by Barry Brownlow, December/January 1998
National, The Canadian Bar Association
With non-traditional competitors lining up to cash in on what they see as an unprotected market, lawyers must either develop innovative new products and better ways of cementing client loyalties or end up as victims in a competitive war of attrition.
A partner from one of the big-six accounting firms told me recently that the firm was considering offering a new one-stop shopping service for high-growth companies doing an IPO for the first time. Accounting, legal and even marketing services would all be on offer. What it's offering clients is the opportunity to get on with business and obtain the capital they need all for a price far lower than three independent firms could offer. As an extra bonus, the fee for this service would be confirmed in advance.
Barring a totally unexpected competitive initiative from some other professional service provider, this firm seems poised to own the IPO market in five years if it's managed properly. With its proven track record in understanding market needs and bundling services to meet those needs, it possesses a built in competitive advantage that smaller independents will find next to impossible to counter.
So how can your small or mid-sized law firm overcome this threat and maintain, or better yet, increase market share? We think the solution is to turn to your clients for help. But before you do so, take a hard look at your existing client list and ask yourself these questions:
The clients who satisfy all three questions are the ones you want to concentrate on keeping.
Next, pick three of these "ideal" clients and ask them if you can spend time with them to learn how to serve them better. This is a tough thing to do because it forces you to give up your "aura of expertise". We've tried it, though, and it works.
Our clients appreciated us taking this leap of faith. They understood that we were trying to find ways to improve ourselves as service providers and they bent over backwards to help us.
When we met, we asked them five questions. Here are the first four:
We took notes on everything they told us and paid attention to any differences between their perception and ours. I have to warn you this is an exercise in listening and not selling. If your firm is like ours used to be, you'll have to struggle to resist the urge to blurt out your professional opinion.
The last question was the most important one:
Once you've asked this, there is no turning back. You are telling your clients you want to change and they will expect it. If you don't deliver, your firm will be worse off than before it started.
After the meeting, we compiled a shopping list of services that clients need. We also had another list of things we did that our clients thought were unimportant. The next step was to cull our existing "product" line, to drop items that clients didn't want and to add products designed to meet newly identified requirements.
The side benefit we noticed right away was an improved relationship with those clients. And we hadn't even done anything yet!
The final step was to take our knowledge and convert it into a process that connected client needs to our capabilities and that could be applied throughout the firm. This resulted in two programs which have driven the success of our firm: the client needs assessment and the client service plan.
The client needs assessment: This annual exercise forces us to understand what our clients really want and the challenges they face. The meetings also bring important issues to the surface that neither of us expected.
The client service plan: Prepared in conjunction with the assessment, the plan includes a checklist of our firm's products. Clients can choose for themselves what they consider the most valuable services we offer. It also brings them up-to-date on the full spectrum of our new, expanded and improved product line and gives them a chance to tell us what else we should be offering.
One word to the wise here. We found the checklist a lot more effective when we customized it to reflect the direct connection between client needs and our services. For example, when we changed the item "tax planning" to "the sale of my business has been properly planned", interest in this area jumped.
The plan itself is only a two-page document, but it is a powerful tool. It outlines what we are supposed to do for that client in the next year, who is going to do it and when, and, oh yes, how much it will cost.
Spending non-billable time with your clients is a major investment, but one that paid enormous dividends for our firm. We think this approach to partnering will work equally well for lawyers.