Legal Market Strategies for Uncertain Times

Why client service interviews are an innovative tactic. 

It’s said that wars are won by strategy and battles are won by tactics. If that’s the case, then uncertainty around upcoming international political events—Canada’s federal election, Brexit, the 2020 U.S. election and forecasts for a financially-soft 2020 worldwide—may be among the factors that spur discontented clients to force change upon traditional law firms or leave them high and dry.

Best to be prepared strategically. Better yet, employ a proven and rarely used tactic that builds trust and loyalty, and brings in new work: client service interviews.

Glance back 

Unless you’ve been living under a rock, you’re aware that in 2008 demand for legal services fell dramatically, along with productivity and profits for most traditional law firms. Demand has been relatively flat ever since.

On the flip side, the in-house crowd has been bulking up internal resources—people and systems along with expectations—while the continuing proliferation of alternative providers ranging from small startups to international behemoths are causing the global legal services market to heave like the dance floor of a nightclub at midnight.

The study, “Alternative Legal Service Providers 2019: Fast Growth, Expanding Use and Increasing Opportunity” was published recently by Thomson Reuters Legal Executive Institute, The Center on Ethics and the Legal Profession at Georgetown Law, Saïd Business School at the University of Oxford and U.K. research firm, Acritas.

It found that the growth rate for alternative legal service providers is exceeding expectations. Currently, alternative providers account for $10.7 billion of the market for legal services, which is a compounded annual growth rate of almost 13 per cent compared to two years ago. Furthermore, 25 per cent of corporate users expect to increase their spending on alternative providers this year alone.

Regardless of how they’re defined, alternative service providers are not a trend; they’re a major factor in how the world conducts legal business.

Here and now 

While many traditional law firms are reacting to the increase in legal service competition and client expectations, others remain inert. For firms determined to remain solvent and vital, the criteria are what they’ve always been: client engagement based on personal service and genuine care.

Client engagement starts with active listening. This is when two ears and one mouth used proportionally are critical to legal service delivery excellence. And, really, there is no reason why any law firm worth its salt should be coming up short in this respect. However, there seems to be a chronic hitch in the giddy-up.

Historically, client service interviews have been non-starters, at least in North America. In 2009, Canadian Lawyer’s General Counsel Survey found that 72 per cent of respondents had not been asked by their top law firms to participate in a client satisfaction survey. And over the last 10 years, these findings have gotten worse.

A recent Canadian Lawyer annual corporate counsel survey found that 87.8 per cent of large companies asked were not surveyed by their law firms. This finding is echoed by the 2019 Managing Partner Forum survey of 167 U.S. law firm leaders, which revealed that 77 per cent do not systematically measure client satisfaction in any way. However, 85 per cent said marketing and business development was their firm’s top priority.

This disconnect and continuing point of failure is not lost on clients who confirm that their law firms aren’t listening to them, don’t ask for input, appear not to be improving service levels, aren’t innovating in ways that benefit clients directly, and all in all, aren’t adapting to the new reality.

Is it any wonder that when law firms chose to turn a deaf ear, clients move more work in-house or seek other solutions?

Focus forward  

At its core, client care is human-oriented and low-to-no tech. It’s a cycle of listening, clarifying, and responding—the same traits that nurture any relationship, whether personal or professional. Automation, robotics, do-it-yourself fill-in forms or other technical functions are not particularly helpful and, frankly, they can be harmful. This is because when client care is demoted to a technical function with no human interaction, relationships can be damaged due to asking a client to provide feedback alone and often without full context.

It’s long past time for law firm leaders to ensure that they have a solid, institutional process for listening to and collaborating directly with clients.

Sophisticated law firms have been doing this in one form or another for the past 10 to 15 years. In comparison, the Big Four professional services firms have had client interview processes in place for over 30 years. Their interview teams do quantitative reviews of a client’s service on a regular basis while one-on-one qualitative conversations often happen yearly with the firm’s biggest and most valuable clients.

While quantitative measures can be helpful, feedback through conversation instills a greater sense of partnership and collaboration, enables a deeper understanding of what clients value, and can reveal untapped opportunities.

Disengagement and engagement 

When employed strategically, client service interviews can also enable a firm to learn which services are most valued and need to be grown along with those that should be downplayed or mothballed. As a growth strategy, these kinds of results can help a firm reposition to a more profitable market, right-size service offerings and teams, and/or ease the departure of unprofitable or troublesome clients.

Getting lean opens capacity to deepen relationships with current clients and take on more of their work plus attract new clients with work that sits squarely in your expertise wheelhouse. The results are positive and bountiful: higher market profile, better expertise strength, stronger brand recognition, tightly targeted growth, supportive clients and trusted relationships.

As we head into uncertain times, it’s inevitable that there will be skirmishes and perhaps more than a few battles. But by determining your strategy and tactics now—and following through on execution while having clients you want onside—you’ll be much better positioned to win the war.

This article originally appeared in Canadian Lawyer, September 2019; reprinted in The Dialogue on Remaking Law Firms.