Law firms in the 21st Century

The title sounded ambitious -- “Law Firms in the 21st Century” – but Paul Clifford’s talk at the New England Legal Marketing Association meeting on January 12 delivered everything I had hoped for, and more. Now one of the principals at Law Practice Consultants,
Paul has practiced law for 30 years, including 12 years as the managing partner at Gadsby Hannah. The talk included data, analysis, and opinions on everything from globalization to professional business practices. Naturally, I listened most intently to the sections on business development.

Many of the trends Paul discussed are driven by a single indisputable fact: “The market for legal services is becoming more and more competitive.” It’s a buyer’s market. As large clients continue to merge and industries continue to consolidate over the next few years, this will become even more true.

In the 1980’s, he noted, business development was strictly the province of a few rainmakers, and marketing budgets were typically less than 0.5% of revenues. Today, everyone is involved, from the person who answers the phone to the most senior partners, and budgets are typically in the 1% to 4% range.

Paul quoted so many great statistics that I found myself ranking them. Number 3 on my list of personal favorites was “to be competitive today, partners must work 2500 hours per year,” an average of 52 hours per week over 48 weeks. 1800 of those hours will generally be billable. The other 700 are “investment hours” divided into three groups: 300 hours for practice management (where that applies), 200 hours for client relationship management, and 200 hours for marketing/ business development. He also noted that 2500 hours is on the high side, and 2200 hours is not unusual.

In discussing what lawyers should do with the 4 hours per week they’re developing new business, he started with an old joke that defines a lawyer as someone who is either talking, or waiting to talk. I’ve written before about the importance of listening in large sales in every industry, and was pleased to hear Paul emphasize its special role in the law.

This led up to my number 2 favorite statistic from Paul’s talk: when clients are asked why they use a particular lawyer, 80% stress service and relationships. (The remaining 20% fall into two equal groups: expertise and price.)

This reinforces the idea, again often emphasized in this blog, that current clients are lawyers’ best source of new business. And with client loyalty eroding, it is important to create “super satisfied” clients not just to get more business, but to protect what you already have. As he put it: “Unhappy clients don’t complain – they just gradually stop giving you business.”

Which led to my number 1 favorite statistic from Paul’s talk: in a survey published last October, AmLaw 200 firms were asked: “How many of the firm’s 20 top-billing clients have you met with to discuss the client’s satisfaction with your firm’s performance?” Only 1% had met with all 20, and more than half had talked to 5 or less. 6% had not talked to a single client. When I wrote my recent three part series on “how to review client satisfaction,” I knew it was bad, but I didn’t know it was this bad.

Near the end of the business development section of his talk, Paul summarized what clients want, and what lawyers need to provide to succeed in this challenging market:
• Availability and accessibility
• Listening
• Speed, execution and responsiveness
• In depth expertise
• A team approach, in which customers have access to more than just the relationship partner
• Understanding the client’s business

As Paul summed it up: “The biggest challenge is to get lawyers away from thinking like lawyers, and to start thinking like business people.”