Oct 16 '12
Whilst we were at the PM Forum Conference we bumped into the wildly inspirational Susan Saltonstall Duncan from Rainmaking Oasis in the USA. This post is one of four that discusses the findings of a survey conducted jointly by the Financial Times (FT), the Managing Partners’ Forum’ (MPF) and Meridian West. The survey results were pre-viewed at a one day conference hosted by PM Forum in London on September 27. The posts reflect findings from the survey, sessions and discussions at the conference and of course, views of the blog’s author.
Everyone knows that CFOs are driving their companies’ legal departments to cut expenses by 15-20% per year. Unfortunately, outside law firms comprise the largest percentage of that legal spend, hence continue to be the target of those cuts. Consistently, the 2012 FT/MPF/Meridian West Survey found that 61% of clients are trying to achieve more with less. This has resulted in more RFPs and cost-bidding contests, and also a standard in service agreements that certain value add benefits be included at no cost. Seventy-four percent of CEOs said they “expect more added-value extras from their advisers.”
There were some surprises in the survey findings, however, both in the gap between what clients knew was available from their firms (see highlighted boxes) and also their perception of the benefit. You can see below that of the many added-value offerings firms provide, clients often were much less aware that these were available.
|Added-value offering ranked in order of how beneficial clients perceived them for all advisers||Do clients know advisers have this in place?||Does your firm have this in place?||Clients who find this beneficial||Advisers who think clients find this beneficial||How clients of law firms ranked these in terms of desired investment|
|#1 Regular independent feedback||30%||48%||61%||54%||#1|
|#2 Key account planning||36%||52%||57%||68%||#3|
|#3 Access to learning and development network||17%||37%||34%||41%|
|Knowledge briefings/white papers||38%||56%||27%||42%||#2|
|Access to firm’s intranet||16%||19%||24%||25%|
|Interactive social media||5%||0%|
The value of ongoing and meaningful feedback that was focused on the client’s needs was the one of the two most valuable added-value offerings advisers can provide to clients, and the place where law firm clients encouraged the most investment going forward. This and key account management strengthen a firm’s understanding of the business and deepen the relationship. As qualified by both Tim Bratton, GC of FT and Liz Kelly, GC of Nationwide Life Insurance, however, “This is only valuable if my lawyers seek my feedback when it is focused on me, what my needs are, and how they can meet those needs. It is not acceptable when firms come and seem to be going through the motions of getting superficial feedback and not really focused on me, or if they come with the intent of selling me more services.”
Knowledge briefings (Alerts) /white papers ranked second in value for clients of law firms, however, clients added that if these were tailored to a company, or included an opinion (“point of view”) by the firm, they would be even more valuable. GCs also have noted that often, receiving a phone call rather than a mass mailing about an issue of importance, can be much more helpful to them.
Tim Bratton, GC of FT said that a lot of what the survey noted as “added-value” he considers to just be part of the baseline service offering. This would include everything from client feedback to newsletters and briefings, to free seminars and account management. When a managing partner from the audience asked Tim how his firm should bill the time for account management to a client, e.g., as a retainer or add it into the hourly rates, the answer from the panelists — after they recovered from the shock of the question — was that there should be no charge for account management, that it is the cost of delivering exceptional service and work product.
I offered the following additional pointers on how to provide added-value to clients:
- If your firm still relies primarily on hourly billing and utilization, set up a non-billable “value” account for each client that generates over a certain amount of revenue. Into this account, record time and expenses for all items related to relationship development , service and enhancement that cannot be charged to the client: team calls, bringing someone new up to speed, on-site CLEs, visits to the client for feedback and continuous improvement, secondments, account management, briefings/alerts, etc. At the end of each year, summarize these services to the client and have a discussion about which of these was valuable, which wasn’t, and how you could improve in any areas of added-value. This not only allows you to remind the client of the investment you have made in the relationships but also allows for dialogue on how to improve your offerings and value.
- Develop good knowledge sharing sites – data bases, templates, prior work, content, thought-leadership pieces, etc. and provide access to clients.
- Conduct surveys on specific areas in sectors and markets that would provide you with valuable insights to share on peer benchmarks and trends.
- Embed good collaboration into your culture. Clients know when firms provide seamless service, across practice areas and offices, from lawyer to lawyer. And more clients are using a less formal method than the Pfizer Alliance does for asking partners from different firms to work together on specific cases or transactions. This requires sharing of strategy and knowledge.
- Invest in project management technology and tools that will bring maximum efficiency to the way you accomplish work and budgets for clients. Help them enhance their own approaches if they haven’t already done this in their own departments.
Our fourth and final post on these survey findings and presentation will address what law firms need to do to actually improve in the areas noted in the survey in order to enhance their relationships with and value to clients.