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August 20, 2008

How to improve relationships with large clients, Part 2 of 2

Last week’s post described Harris E. Berenson’s ideas on how to develop a new relationship.  After you get in the door, the focus should shift to maximizing and maintaining the relationship with open communication, realistic expectations, and a willingness to learn from each other.

Communication includes understanding the client’s business and their clients.  How are you supposed to do that?  It’s easy, just ask the right questions and work on your listening skills.

Communication is also based on transparency and keeping your clients fully informed.  Clients hate surprises, whether the surprise is in a bill or in the outcome of a particular matter.  If you are open and honest, and let clients know what is coming, they will respect your approach, even in cases where they might have preferred a different result.

Communication also implies that sometimes “you just need to reach out and touch someone and ask ‘How’s business?’”  Berenson recommends sticking to short meetings, phone calls, and emails.  Other clients may prefer to do this over lunch or dinner.  Each person is different, and part of a successful relationship involves learning personal preferences, and even quirks, to make each relationship work more smoothly.  You must understand the level of detail each in-house client prefers, whether it should come by fax, email or phone, and who should get copies.

Every matter should end with a post-mortem, to assess what both sides have learned, and discuss what could be done better the next time to increase mutual satisfaction.

This sounds like hard work, and it is.  But there is a huge reward for getting through the process:  security.  Once a relationship is working, Berenson is highly motivated to keep sending more work.  Switching to another firm simply takes too much time and effort, “like training a puppy which piece of furniture he can and cannot get on.” 

Berenson also noted that lawyers should aim to be perceived as “counselors”, by applying best practices in client service such as:

• being accessible
• responding promptly
• learning the client’s business
• empowering your clients
• communicating clearly and directly
• getting to know clients
• putting clients first
• reducing law firm costs

Ah yes, cost.   Given that Berenson gave his talk at the annual Raindance Conference of the Legal Sales and Service Organization, he focused on sales and service.  But money did creep into the talk more than once, and he did note that business relationships are ultimately “all about the dollars and cents.”

In that Altman Weil survey I mentioned at the beginning of Part 1, chief legal officers at large companies were asked to “Rank the importance of efforts that outside counsel may make to improve the working relationship with your law department.”  Here are their top six factors, in order of importance:

1. Discounted fees
2. Improved responsiveness
3. Improved project staffing
4. Learning our business
5. Billing clarity and predictability
6. Alternative fees

Note that numbers 1, 5, and 6 involve money, and number 3 may too.  These same chief legal officers were also asked:  “For the next three to five years, what is your greatest long-term (over the horizon) concern?”  The number one answer was cost control (28%), and number two was the closely related answer limited resources (14%).

Similarly, when Inside Counsel magazine asked general counsel to identify the most important thing law firms could do to improve relationships, the number one answer (46%) was “reducing costs.” 

Times are tough, and getting tougher.  As Harris E. Berenson put it:  “There are many hungry lawyers out there, trying to take your business.”  On the plus side, their job of getting in is much much harder than your job of staying in.  As long as you remember to maximize and maintain the relationship. 

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