The Complete Lawyer

Brand new research into client relationships reveals a startling finding: 87% of law firms have at least one major client relationship at risk. Yet few law firms are aware of their vulnerability—and even fewer are doing anything to change the landscape.

What Is the Client Allegiance Premium?

The BTI Consulting Group asked more than 650 corporate counsel how a credible law firm could replace one of its existing primary providers. The clients of 87% of law firms provided specific recommendations—the remainder did not. The 13% of law firms who serve this second group of clients have truly won their allegiance.

These law firms, The BTI Client Allegiance Leaders, enjoy the satisfaction of having a strong foothold with their clients. Even better, they capture substantial financial rewards. Specifically, law firms whose clients pledge their allegiance garner:

36.5% higher revenue growth
19.5% premiums on billing rates

This Client Allegiance Premium is the pinnacle of any client relationship. In the past decade, law firms have invested more than $6 billion and untold numbers of hours in attempts to boost client service. Today, 73.8% of AmLaw 200 law firms have established client teams, 69.6% deliver client service training and 56.4% conduct systematic client research in an effort to attain this Holy Grail. So why do so few law firms enjoy the returns?

Three Styles Of Feedback Drive Financial Rewards

One of the keys to realizing the potential of client service—and securing the rewards of the Client Allegiance Premium—is a world-class client feedback program. A high-caliber program combines three main styles of client feedback into a systematic, formal approach to gathering and responding to client insights:

Routine client interaction
Individual client assessment
Firm-wide performance analysis and action

1. Routine Client Interaction (informal, client-specific)
Virtually every law firm engages in regular client interactions. Telephone conversations, email exchanges and relaxed lunch meetings all provide informal opportunities to gain insights into client satisfaction, goals and priorities. This is, by far, the most prevalent style of client feedback—and the one with which attorneys are most comfortable.

Unfortunately, routine client interactions may also be one of the least reliable indicators of client service and satisfaction. Routine communications alone rarely provide ample information to direct strategic investment, uncover opportunities or even retain clients. Clients seldom feel comfortable during the course of daily conversation with their attorneys to raise pressing issues, voice underlying concerns or express dissatisfaction (especially if this dissatisfaction is with the attorney himself).

Making the most of your regular encounters requires a systematic, disciplined approach. Follow these four steps to empower your daily interactions with clients:

Identify any potential business opportunities
Record client preferences (communication style, billing, etc.)
Ask open-ended questions about the client’s business goals and objectives
Encourage management or marketing to visit your clients for feedback

Though these recommendations can help you make the most of your regular communications with clients, they are not intended to replace the two other styles of client feedback. Routine communications by themselves seldom impact firm-wide performance. In fact, without the third style of feedback, firm-wide performance analysis and action, we find the impact on financial results to be inconsistent and variable.

2. Individual Client Assessment (formal, client-specific)
Individual, client-specific analysis of satisfaction is typically how law firms ready to institute a more formal client feedback program graduate to the next level. Of the 56.4% of AmLaw 200 law firms currently conducting systematic client research, the majority rely primarily, if not solely, on individual client assessment. (Only a handful of world-class programs incorporate the final frontier, firm-wide performance analysis and action. This third style of feedback is essential to capturing the real financial benefits. We discuss this in more detail below.)

Approaches to conducting individual client assessments vary widely. Most common among law firms are:

Third-party surveys by mail or online
Managing Partner visits to clients
CMO interviews
End-of-matter surveys

Individual client assessments generally include summaries of individual client feedback and recommended client-specific follow-up items. Just over half of law firms call on third-party service providers to assist in one or more aspects of individual client outreach and analysis.

Four key factors characterize best-in-class levels of individual client assessment:

Client-specific evaluation of satisfaction, opportunities and relationship status
Client-focused design
Qualitative, experiential insights
Action plans to follow up on client opportunities and risks

Individual client assessments can deliver powerful, high-impact client feedback which enables firms to drive targeted changes and growth on a client-by-client basis. The strength of this style of feedback is in its granularity: it is specific, tangible and frequently actionable.

The downside is follow-up activities are often limited to those individual client relationships which get active, focused attention. This is the primary reason why individual client assessments alone do not yield the firm-wide financial benefits of a comprehensive program, which incorporates all three styles of client feedback.

3. Firm-wide Performance Analysis and Action (formal, institutional)
Fewer than 10% of law firms today embrace firm-wide performance analysis and action as a critical component of their client feedback programs. Yet it is this single approach that truly separates the mice from the men.

Firm-wide performance analysis and action compiles systematic insights from a select group of clients to generate an institutional assessment of performance and related strategic recommendations. This analysis is typically both quantitative and qualitative and includes competitive benchmarking. Law firms that perform firm-wide analyses consider them an extension of their strategic plan and regularly rely on this institutional insight to drive market direction and firm investments.

The size of the client group included in the analysis depends largely on the composition of a firm’s client base, as well as the specific goals and objectives of the outreach. For example, it may range from just 36 key clients who account for more than 70% of a firm’s revenue to over 150 clients representative of a firm’s entire client base. Few firms engage in this complex level of analysis without the assistance of a well-trained expert in research and analytical methods.