Leadership for Lawyers

Ballard hires Client Interviewer

Did you see this article in The Legal Intelligencer (also on law.com) about how Ballard Spahr hired a "non-lawyer" to interview clients with the sub-title, "Could this new form of communicating with clients lead to the end of law firm marketing?"

A few thoughts:

• Interviewing clients for fun and profit isn't new, but it is hard to do consistently.  Instituting firm-wide standards and practices to gain feedback on client satisfaction and opportunity identification is contrary to most silo-based law firm cultures. 
• The managing partner of Ballard claims that they will focus on interviewing the top 300 of the firm's clients in the first year.  Good luck.  Most firms are happy to do quality interviews of a dozen or twenty clients in a year.  Still, they get points for hiring someone to do interviews and orchestrate a client service initiative.
• The article interviews a consultant from Altman Weil, who I truly believe was misquoted, indicating that if firms listen to their clients through feedback programs such as this AND they have a strong sales functions, then law firm marketing as we know it will not be necessary.   While I agree that firms need to listen to their clients in order to provide a custom experience, and that firms need to develop a refined sales process, we will still need law firm marketers for many reasons, if only to support and direct these efforts.

Client service interviews are becoming big business.  Many firms are quietly conducting top client satisfaction surveys in one form or another.  In fact, a new generation of consultants - outsourced interviewers - are emerging and growing.  You can now hire experienced, professional and insightful interviewer from firms such as Wicker Park Group, Zeughauser Group, as well as multi-disciplinary consultancies such as Altman Weil and Hildebrandt.

Client Service Perception Gap

When I ask a law firm leader what makes their firm distinctive from others, most say, "We're really good at client service.  We are known by the high level of personal service we provide." 

Clients, however, disagree.  According to a new BTI survey, only 25% of clients give top grades to their outside counsel for client service.

Feedback is a gift.  Read the article here. 

Here's the BTI press release on the survey:

Client Satisfaction with Law Firms Plummets
Just 30.7% of clients recommend their primary law firm
Drives client spending to new law firms
53.7% of clients oust their primary law firm

Boston, March 3, 2006: The BTI Consulting Group’s fifth annual survey of corporate counsel reveals an unprecedented drop in client satisfaction with law firms. Just 30.7% of large and Fortune 1000 companies recommend their primary law firms. These deep dips in client satisfaction, reports BTI, promise to drive dollars into the hands a new set of law firms, unsettling the status quo.

“Large clients are making broad-sweeping changes in how they hire and work with their law firms,” comments Michael B. Rynowecer, BTI’s President, “These changes will translate into opportunity for a select group of well-positioned law firms.”

BTI’s study analyzes how law firms can position themselves to benefit from these critical changes in a brand new report, How Clients Hire, Fire and Spend: Landing the World’s Best Clients. BTI found an astonishing 53.7% of clients ousted their primary law firms in the past 18 months. More than 50% of clients also reported they plan to try at least one new law firm for substantive matters in 2006.

BTI conducted more than 200 independent, individual interviews with corporate counsel at Fortune 1000 companies and large organizations each year for the past five years."

It would be interesting to see how many lawyers ranked their firms as having excellent client service.

Another failing grade

I don't know what people are trying to tell me, but this afternoon I received more than a dozen emails with a link to an new ABA article on client satisfaction.  The article quotes a recent BTI survey stating that only 30% of in-house counsel are satisfied with their outside counsel:

"Some 70 percent of corporate counsel surveyed—most from Fortune 1000 companies—were dissatisfied with their primary law firms. A little more than half of the corporate counsel reported they had replaced or demoted at least one of their primary law firms in the 18 months prior to the survey—largely without any more notice than a reduction in assignments.

The survey was conducted by BTI Consulting Group, a Wellesley, Mass.-based market research and management consulting firm. The results were drawn from more than 200 interviews between July and October 2005 with corporate counsel at large and Fortune 1000 companies across more than 15 sectors, including banking, manufacturing, pharmaceutical and high-tech. "  - ABA Journal e-report

Doubt the numbers?

According to the 2005 ACCA/Serengeti poll of GC's:

"If outside firms do not meet expectations, in-house counsel are prepared to take action, with more than half of respondents (50.7%) indicating that they terminated relationships with at least some of their law firms during 2004. The primary reasons for termination remained the same as previous years: lack of responsiveness, too high fees/costs, and poor quality work/results." -- Serengeti Web site

On the ACCA.com web site, I found a recent (2005) survey illustrating 87% of in-house counsel have retained NEW counsel over the past year and 60% have fired primary counsel over the past year.

Let's check in with Inside Counsel (formerly Corporate Legal Times) for their survey of GC's:

"21% gave their law firms an "A".
70% gave them a "B".
8% gave them a "C".
1% gave them a "D".

Then, Inside Counsel asked law firms how they rank their relationship with inside counsel:

"52% rated it an "A"
25% rated it a "B"
7% rated it a "C".

What we have here, is a failure to communicate.

It gets better.  IC asked both inside and outside counsel if they thought client service has improved over the past five years.  68% of law firms said they agreed that service has improved, but only 32% of inside counsel saw improvement.   34% of in-house counsel plan on firing one or more of their outside firms in 2006. 

Marcie Borgal, a principal with BTI, shared her thoughts on the recent survey in an article in the Complete Lawyer.  It's worth reading the whole article.  She concludes with:

"What Clients Want In 2006:

The following is a list of clients’ most pressing needs and concerns, based on BTI’s research with more than 400 corporate counsel at large and mid-sized organizations nationwide. Keep in mind that client needs change every 18 – 24 months and be sure to stay in tune with your clients’ specific demands to avoid the pitfalls of declining satisfaction.

1. More value from law firms
2. Be in compliance
3. Preventative legal strategies
4. Streamlined operations
5. Alignment between business and legal goals
6. Document management solutions
7. Proactive education and advice
8. Litigation management improvements
9. Reduced risk
10. Practical business advice

The key to improving client satisfaction is in every client interaction. The professional services firms (including a handful of law firms) that have mastered client service successfully embed the above principles and tactics into their culture and daily lives.

Start small, add as you can and always remember the age-old truism, clients first."
-  TheCompleteLawyer.com

So, what does this have to do with leadership?

All of this news would be shocking, if we didn't hear the same feedback year after year, report after report.  The solution to improved client service won't be found in creative ideas, radical innovation, or technological improvements.  It can only improve through cultural change in law firms, instigated and led by visionary and strong leaders who are willing to challenge the 'silo' mentality of most firms and re-align EVERYTHING the firm does to serve the client.   

What are you going to do to change your culture, and align it to your clients?

Client Feedback Resources

Leadership is about making positive change in an organization that benefits both the client and the firm.  Feedback - internal and external - is absolutely critical to identify areas of growth, dissonance, and opportunity.  Here are some recent (and not so recent) articles on getting client feedback:

In the October 2005 edition of American Lawyer, Aric Press writes about how Reed Smith uses an internal GC Client Relations Director to gain client feedback. 

In this 2004 article on client feedback, the reporter details how Gray Cary, MoFo and Pillsbury Winthrop have droped big bucks on outside consultants to survey their clients.  The article mentions how Mozhgan Mizban of The Zeughauser Group is hired by large law firms to interview their key clients and report back on client satisfaction, opportunities for growth, and general health of the relationship.

Terri Pepper Gavulic of Hildebrandt has a good article on how to conduct client interviews here.  Terri and other Hildebrandt consultants urges firms, "now, more than ever, listen to your clients."

Bill Flannery outlines his key steps to successful client interviews here.  He wrote this article 15 years ago, and the tenets are still true.

Holland & Hart is one of the few firms to publish their client service standards, including a mandate for feedback. 

Consultant Laura Meherg has an excellent 'how-to' on client feedback programs here. 

Thomas Clay of Altman Weil writes about client feedback programs in his outline of what makes a practice group effectice. 

What are you doing to get feedback from your (internal or external) clients? 

What is keeping you from getting better feedback?

Serengeti GC Survey

Serengeti came out with their annual survey of in-house counsel at the ACCA meeting last month.   Here are a few highlights:

• -  76% of in-house counsel require budgets for some of their work, up dramatically from previous years.

-  Referrals from other in-house counsel, approved company lists and trusted outside counsel is still the number one way GC's select new counsel.

-  16% of in-house counsel use web-based applications (extranets) to manage outside work.  31% say they plan on using such systems in the future.

-  50% of in-house counsel fired outside counsel last year for the following reasons:  lack of responsiveness, too high fees/costs, and poor quality work/results.

-  On fees, the study said, "However, outside counsel costs are less of an issue now than they were in previous years. For the first time, “reducing outside legal costs” was not named as the most pressing issue for in-house counsel (even though it still ranks as the second greatest concern). The top issue of concern for in-house counsel in 2004 was “keeping apprised of company activities that may have legal implications”—in other words, compliance. This may be in part because of the increased oversight necessary as a result of Sarbanes-Oxley and other statutes, as well as recent high-profile litigation relating to compliance issues. "

The Press Release  can be found on the Serengeti web site.  Another good post on what in-house counsel is looking for can be found on Amy Campbell's blog.

What about Clients?

Last week I exchanged emails from west coast blawger Dan Hull.  He told his story of leaving a big law firm to start his own firm that focused on providing an extremely high level of service.  He doesn't compete on fees, nor did he downsize the complexity of his practice.  "We think we can compete on service alone." he claims. 

I think Dan is right.  GC's say client service is top among reasons to keep or fire lawyers and firms.  Large and regional law firms should quake at the thought of small, nimble, expert, high-service firms like Dan's.

Check out his blog:  www.whataboutclients.com