Surviving and Thriving With Clients Who Don’t Use Law Firms They Way They Once Did

Hayse.LLC – Despite today’s times being better for many law firms, the positive trends do not signal a return to the gilded pre-2008 days; unfortunately, those days are gone for good.  Law firms are fighting for market share in 2017 in an arena vastly more competitive than the one that existed a short decade ago.

Competition is not just from other law firms.  Clients are turning to alternative legal service providers for routine and commoditized legal needs.  Because these providers deliver services faster and cheaper for some tasks, many clients pass on using law firms.

Other non-law firm competition is at play.  Institutions that formerly relied almost exclusively on outside law firms have been building up in-house legal staffs to address their business’ legal requirements (see video here).  In this revolutionized legal services landscape law firms no longer control the legal markets, clients do.

To adjust many firms will try to hustle more, hire more lateral attorneys or otherwise grow, or seek out improved efficiencies. Unfortunately, many of these strategies will fail to make a lasting difference.

While working harder and smarter is never a bad thing, as a response to the revolution it is inadequate.  In far too many instances, firms try to solve today’s problems with yesterday’s solutions and fail.  They miss finding a transformative answer.

There is great value in an enterprise orientation.  Clients with in-house departments already have it-law firms would be wise to follow.

To thrive in today’s world where clients look beyond law firms for their legal needs, a more thoughtful response is needed.  Five important thoughts law firms should consider:

Value is not only about Money.  High quality legal service is the expectation.  Beyond that, the value of legal services to a client is not just measured by the size of a bill.  Creating savings through reduced rates, fixed fees and detailed budgets, while valuable, is just one factor in achieving client satisfaction.

Clients that build in-house legal departments do so for more than monetary reasons.  In-house resources provide timely services that are enterprise focused and further the business’ mission.  A law firm that is not enterprise focused in a client centric way will not compete well with the client’s in-house lawyers.  There is great value in an enterprise orientation.  Clients with in-house departments already have it-law firms would be wise to follow.

Understand Your Clients(s).  In-house lawyers treat their company counterparts as their clients.  They seek to understand the business needs of their “clients” so that the overall purpose of the business is advanced and their client contact achieves unit and career objectives.  Done well, the “client” will serve as a good internal reference.

A law firm lawyer that thinks that client satisfaction ends at the legal department door misses the opportunity to truly serve his client, the company.  An outside lawyer must understand that he or she has two clients, the legal and business departments.  Law firms must enhance client satisfaction for both clients or they will not compare favorably.

Nurture and Invest in the Relationship.  Nurturing and investing in your client relationship requires an investment of time that goes beyond doing good legal work or entertaining.  It demands a commitment to understanding the needs and objectives of both the legal department and the business department.  Investing time and research into understanding the client’s business is an absolute necessity and will lead to greater attorney effectiveness.

The investment may not generate fees on every occasion, but in the long run the outside attorney’ indispensability to the client’s success will position the law firm for matters of significance that require outside counsel.

The Potential for Success is Measured by Touches.  An attorney that understands the client’s business and has invested to nurture the relationship will become a frequent resource to client contacts that need help.  The more times a client calls the more it is telling you that you are integral to its success.

As calls come in (many handled without the meter turning on) client capital is created. In due time, trust becomes implicit and the likelihood that key pieces of outside legal work being directed your way improves.  The potential for success is not measured in billable hours but is measured in client contact on things that matter.

Reconstruct Your Financial Model for the Reconstructed World.  A law firm reorienting its approach to clients that have in-house staffs cannot count on its attorneys always filling their day with billable hours.  While investing in the client will detract from the level of billable hours a firm may generate, the attorneys are not working any less.

Their non-billable work is an investment in the future.  A reorientation of a firm’s business model to allow for client nurturing may be required.  Without it motivation for attorneys to make the required investment in the client will be lacking.  And without the investment, law firms may not compare well with in-house staffs.

Since the revolution of 2008 client behavior has changed.  Turning away from law firms is now a routine option.  If non-law firm competitors have fueled this revolution, shouldn’t your law firm think about learning from their lead?

Author – 

Andrew Jillson

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