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4 posts from September 2006

September 27, 2006

How to turn legal clients into raving fans – Part 5 of 5

In previous posts, I’ve talked about how important it is for lawyers to become more responsive to client needs.  One way that firms in other businesses create this kind of culture is by assuring that every employee understands the value of each customer. 

In a 1990 Harvard Business Review article called “Zero defections:  Quality comes to services,” Frederick Reichheld and W. Earl Strasser (p. 7) cited the example of a Domino’s pizza owner who calculated that the average customer in his franchise would, over the course of a decade, buy $5000 worth of his product, including ultimate deep dish pies, classic hand tossed pies, crunchy thin crust pies, buffalo chicken kickers and amazin’ greens. 

In law firms, of course, the numbers are much much higher.  When I wrote about Gerry Riskin’s advice for “bulletproofing crown jewel clients,” I explained the assumptions he usedf to calculate their financial value, including that the client will switch to another firm after 10 years regardless of what you do, and that the average interest rate over the 10 years will be 4%. This lead to the conclusion that the net present value of a $250,000 client is actually $1,895,802.

For a simple way to communicate this, pick a client, look up last year’s revenues, multiply by 8, and tell everyone, over and over. Then watch service improve.

One of the best ways to create raving fans is to improve how complaints are handled.  In the Jones & Sasser article I described in Part 1 of this series, they noted that:  “Companies that excel in satisfying customers rank the ability to react when something goes wrong as one of the most important factors in satisfying customers.”

Client complaints offer enormous opportunities to law firms.  At a minimum, they offer insights into what clients really care about.  Even if a client walks out the door threatening to sue you, it teaches you something.  And if you can keep him from walking out the door you may have one of your most loyal clients ever.

However you do it, you need to focus on turning your clients into raving fans.  The Jones and Sasser article (p. 99) ended with this quote from Horst Schulze, president of the Ritz Carlton Hotel Company:

Unless you have 100% customer satisfaction – and I don’t mean that they are just satisfied, I mean that they are excited about what you are doing – you have to improve.  And if you have 100% customer satisfaction, you have to make sure that you listen just in case they change… so you can change with them.

Guide_cover_web_1 This material was adapted from my new book Legal Business Development:  A Step by Step Guide, which will be published September 25 and can be ordered now on my web page.

September 20, 2006

Shameless self-promotion for my new book

In the 72 items I've posted since I started this blog 16 months ago, I've tried to keep the self-promotion reasonably low key.

But this week is different because my new book just came out. So if you hate this sort of thing, feel free to stop reading, and come back next week.

For everybody else: If you care about new business, you owe it to yourself to order a copy of my book Legal Business Development: A Step by Step Guide. If you need convincing, download the Table of Contents from the Free Resources section of my web page, or just review these blurbs from the first few pages of the book:

The business development steps outlined in this book really do work, resulting in a number of new engagements at our firm. The checklists and simple, specific tips helped our lawyers to quickly find the best ways to strengthen relationships with each client. They embraced the process, and appreciated the individual coaching, and, most of all, they loved the new business.” – René Kraus, Director of Marketing and Business Development, Patent Group, Fish & Richardson

“These days, it is an absolute business imperative for lawyers to take a serious look at sales and service. Law firms that do will uncover incredible opportunities. The ones who don’t may not survive. This book helps busy lawyers develop skills that fit their individual needs. It belongs in every business development library, and will be a valuable reference for every rainmaker—and everyone who wants to be one.” – Catherine Alman MacDonagh, Director of Business Development, Day, Berry & Howard and Co-Founder and Director, Legal Sales and Service Organization

“This book is grounded in practical tools and suggested actions at the perfect level for busy lawyers. Unlike so much of law firm sales literature, Legal Business Development: A Step by Step Guide avoids overloading lawyers with opaque sales theory, instead providing them action steps they can put to work right away…. The advice in this book sounds a lot like what I tell lawyers at Womble Carlyle every day of the week.” – Steve Bell, National Director of Sales, Womble Carlyle

“The number one question that lawyers ask me about business development is ‘How do I get started?’ This is the first book I’ve found that provides an answer, with practical, achievable steps that every lawyer can fit into their schedules.” – Allison Nussbaum, Manager of Business Development, Goodwin Procter

Practical and effective ideas based on proven principles that work!” – David Milberg, Director of Marketing & Communication, Schiff Hardin

“The business development techniques described in this book are useful not just for large firms, but for lawyers with any size practice.” – John Zenir, Esq., sole practitioner

You can order your copy on my web page www.legalbizdev.com. There is no risk, because the book comes with an unconditional money back guarantee: If for any reason you are not completely satisfied with any book purchased from LegalBizDev, simply return it within 30 days for a full refund, no questions asked. The cost is $49.95. If you order now, that price includes free shipping by priority mail. (Why does this make me feel like I should throw in a free set of steak knives?)

And here’s another thing: On Tuesday October 3, I will be participating in a Law Journal Newsletter web audio panel entitled “Integrating and Maximizing Business Development Training: Following up on what you learned.” The online description sounded so good that I myself wanted to sign up, just to hear the other panelists: Rene Kraus, Director of Marketing and Business Development, Patent Group, Fish & Richardson and Deb Cochran, Marketing Manager, Winthrop & Weinstine.

Next week, I promise to go back to more subtle self-promotion, by providing information you can use immediately: the fifth and final part of my series on how to turn legal clients into raving fans.

September 13, 2006

What legal offshoring means to you

Did you see this issue’s Business Week article “Let’s offshore the lawyers?” (9/18/06, p. 42) If the headline about sending legal research to Asia does not get your attention, consider their argument that “few industries seem more ripe for radical restructuring than legal services.”

The timing of the article was great for me. I read it on a flight to Washington to speak at several large law firms, and it provided me with another source to quote for my central argument: in a world that is changing rapidly, every lawyer would be prudent to put more effort into strengthening relationships with top clients.

The article provided details of DuPont’s hiring of 30 Filipino lawyers and 50 staff to digitize, index, and analyze documents from a number of cases. In fairness, the article reserved room for skepticism, and ended with a quote from DuPont in-house counsel that “the proof will be in the pudding.”

I believe that however this particular example turns out, it is inevitable that some percentage of US legal work will go offshore. The only question is what percent. Business Week quotes an estimate from consulting firm Hildebrandt International that US firms “can save 25% to 35% by farming legal work to Asia.”

In previous posts, I’ve discussed the DuPont model for reducing legal costs. This article notes that “DuPont’s legal department has been a pioneer in cost-cutting since the early 1990s, saving more than $100 million over that time through automation, outsourcing, and reducing the number of outside law firms it uses.” That’s great for DuPont, but one wonders how their law firms felt about losing over $100 million in revenue. At least they got an early taste of the wave of the future, as pressure continues to mount to increase value and reduce cost.

Of all the attention grabbing quotes in this article, the one that really caught my eye was the gratuitous swipe at lawyers in the opening paragraph: “Mention offshore outsourcing and Americans fume. But who would cry if we outsourced the work of lawyers, with their fat fees and endless strategies for adding years to litigation?” I am reminded again of the Inside Counsel survey I quoted a few weeks ago. When 42% of inside counsel say that “law firms pad their bills,” you know that something is broken and needs to be fixed.

So what would radical restructuring mean to you? A psychologist would predict that you’re not worried. It’s human nature to assume that the hurricane will never hit your house, and that you might even win the lottery.

But the reality is that there will be winners and losers in the next few years. One way to increase your chances of winning is to master the techniques used by other businesses to develop and protect relationships. More on that on Sept 27 in the fifth and final part of my series on How to turn legal clients into raving fans. Next week, the official announcement of my new book.

September 06, 2006

How to turn legal clients into raving fans – Part 4 of 5

As the market for legal services becomes more competitive, firms are increasingly applying knowledge from other businesses to create what management guru Ken Blanchard calls “raving fans.”

The book Raving Fans has sold over a million copies, based on the message “Satisfied customers just aren’t enough.” It describes a process built on three simple rules:
1. Decide what you want – Start with a vision of the perfect client relationship, because you can’t be all things to all people.
2. Discover what the customer wants – Then listen to customers and adapt your vision so that you “work within the customer window.”
3. Deliver plus one percent. – The key word here is “deliver” – one must always provide just what was promised, with no exceptions. Before you worry about exceeding expectations in some cases, you must make sure that you meet expectations every single time. The extra one percent is designed to encourage continuous improvement, in small and manageable steps. If you improve just one percent per week, at the end of a year you will be more than 50% better.

A number of experts have offered lists of how law firms should do this. Obviously, it starts by identifying what is most critical to your clients

Last January, I wrote about a speech by Paul Clifford, formerly the managing partner at Gadsby Hannah and now a principal at Law Practice Consultants, on Law Firms in the 21st Century. He said that to succeed in today’s challenging environment lawyers must provide:

Availability and accessibility
Speed, execution and responsiveness
In depth expertise
A team approach, in which clients have access to more than just the relationship partner
Understanding the client’s business

In a a presentation on “Creating a Sales Culture in Law Firms” at the Legal Marketing Association’s national conference in 2004, Mark Beese and David Freeman quoted a list from Brewer research of the top ten things clients look for in their firms:

Client service
Returns phone calls promptly
Delivers technically superior work
Understands my business and industry
Assigns appropriate staffing level
Keeps me posted on work in progress
Charges reasonable fees
Is innovative in solving my problems
Is aggressive in solving my legal problems

In a large firm, management must create systems which encourage these behaviors, and establish systems to measure performance and quickly intervene when things slip, as they inevitably will. The notion that the client is always right must become part of the firm’s culture.  For advice on how, see the final part of this series next week.

This material was adapted from my new book Legal Business Development: A Step by Step Guide, which will be published September 25, and which can be ordered now on my web page.