here) multiplied by the amount you think you can sell.

If the business case stacks up, then get it built and out there. If this is the first product you’ve ever developed, my suggestion is to start with a low cost, low visibility offering to allow yourself to learn as you go through the process. There is certainly something to be said for getting to market quickly and then revising a product, rather than getting it perfect and missing the moment (of course the validity of this rule depends on the circumstances).

So what has this done for you? Well, if you’d not taken a product to market before, hopefully you’ve learnt something and will be inspired to learn more and do it again. For newbies or old hands, hopefully in engaging with your target market you have learnt something more about their needs and had dialogue that has created value for all involved. And finally, if you’ve done a good job with your product development, then hopefully the revenue (or other value) from the product is rolling in!

Happy New Year

There are of course lots of other resolutions we could make as members of the legal profession – I’m very interested in others you want to share. Suggestions for this blog are always welcome too, and to sign off this week, let me wish you all a happy, healthy and successful 2011.

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Time to call for Superlawyer?

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Having a cup of tea recently with one of my former colleagues, I was struck by the genuine excitement he still feels for the rich challenge offered by his work, even after 20 years in the saddle. Talking about what the future holds, it was clear that the profession offers a long-term and stimulating path for him. I also suspect it is this fascination and enthusiasm that is at the heart of him being so good at that aspect of his job. He was undoubtedly one of the best legal technicians I’ve ever had the good fortune to work with; a kind of super legal ninja if you will.

Ninja Lawyer prepares for another victory for his client

My thoughts then turned to other legal super heroes I’ve known. Some of them I’ve worked with, some of them have advised me, others have been competitors, but all have had legal “super powers” that in my mind mark them out as special. How many of these types do you know? In your firm? In your in-house team?

The first legal hero that springs to mind is “Client-Advocate”. Always focussed on the client, every timeline, piece of work or other deliverable is scrutinised with the client in mind. Will they be delighted with it? Will it help them on a personal level? I remember working with a lawyer like this during my training contract, and when reviewing a fairly basic letter I had drafted for example, they were always looking for areas it could be improved and making me think about how the client would feel when they read it: “if you had paid £200 for this letter, and the name of your company was not spelt correctly, how would that make you feel?”. These are the lawyers I would want managing my account and learning about my business. These are the people that clients find it easy to follow and hard to leave, and often have strong personal relationships with.

The second is “The executioner”. Not because of a ruthless attitude to litigation, but rather a single minded focus on, and commitment to, the discipline of execution. Getting things done. These legal giants can be found in many different arenas, from large scale corporate deals to complex litigation. These are the guys and gals that drag the ball over the line. They are the ones who when confronted with roadblocks outside their immediate control (be it a less than helpful partner in another team, an errant sales person on a deal or a particularly difficult or incompetent lawyer on the other side) will not sigh and point to the cause of the delay, but will just find a way to get things done. Often found motivating their teams when the heat is on and the hours are long, these are lawyers that clients turn to when they need a high value matter sorting out and just want to know it will get done, and get done right.

The next is “Planet Brain”. Many lawyers like to think of themselves in this category, but in my experience the real stars in this category stand out from the masses (many of whom are of course very bright) by a mile (and just for the record I was definitely not in this class!). There are different strains of this hero. Some are just phenomenally fast; so quick to grasp new ideas and come up with answers that they seem to operate in a different dimension. I used to work with a couple of lawyers like this and often they seemed to have digested what I’d said, before I’d actually said it. However, being patient and good listeners, I always got to finish what I was saying and never felt rushed, despite the fact I sensed that they were always two or three steps ahead. The other category of Planet Brains are those that think so deeply about things (which doesn’t necessarily mean slowly) that they are capable of penetrating insight which can often stop a meeting or negotiation in their tracks.  Some of their output (whether oral or written) can blow you away it is such high quality. These are the people that in the right context, the £500 per hour you could pay for them would represent tremendous value for money.

Finally, a category that is in my experience rarer than the rest. These are “Talent Growers”. Lawyers that think and care about succession and personal growth. The people who go way beyond their line responsibilities to supervise and train colleagues. The people who will coach and mentor colleagues and clients alike. I have had the good fortune to work with a number of these, but perhaps the most striking message was one former boss who told me very early on in our relationship “I expect you to spend at least 20% of your time developing your people. If you don’t do that, you will fail me”. I thought that was a tremendous message and it empowered me to act in a way that was consistent with that approach. I was also held accountable for my own development and grew phenomenally as a lawyer and a person while we worked together.

So, there you have it. A collection of legal super heroes. There are undoubtedly more (suggest some in the comments below if you like), but hopefully these should get you thinking. The message I’d like to leave you with is that in these increasingly competitive times, all lawyers need to think about why clients (be they external clients for private practice lawyers or internal clients for in-housers) choose to work with them. Once this has been identified, how can you enhance this? Make it more different? Make it more widely known?

You don’t need to put on a cape or wear your underwear over your trousers, but you can reveal your super powers.

Lawyers’ love in? Working collaboratively with competitors

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Whether it’s the ongoing media focus on our new coalition government, or just the emergence of some spring sunshine, I’ve been thinking about happy togetherness this week. One of the things that used to warm my heart most in-house was when my key law firms used to work together collaboratively and effectively on projects for the company.

The panel firms thought this collaboration was going too far....

Talking about this subsequently, many private practice lawyers find the idea strange (perhaps even unpleasant): “what if the other firm dropped the ball?”, “what if we disagree and give conflicting advice?”, what about our opportunities to cross-sell?” and “surely it would be quicker/cheaper/easier with one firm?”. The short answer is of course that it just worked. However, a little more meat on that answer might be helpful.

Firstly, trust was critical to the network of relationships. I had invested time and effort in developing deep relationships with a handful of firms, and the law firms involved reciprocated this effort. These relationships were typically centred around different areas of work, geographies or specialism. The firms knew which other firms provided services in those core areas and that as long as those relationships continued to function effectively, the switching costs and loyalty involved would mean that this work would stay where it was. That fact, along with an understanding of my approach to buying legal services, meant that the firms never tried to eat each other’s lunch. That’s not to say they weren’t entrepreneurial or wouldn’t compete for work that was put out to tender, but that for the regular work, all the players in the team knew their role.

While I encouraged them to communicate, over time they began to discuss service delivery best practice, and work between them became seamless, and I think the ultimate validation came when problems did arise (as of course they would if a single firm was dealing with a complex transaction). Issues were resolved quickly and professionally, with no finger-pointing or backside covering.

Let me give an example of how it works. Let’s say I was leading a build-operate-transfer technology outsourcing deal for my company. I would lead the deal and negotiations, acting as the primary legal contact and interface with the business. My go-to commercial firm (an excellent UK practice) would be my main support on the main documents and the ongoing service provisions. this would be the firm that best understood our commercial models and licensing terms and also had the greatest familiarity with the business people involved. On the employee issues would be a niche City firm that had harmonised our terms and conditions across many jurisdictions and who knew our HR practices and attitudes inside out. The “operate and transfer” part of the deal could have some complex corporate and tax aspects which required a global firm, and our London account partner would co-ordinate that advice from their overseas offices, calling on their background working with us on acquisitions.

Revolutionary? I think not. Part of a strategic master plan? Nope. Was it effective? Yes. Were the lawyers involved comfortable working that way? Yes. Worth considering in future if you are part of a group of firms working regularly with one client? I’ll leave that with you….

Test your lawyer with a moment of truth

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In the commercial world, cries of distress can often be heard. From corporate counsel, from HR directors, from CEOs. Every now and then, a big, bad and most of all URGENT problem arises. Maybe it’s a really important client contract going wrong, and somebody mentioned litigation. Maybe the IT team have found porn on the MD’s laptop. Maybe news of a top secret M&A deal has leaked and reached the market. Maybe one of the senior management team has been detained at an airport overseas for political reasons.

Sometimes when you need a lawyer, you REALLY need a lawyer

These are the moments of truth for law firms. When reputations, jobs and companies are on the line, this is the time to perform. And perform well. These moments can cement a relationship like no other. A law firm can spend a fortune wining and dining to impress clients and make them feel special, but if they don’t perform when it counts, then it’s money down the proverbial drain (which in the current climate is not a smart move). For the law firms that major on relationship management, even the strongest relationships  can be harmed in these situations. On the flip side, get it right, and I won’t say you have a client for life, but you will have made a major deposit in the trust bank account.

The challenge with these situations is that they might in some way be outside the usual scope of the relationship. It maybe a different work type, a different person in the client organisation calling, an unusual time or simply a bigger piece of work than usual. The question the law firm has to answer, is whether their operational model can deal with these requests effectively.

Often it’s not the legal advice that is difficult. If the call comes in out of hours, will it reach the right person in time? If it needs a different skill set, can the account partner get the internal resources allocated in time? If the firm needs external support (a forensic accountant for example), does the law firm have the relationships in place. If the key contact person is tied up, can the incoming message be effectively prioritised by someone else in the firm. If matters need escalating (either within the firm or within the client) can the law firm facilitate this?

Scenario planning is used often in the strategy departments of companies to ask the question “what happens if”, and to start analysing the implications of different scenarios on current plans. While a full scale planning exercise may not be necessary, asking the question “what happens if” and then discussing possible outcomes within the firm and indeed with clients can be helpful for lawyers. It’s a skill lawyers are good at, and a question they often ask clients when advising, but one that’s not often applied to day to day activity.

To finish on a positive note, the law firms I used during my time in-house did step up to the plate, and that’s one of the key reasons why I continue to recommend them long after I last instructed them.

The advisor of last resort?

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Speaking with the general counsel of a large multi-national recently, I was struck by the number of opportunities that her external advisors had to impress her. Many law firms often complain that it is hard to develop close, long term relationships with clients because the clients only contact them when they have a problem; the “advisor of last resort”.

Call for the advisor of last resort?

I think there are two key points to consider here. The first is that this highlights the fact that lawyers are largely used to solve client problems. Now this might sound like a no-brainer, but there are millions of companies worldwide trying to sell goods and services for which the client need is not so clearly defined. If a client has a definite problem, then the law firm has a distinct opportunity to help them. Note that “help” is the critical word. Buying and using the legal service shouldn’t be difficult for the client, and if done right can lead to a real sense of gratitude from the client. The bigger the problem and the better the service, the truer this is.

The second point is that many of these problems can be nipped in the bud early, or indeed prevented altogether, if the client has the right advice upfront. Rather than waiting for the client to arrive with a problem, law firms can sieze the advantage and proactively go and talk to clients and prospects about this, rather than sitting and waiting for the phone to ring. Note however there is a big difference between initiating a dialogue with a client about a problem they are facing or may be about to face, and going to talk to a client to tell them about a service the law firm can sell them. It may sound like semantics, but in reality it is about ethos and intention, and the law firms that get this right, have the opportunity to build trusted and enduring relationships with clients that many other suppliers and advisors would envy.