7 posts categorized "Legal Business Development"

July 12, 2017

Legal project management and business development (Part 2 of 2)

By Jim Hassett and Jonathan Groner

Stuart J.T. Dodds is director of global pricing and LPM at Baker McKenzie, one of the largest law firms in the world, with over 4,500 lawyers and 77 offices in 47 countries.  Dodds is widely recognized as a leader in linking LPM to business development, and he is the author of two related books published by the American Bar Association:  Smarter Pricing, Smarter Profit, and Pricing on the Front Line.

In a recent interview, Dodds noted that

In RFPs lately, we have seen very specific questions such as, ‘Do you have project managers who have certification? How and where have they supported client matters? Can you give us case studies for how you would deliver LPM concepts in a specific commercial situation?’ This gives the client a good basis to compare one firm with another. It’s more than the words on the page. It’s what the firm actually does. I think this is a very healthy development.

In fact, Dodds says, members of the senior project manager team that he heads (including over 40 project managers) typically become directly involved in the pitching process and interact with prospective clients as part of the business development team. 

This is how we tell the client that we will engage with them, if we are selected. We will take these nonlegal professionals into the client discussions in order to achieve the best result for the client.

When the firm begins work on a large client matter, a project manager is assigned to work alongside the attorneys. For smaller matters, the firm relies on a training program that it developed and executed in-house, in which all of its attorneys have been trained in project management to a high enough level that they can handle the basics of budgeting and planning, with occasional assistance from a project manager. As Dodds says, in those instances the use of LPM is “attorney-driven but expert-supported.”

Interestingly, as director of global pricing and LPM, Dodds reports to the firm’s Chief Marketing Officer. His 40 project managers are an integral part of the global firm’s nearly 400-person-strong marketing staff.

We see ourselves as part of the value proposition for our clients. We are not a cost to the firm. Rather, we contribute to the profitability of the firm.

This type of integration with the marketing department is currently unusual, but may reflect a growing trend.  In 2015, we published an article related to this topic in Bloomberg BNA’s Corporate Counsel Weekly™ entitled “Why Law Firms Must Change Their Marketing Priorities.”

The article started with an account of how Kramer Levin, a firm with over 350 lawyers in New York, Silicon Valley, and Paris, hired Jennifer Manton as its Chief Marketing Officer in 2014 in part because of her experience in using LPM to meet client demands for improved communication and efficiency.  One of the first things she did after starting at the firm was to arrange for seven lawyers to complete LegalBizDev’s one-to-one LPM coaching.  This pilot program led to increased confidence and ability to provide better price estimates, client communications and more.  Since then, Kramer Levin has gradually expanded this program with more coaching and other LPM initiatives.

However, our Bloomberg article also noted that

One of the many interesting things about this story is that Manton is a former president of the international Legal Marketing Association (LMA), which in the past reflected the nature of the profession by being associated with a more traditional approach to marketing. Marketing is often defined by the ‘Four Ps’: price, product, promotion, and place. Historically, law firm marketing departments have been involved almost exclusively in promotion. In today’s economic environment, that is a recipe for disaster.

It would be nice to report that since that article was published the approach of legal marketers has changed rapidly, but the phrase “rapid change” is rarely found in articles about law firms.

In fairness, LMA has recognized the importance of these issues by organizing an annual “P3 conference” (focusing on the “three Ps” of pricing, project management and process improvement, all of which are included in our definition of LPM).  However, to see how little integration has occurred to date between marketing and LPM, one need look no further than the titles of the speakers at this conference.  Of the 69 speakers at the most recent P3 conference, only 10% had titles that included words like marketing, business development or sales.

Nobody has ever said that implementing LPM will be fast or easy.  But the firms that are effective today in changing lawyers’ behavior, delivering more value, and meeting client needs will be tomorrow’s leaders in business development.

 

June 28, 2017

Legal project management and business development (Part 1 of 2)

By Jim Hassett and Jonathan Groner

The best way to develop new business is to give clients what they want.  And the data on what legal clients want is crystal clear.  In its most recent Chief Legal Officers Survey, Altman Weil asked the question “What would you most like to see from outside counsel?”  The top three answers were greater cost reduction (53%), improved budget forecasting (43%), and non-hourly based pricing structures (36%). 

All three are related to legal project management, so you could say that the top three things legal clients want these days are LPM, LPM, and more LPM.  The answers to this question in the Chief Legal Officers Survey have been supporting this same conclusion for years.

To put it another way, current clients and new ones are choosing law firms at least in part because of the firms’ ability to deliver value to them by increasing efficiency.   LPM professionals are extremely aware of these client needs and have become increasingly involved in marketing and business development.

For example, at Lathrop Gage, a firm with 300 lawyers in ten offices from Los Angeles to Boston, Dave Clark was recently named the firm’s full time LPM Partner.  Before taking on this role, Dave was a practicing IP litigator for over 30 years. He has completed LegalBizDev’s Certified Legal Project Manager® program, and he is now collaborating with a team of analysts and managers to help the firm’s attorneys increase client satisfaction while maintaining profitability.

In terms of the implications for business development, Clark notes that:

Three to five years ago, you hardly ever heard clients referring to LPM. Now, it’s the rule rather than the exception for most clients of any size. Most of the RFPs that we respond to these days have questions about LPM including budgeting, forecasting, or efficiency.  Clients want to know that the firm will work efficiently and bring better cost predictability to bear.

He went on to explain that:

LPM is becoming a marketing differentiator for our firm. It’s not a fad, it’s here to stay, and LPM is definitely needed for business development. Without it, a firm won’t have much of a chance getting or keeping significant work for clients.

Clark’s conclusions are quite consistent with those of the majority of AmLaw200 managing partners, chairs, and others we interviewed for the book Client Value and Law Firm Profitability.  Here are typical comments from three of the firm leaders in our survey: 

The way law firms deliver legal services to clients is undergoing a huge revolution. It’s going to change before our eyes in the course of a very short period of time. And it’s all being driven by clients who want to get value for their money.

I don’t know of any client that has not asked us to deliver more value, or… signaled to us pretty clearly what they’re expecting. Even as they are required in their markets to deliver more with less, the message is that… lawyers must do the same.

The competition to retain great clients and to get new great clients… has increased nine-fold. It goes back to the basic economics of supply and demand. There are more very, very good law firms chasing the best legal work. And if you have a legal budget of X millions, you have your pick of who to use.

At Ballard Spahr, a national firm with over 500 lawyers, Melissa Prince is the Director of Pricing and LPM, and another alumna of our Certified Legal Project Manager® program.  Whenever an RFP comes in to Ballard Spahr, Melissa or a project manager in her department participate in the initial phone call that is run by the business development manager who is coordinating the RFP response.

“They look to us for input from a pricing, legal project management, technology and client value perspective. We work well with Business Development and Marketing, and our Chief Marketing Officer is one of our biggest advocates and supporters.  She understands that what our team is doing in many cases sets us apart from our competitors. She advocates to our partners that have a seat at the table when we are selected for the final rounds of RFP meetings, and we have received very favorable responses from our clients,” says Prince.

Like Clark, Prince was formerly a practicing lawyer.  She oversees a pricing and legal project management team that focuses on a variety of aspects of LPM within Ballard Spahr, including pricing, process improvement and practice innovation to help lawyers come up with more efficient ways of practicing law. She reports to the firm’s managing partner of finance and operations and to the firm’s executive director.

“Our partners have been amazingly responsive to our team, which has been in large part driven by the support that the firm's senior management, departmental leadership and Board has given us,” says Prince. “They understand that the legal marketplace is changing and the firm needs to be willing to change with it.  It's really exciting to see, and there is a strong feeling at the firm that we are in this together for the benefit of our clients.”

As issues of project management and efficiency have come to the fore in major corporations, a new type of corporate position, that of Director of Legal Operations, has emerged – and that too has had an impact on the way in which clients select their attorneys.

Writing in 2015 in Bloomberg Law’s Big Law Business, reporter Susan Hansen noted that the position of Director of Legal Operations, which often focuses on process improvement and efficiency in getting legal work done for a company, started in Silicon Valley and has spread quickly in corporate America.  

Now, not only are an increasing number of corporate law departments hiring operations pros, but the role they play -- in managing outside vendors and contracts, and in implementing new technology and otherwise driving efficiencies and containing costs -- has continued to expand . . .  And legal industry insiders predict that the demand for savvy operations specialists will only grow.

Ballard Spahr’s Prince is well aware of this trend, in which professionals in corporate legal departments have a great deal to say about efficiency and about the selection of outside counsel on that basis:

I have seen growing demand for efficiency from the client side, primarily from these directors of legal operations.  This year, I attended the CLOC (Corporate Legal Operations Consortium) conference, because this is where my contemporaries in the corporate world were.   We were recently selected as one of only three firms in a large company’s preferred legal network, and the director of legal operations played a huge role in the RFP and outside counsel selection process.  She understood that selecting firms that were committed to non-hourly fee arrangements and disciplined project management and process improvement was just as important as the quality of the legal work involved.

 To be continued in Part 2....

June 14, 2017

New research on how to improve legal efficiency, and much more

According to Altman Weil’s recently released 2017 Law Firms in Transition (LFiT) survey the top two trends that are transforming the legal profession are “More price competition” (95% of the 386 managing partners and chairs who participated in the survey said this is a permanent change) and “Focus on improved efficiency” (94% said this is permanent).

So what are law firms doing about these fundamental changes in the marketplace?  Not nearly enough. 

When the LFiT survey asked “Has your firm significantly changed its strategic approach to the efficiency of legal service delivery?” only 49% said yes.  (20% said it was “under consideration,” and the remaining 31% replied with a flat no.)  These proportions have been surprisingly steady for the five years that Altman Weil has been asking this question.  It seems that about 20% of firms have been considering change since 2013, but they still haven’t done anything about it.  

Could the slow rate of change reflect the fact that clients don’t really care about efficiency?

No, that’s not it. In Altman Weil’s most recent Chief Legal Officer survey, the number one service innovation that clients wanted was “greater cost reduction.”  There are only two ways to meet this fundamental requirement:  become more efficient, or cut into your prices and profits with discounts.  (These days, most firms seem to be choosing deep discounts, sometimes to the point of what consultant Bruce MacEwen has called suicide pricing.”) 

Could the failure to act reflect a belief that the pace of change will slow down, or that it doesn’t matter? 

No, that’s not it either.  In fact, 72% of the LFiT respondents believe that the pace of change in the legal profession will increase (p. 2).  The fact that more than half of all law firm partners are “not sufficiently busy” (p. 36) also suggests that the forces of supply and demand will continue to put downward pressure on prices. And in our research for the book Client Value and Law Firm Profitability, 85% of AmLaw 200 leaders said that firms will have a competitive advantage if they change more quickly.

When LFiT respondents were asked “how serious are law firms about changing their legal service delivery model to provide greater value to clients?” the median rating was just 5 on a scale from 0 to 10 (p. 11).  If that’s not bad enough, clients think it’s even worse.  When clients were asked the same question in the Chief Legal Officers Survey, their median rating was a distressing 3 out of 10 (p. 23).

When directly asked “Why isn’t your firm doing more to change the way it delivers legal services?” the number one answer was “partners resist most change efforts” (65%, see p. 14).

Summing it up: Clients want lower prices; more than 9 out of 10 law firm leaders believe there is a need to become more efficient; but less than half of law firms are doing anything about it.  These results may be alarming, but for grizzled law firm veterans, they are not really surprising. 

As Eric Seeger and Tom Clay, the authors of the LFiT, noted on the first page of their report (p. i) “Law firms are slowly changing [but]… we see firms making only cursory investments where they should be aiming for broader, deeper transformation.  And still many partners resist change in all its forms.”

But wait, the slow pace of change is not the only problem.  It gets worse.  When law firms do try to change, they often employ the wrong tactics. 

This year, for the first time, Altman Weil listed eight of the most common tactics to increase efficiency, and they asked which ones each firm was pursuing. More importantly, they asked which tactics “have resulted in a significant improvement in firm performance?”  The graph below (adapted from p. 57) summarizes their findings:

LFiT_Graphic_DSJ2

Note that the two tactics that firms are using most often (knowledge management and using technology tools to replace human resources) are among the least likely to actually improve performance. And the two that have had the greatest impact (shifting work to contract lawyers and to paraprofessionals) are among those least used.  Clearly firms should reconsider their priorities.

If you study the graph above closely, you may also notice another fact that supports an argument we’ve been making for years:  project management training finished dead last in effectiveness.  In 2010, many firms first became aware of LPM when one AmLaw 100 firm got a lot of headlines by training every partner in their firm.  Lawyers love precedent, so that led to a fad of LPM training.  As explained in a post in this blog we here at LegalBizDev refused to participate in this fad, and declined to bid on RFPs that took this approach.  We knew from our two decades in the training business that it would simply not work.  As noted, in our recent posts on the “Top five ways to increase LPM results:   

It is not exactly news that education does not necessarily lead to behavior change. Taking a workshop about how to lead a healthier life by exercising regularly, losing weight, and eating more vegetables does not mean that you will actually do any of these things.

That’s why for years we have recommended that firms start with one-to-one coaching to solve problems that lawyers care about and to produce behavior change and quick wins.  These tactics have been proven to overcome the partner resistance which is slowing so many firms.

While this post focuses on efficiency data, that’s just the tip of the iceberg of the 124 page, free 2017 LFiT report.  The report provides a gold mine of additional data on the key topics that law firms need to focus on to prosper in the current climate, including profitability, staffing, and growth.

Many of these findings should affect your strategy.  To cite just one example, the tactic that law firms rely on most to improve pricing – developing data on the cost of services sold – is also the least likely to improve firm performance (p. 62).  The tactic that is most likely to improve performance is also the one used least often:  adding a pricing director or assigning pricing responsibilities to a current staff member.

As Seeger and Clay summed it up (p. iv): 

Firms that pursue thoughtful efficiency initiatives and stick with them will improve internal performance and add value for clients.  Firms that do not will experience competitive disadvantage over time.  It can cost very little to test-run pilot programs in these areas, and we believe it is an investment worth making.

 

A free copy of the 2017 LFiT can be downloaded from the Altman Weil website

Full disclosure:  LegalBizDev is a strategic partner of Altman Weil, and we specialize in the very types of pilot programs they recommend.

 

May 17, 2017

The top five ways to increase LPM results (Part 1 of 2)

by Jim Hassett and Tim Batdorf

In the last few years, many legal clients have been demanding greater efficiency and more predictable budgets. Law firms have responded by investing in legal project management (LPM) to increase client satisfaction and profitability.  They have tried a variety of approaches to this evolving specialty, including LPM coaching, training, hiring LPM staff, and purchasing new software.  Some of these initiatives have been quite effective in changing lawyers’ behavior, and some have not.

This two part series provides a high level summary of the five most effective ways to increase LPM results:

1.  Focus on changing behavior and solving problems

In 2011, when the LPM movement was just getting started, the Association of Corporate Counsel and the American Bar Association published an account of a meeting “at which leaders of corporate and law firm litigation departments rolled up their sleeves and tackled the complex issues surrounding present day concepts of value in litigation.” After the meeting, the authors of a follow-up report emphasized that future progress will not be based on improved understanding or increased knowledge. Instead, “The challenge is change/behavior management.” It’s not a question of knowing what to do; it’s a question of actually doing it.

At about the same time, many firms started implementing LPM by launching large-scale education programs. Lawyers love precedent, so when one AmLaw 100 firm announced that it had trained all of its partners in LPM, a number of others jumped in to do the same thing.  These training programs enabled firms to “check the LPM box,” write RFP responses praising their own LPM efforts, and put out press releases. What they did not accomplish, however, was to get many lawyers to change the way they practice law.

As the chair of one AmLaw 200 firm that invested heavily in LPM training put it in our survey Client Value and Law Firm Profitability

Every shareholder and top level associate [in our firm] has had a full day of project management training. I’d like to tell you that they use it, but they don’t.(p. 193)

LPM requires partners to change the very way they practice law.  And as the managing partner of another AmLaw 200 firm in our survey put it:

Project management is not natural to lawyers. We’ve always been trained to get the case done well to win, but now we also have to get the case done efficiently, and that is not part of the natural toolkit for most people. (p. 191)

It is not exactly news that education does not necessarily lead to behavior change. Taking a workshop about how to lead a healthier life by exercising regularly, losing weight, and eating more vegetables does not mean that you will actually do any of these things.

The key to getting started in changing behavior throughout an organization is to help lawyers solve the problems they face, such as living within a fixed fee budget or increasing realization.  And the best way to do that is to first identify lawyers who are motivated to change, and then to coach them one-on-one to create quick wins.

2.  Aim for quick wins to create internal champions

Lawyers are most likely to change their behavior if they are provided with convincing evidence that it is in their own self-interest. If respected colleagues say that LPM helped to make a fixed fee deal more profitable, or to avoid a write-down with a difficult client, they will listen.

As ALM Legal Intelligence noted in a survey entitled Legal Project Management: Much Promise, Many Hurdles (ALM Legal Intelligence, 2012, p. 17), “The quicker there are demonstrable positive benefits, the faster other partners will take notice.” (p. 17)

The value of quick wins in changing behavior has also been shown in many other professions.

A few years ago, John Kotter published a Harvard Business School Review article entitled “Leading Change:  Why Transformation Efforts Fail,” summarizing a ten-year study of more than 100 companies.  Most of their change efforts had failed, and Kotter outlined eight phases that were necessary for success:  generating a sense of urgency; establishing a powerful guiding coalition; developing a vision; communicating the vision clearly and often; removing obstacles; planning for and creating short-term wins; avoiding premature declarations of victory; and embedding changes in the corporate culture.

Kotter, who is now a Professor Emeritus at Harvard Business School, went on to refine these ideas in a number of publications, including the book Leading Change, which TIME magazine listed as one of the "Top 25 Most Influential Business Management Books" of all time.  According to Kotter (p. 123), short-term wins:   

  • “Provide evidence that sacrifices are worth it
  • Reward change agents with a pat on the back
  • Help fine-tune vision and strategies
  • Undermine cynics and self-serving resisters
  • Build momentum”

When LegalBizDev coaches lawyers in LPM, we look for the low hanging fruit that makes it easiest to generate short-term wins such as better budget control, improved client communication, or negotiating changes of scope.

In more than three decades in the training business, LegalBizDev has found that the single most important factor in success is selecting the right people to be trained. This is particularly critical in an area like LPM, where there is resistance and skepticism about changing behavior.

We recommend starting with lawyers who are open to new ideas and who have the most to gain. That could be the key partners who are responsible for new alternative fee arrangements. It could be relationship partners who are worried about protecting business with key clients that are looking for greater efficiency and increased value from their outside counsel. It could be an entire practice group that is considering new checklists, templates, and processes to improve its competitive position. 

Experience has shown that our training pays for itself several times over by enhancing client relationships and profitability. That success creates a new group of champions within the firm who will spread the word that legal project management can help serve clients better.

The exact individuals and groups will vary from firm to firm. But in every case, the best lawyers to begin focusing on LPM are those who are (i) open-minded about change and efficiency, (ii) in a position to benefit when LPM makes a difference, and (iii) influential enough to credibly spread the word of their success.

To be continued in Part 2.....

 

March 22, 2017

Lessons learned reviews – Part 2 of 2

By Jim Hassett and Gary Richards

After action reviews

According to the ACC Value Challenge Briefing Package, law firms should “Conduct after action reviews at the end of each matter to help continuously improve performance” (p. 8).

The concepts are basically the same as the questions discussed above, but the details of the process and the term “after action review” originated in the US Army. This approach is organized around four key questions:

  • What was supposed to happen?
  • What actually happened?
  • What were the positive and negative factors?
  • What have we learned and how can we do better next time?

Jeff Carr has written and spoken extensively about how lawyers should adapt after action review concepts. (Jeff has worked with Valorem Law Group since retiring from his position as General Counsel at FMC Technologies in 2014.)

In an interview published on the ACC Value Challenge web page, he notes that:

It is important that the process focuses on continuous improvement as opposed to dwelling on the past. To do so, the team leader presents first and bases the comments on what they could have done better (as opposed to what other team members might have done differently). This helps avoid an accusatory and adversarial meeting that becomes a “blame game.”

One element of the approach is the “hot wash,” a simple brainstorming session that solicits comments at the end of a matter and classifies each under two columns: What went well, and Take a look at.

Ron Friedmann described in his blog how Carr used this approach in a conference several years ago at Georgetown Law School:

In a session lasting less than 10 minutes, Jeff led the audience in a review… He divided [a] flip chart vertically in two. On the left, he made a column for “What went well” and on the right for “Take a look at.” The idea is to get fast, brainstormed, uncensored audience comments on what worked well and what could be improved. He spent two minutes laying out simple ground rules (e.g., say what comes to mind, think of positives as well as negatives, as scribe he would write down whatever was said without judgment)… In just minutes Jeff filled several sheets with many helpful comments.

In a comment at the end of Friedmann’s blog post, Jeff Carr wrote:

The technique is called “The Hot Wash” and came from a brilliant podcast series known as Manager Tools. I highly recommend this podcast series to all managers—but especially to lawyers leading teams for, as we all know, most of us never had any training in project management, people management, or people development, upward management, shop floor management—or for that matter, playing nice in the sandbox.

We [also] do a more formal after action process as well at the conclusion of every legal matter. We call that L2A2 (“Lessons Learned/After Action”) where we examine procedural improvement (what could the team do better) and substantive improvement (how can the organization avoid similar problems, or continue to do what went well). The team leader always goes first and talks about what he/she could do better (not what others could do better). In theory and practice, this gives the group permission to focus on improvement as opposed to criticism of team members. It’s not about fame, not about shame, but rather how you play the game!

More questions to ask

The following list of questions was inspired by Jeff Carr’s ACES (Alliance Counsel Engagement System) Report Card, a system FMC Technologies developed to calculate performance fees awarded to outside counsel, based on their grades on six key factors:

  • Understands goals
  • Expertise
  • Efficiency
  • Responsiveness
  • Predictive accuracy
  • Effectiveness

If you plan a longer review, some or all of these questions could be adapted to your situation:

  • Would you ask us again to do this kind of work?
  • How likely is it that you would recommend that a colleague hire us?
  • How well did we understand and meet your legal objectives?
  • How well did we understand your business strategy and help you meet business objectives?
  • Did we provide practical real-world advice and solutions?
  • How would you describe our substantive legal knowledge and expertise?
  • Did we use the best team to meet your needs?
  • Were all deadlines met?
  • Did we handle changes in your needs promptly and effectively?
  • Were team members available when you needed them?
  • Did we proactively take the lead when needed?
  • How well did we communicate?
  • Did we do a good job of explaining risks?
  • Did we keep you informed and avoid surprises?
  • Did we manage fees and expenses well?
  • Were our original budgets and estimates as accurate as possible?
  • Was the total project cost fair and appropriate?
  • How could we do a better job of delivering value?
  • Did our work meet or exceed your expectations?
  • How would you rate our overall performance?

Internal review meetings

In addition to your lessons learned discussion with clients, it can also be helpful to have a meeting strictly of your internal team to increase team efficiency and morale. For firms that have a formal knowledge management system in place, meetings like this can be especially helpful in capturing insights and experiences that can be of great value to the firm in the future.

Obviously, some of the questions you ask in an internal meeting will be different from those you would ask a client. In the book, Implementing Value Pricing, Ron Baker provided a long list of questions for such meetings (p. 317), including:

  • What could we do better next time?
  • Did we add value for this customer?
  • Did we have the right team on this engagement?
  • Did this engagement enhance our relationship with this customer?
  • What other needs does this customer have and are we addressing them?
  • Did we learn any new intellectual capital that we could leverage across other customers?
  • Should we communicate the lessons on this engagement to our colleagues and how?

The last two questions can yield important knowledge management results, including exhibit formats, checklists, briefs, innovative arguments, and more. And, as noted on the web page Knowledge Management Online:

Effective knowledge management should dramatically reduce costs. Most individuals, teams and organizations are today continually “reinventing the wheel.” This is often because they simply do not know… what is already known, or they do not know where to access the knowledge. Continually reinventing the wheel is… a costly and inefficient activity.… Knowledge management… should also dramatically increase our speed of response as a direct result of better knowledge access and application.

A final thought

Given the potential benefits of a lessons learned discussion at the end of every important matter and at critical junctures in large matters, why would anyone ever skip this step?

Because you are already too busy on the next matter? Because you hate to put time into non-billable activity? Because you feel awkward about discussions like this?

In the long run, these are terrible answers. As the legal profession becomes ever more competitive, lawyers who fail to find time to understand what clients want and need today may find themselves with a whole lot of free time tomorrow.

This post was adapted from LegalBizDev’s new LPM Tools and Templates.

March 15, 2017

Lessons learned reviews – Part 1 of 2

By Jim Hassett and Gary Richards

Some lawyers hold meetings at the end of every significant matter to review what worked, what didn’t, and what could be done better the next time. In large matters, they also conduct these “lessons learned” reviews after completing each significant milestone or phase.

These discussions are a learning opportunity and a marketing opportunity. Such a discussion can enhance your relationship, help you learn more about what an existing client values most, and enable you to provide more value. If a large matter is at a pivotal point, a mid-course review and redirection could be the difference between success and failure. Could you possibly think of a better way to develop new business?

The lessons learned review could be long or short. You could hold a formal group meeting and send the questions in advance, or you can simply ask your client some of the questions below. If you think of this as marketing, it will be obvious that it is better to have the discussion in person, maybe even over lunch. The phone can be a good second choice, but email is a distant third. You want to get people to open up and speak freely, and that is unlikely to happen via email.

The length and formality of the process should depend on the size and significance of the matter, your relationship with the client, and on how much work they are likely to have for you in the future. This section lists a number of different questions you might ask. In many cases, the first two will be enough.

The two most important questions

Unless there is a major open issue requiring an immediate joint review, or a client requests a lengthy discussion, we recommend that you assume that clients have little time to spare. This may mean limiting the debrief to two simple questions:

  1. What did you like about the way we handled this matter?
  2. What could we do better?

The first question is a classic “easy to answer” opening. Ask this one first, because it will get people talking freely.

The second question is the one you really care about, since you are likely to learn far more from criticism than from praise. No matter how much clients like your work, they can always like it more. And in today’s highly competitive environment, it is in your interest to turn every client into a raving fan.

If the second question opens the door to a laundry list of complaints, do not get defensive. Do not argue, disagree or explain your position. In fact, at most lessons learned meetings you should say very little and listen more than 90% of the time. Keep probing for more information. These meetings are designed not to understand reality, but rather to understand the client’s perception of reality. Because when it comes to client satisfaction and new business, perception is everything.

When clients raise problems, you need to reassure them that things will be better in the future. But in most cases you should not get into the details at the initial discussion. You need time to think about the best way to solve the problem, and to assure client satisfaction. So be prepared to say something like, “That is an important issue. Let me talk to a few people about the best way of preventing that from happening again, and then I will get back to you.”

Of course, if you do promise to get back to your client with a solution, you must put a high priority on completing follow-up as soon as possible.

If your time is limited, and your clients’ time is too, you can stop here. But if you want to consider more questions, read on.

Two more questions you could ask

If you have time to probe deeper, you can also add one or both of these optional questions:

  1. Working together, how can we improve the value you receive in the future on matters like this?
  2. On a scale from 1 to 10, how satisfied are you with our firm?

The first question is optional and focuses on the issue which is most likely to lead to new business: how to increase perceived value. This is a slight rephrasing of a key question suggested in the ACC Value Challenge Briefing Package (p. 7). Note the phrase “working together,” which stresses the need to align interests and collaborate more closely.

The second question is also optional. There are many ways to phrase effective questions about client satisfaction, but the best way is to ask for a numerical rating, because it forces clarity and frankness.

We ask our own clients this question at the end of every program we deliver, and to be honest, many shy away from giving a number. The client is always right, so if they don’t want to be pinned down with a number, we go with the flow. The important thing is to begin a genuine conversation about satisfaction, and to encourage clients to talk about the things you really need to hear, rather than more comfortable vague praise.

If clients do give you a number, there’s a good chance it will be lower than you expected. The reason is that most people overrate themselves. Psychologists call this the Lake Wobegon effect, named after Garrison Keillor’s fictional community in which “all the women are strong, all the men are good-looking, and all the children are above average.”

The best place to see this effect in the legal community is in a series of surveys published in Inside Counsel magazine comparing ratings of satisfaction from clients and the law firms who serve them. In one such survey, 43% of lawyers thought they were earning an A for their work, but only 17% of their clients agreed. So if you think you deserve an A, you’re probably wrong.

Another way to get at this fundamental issue is to ask, “On a scale from 1 to 10, how likely is it that you would recommend us to a friend or colleague?”

In his business bestseller, The Ultimate Question, Fred Reichheld argues that companies should focus more attention on loyalty by measuring the response to this one simple question. Reichheld and his colleagues at Bain have published several books and many studies showing that companies with high customer loyalty rates grow revenues twice as fast as their competitors. They have also shown that companies can increase profits by 25% to 100% simply by increasing customer retention by 5%.

Clients who rate the likelihood at 9 or 10 out of 10 are called “promoters” and are responsible for generating sustainable growth. You might think 7 or 8 on this 10-point scale would also be pretty good, but Reichheld has found that these people are motivated more by inertia than by enthusiasm. He calls this middle group “passives” and notes that they will often jump to another company at the first sign of a better deal.

The most serious business risk comes from “detractors,” people who rate the likelihood of referrals at 0 to 6 on that 10-point scale. From a strict financial view, many of these detractors may be profitable in the short term, but Reichheld notes that, “Customers who feel ignored or mistreated find ways to get even. They drive up service costs by reporting numerous problems. They demoralize frontline employees with their complaints and demands” (p. 6). 

Eighty percent of negative comments come from this detractor group, and in this age of email and internet ratings, a single complaint can reach hundreds of potential clients in the time it takes to hit the send button. In short, detractors “suck the life out of a firm” (p. 30).

This post was adapted from LegalBizDev’s new LPM Tools and Templates.

January 04, 2017

Tip of the month: Develop a defensive marketing plan for 2017

I’ve said it before and I’ll say it again: As legal competition continues to get tougher, it’s more important than ever to focus on protecting relationships with the clients you already have. What will you do in 2017 to protect your top client relationships? In the current competitive environment, no client can be taken for granted, no matter how long you have worked for them. If they are already happy with your service, what could you do to make them even happier? If you’re not sure, ask them. And then do it.

The first Wednesday of every month is devoted to a short and simple reminder like this to help lawyers increase efficiency, provide greater value to their clients, and/or develop new business.