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November 25, 2015

New survey reveals how clients define value

Just about everyone agrees that legal clients are demanding greater value these days.  But what exactly do clients mean by “value”?  As a senior executive from one AmLaw 200 firm summed it up in my research for the book Client Value and Law Firm Profitability:

The truth when it comes to value is that I’m not sure what our clients mean. It means different things to different people.

While there will always be individual differences between clients, it is useful to start by knowing what clients in general mean.  Altman Weil’s recently published 2015 Chief Legal Officer’s (CLO) survey provides significant insights into this issue based on answers from 258 CLOs.   (Full disclosure: Altman Weil is a strategic partner of LegalBizDev, but I’d write about these findings even if we weren’t.)

From the law firm point of view, I think the most interesting question was “Rate the value to your law department of the following things law firms can do to better understand your organization.”  Here are the results:

Rank

Item

Average value rating*

1

Conversations with you about pricing / budgets

7.7

2

Conversations with you about matter management efficiency

7.3

3

Conversations with you about project staffing

7.0

4

Legal issue spotting and preventative law strategies (at firm expense)

6.5

5

Post-matter reviews

6.2

6

Industry research and issue spotting (at firm expense)

5.9

7

Formal interviews to get your feedback

5.0

8

Law firm participation in industry groups and events

3.8

9

Formal survey program to get your feedback

3.6

10

Visits from law firm management

3.3

* On a scale from 0 (no value) to 10 (enormous value)

If you are involved in legal marketing, it would be interesting to rate the time and money that your firm devotes to each of these ten items.  In my experience, most marketing departments are investing heavily in exactly the wrong things:  numbers 8, 9 and 10 (the old marketing), instead of numbers 1, 2, and 3 (the new marketing). 

Four of the top five items are examples of legal project management.  As I noted in my recent article for Bloomberg BNA’s Corporate Counsel Weekly Why Law Firms Must Change their Marketing Priorities, a few firms are headed in the direction of putting more emphasis on LPM, but most have not yet adapted to the changing needs of the marketplace.

Another important question in this year’s survey asked: “Of the following [ten] service improvements and innovations, please select up to three that you would most like to see from your outside counsel.”  The top three, according to 258 CLOS, were:

  1. Greater cost reduction (selected by 50% of respondents)
  2. Improved budget forecasting (46%)
  3. More efficient project management (40%)

It is worth noting that this question has been asked for the last several years, and these have consistently finished as the top three.  Since LPM leads to #1 and #2, and is the very definition of #3, I like to sum up the results by saying that what clients want most these days is LPM, LPM, and more LPM.

How well are law firms doing in meeting this client needs?  Not very well.  When CLOs were asked “In your opinion, in the current legal market, how serious are law firms about changing their legal service delivery model to provide greater value to clients (as opposed to simply cutting costs)?”  On a scale from 0 to 10, the median rating (with half the firms above and half below) was 3.  These results were almost identical to last year’s, so despite all the press releases law firms are putting out trumpeting their successes in increasing value, clients have not been impressed by the results.

The complete survey includes a great deal of additional information on law departments, and can be downloaded for free.  Now that’s what I call value.

 

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