Walker Clark Worldview

A partner from a law firm in a small legal market (under 500,000 people) in the United States asked me this question a few days ago.

The answer is really one of definition. While the term  “general practice” is relatively benign, claiming to be “full service” can be toxic for a small law firm.

Business clients, even in smaller communities, are rightfully skeptical of small firms (which, for purposes of this discussion, includes firms of up to 20 lawyers) that advertise  expertise or significant experience in dozens of practice specialties.  When probed, many of these claims are based on one case or one transaction that might have happened years ago.

Our firm works with smaller law firms, both in the United States and worldwide, to develop and execute marketing strategies that work in smaller legal markets.  Our experience and observations suggest three points that a small law firm should consider:

• Avoid the temptation to tout yourselves as a “full service law firm.” Not only does such a claim lack credibility among sophisticated business clients and high net-worth personal clients; it can also unnecessarily raise their skepticism among the things that you really do well. And no news travels faster in a small market than the experience of a client who has been disappointed by mediocre performance or poor client service.
• Focus on the client sectors in which you are already strong.  If some of your best clients are, for example, in the construction industry, be sure that you understand their businesses better than any of your competitors.
• Don’t be afraid to refer a client to a competitor for work that is outside your area of expertise. Of course, there is a risk that the competitor might “steal” you client. If that happens, it probably was likely to happen even without the referral. The much higher probability is that sending a client to another firm, when you cannot give the client the best possible service, will actually increase the loyalty of that client to your firm, as well as make the client more likely to refer you to others.

The risk to small law firms that try to do it all is that you usually end up doing nothing particularly well. This is a sure formula for invisibility in the competition for the types of potential clients that your firm needs the most.

Norman Clark

“Never ask a question to which you do not already know the answer.”

This is one of the cardinal rules of trial advocacy.

Unfortunately, this rule is foolish in law firm management.

My colleagues and I frequently hear statements such as these from otherwise intelligent lawyers and business managers:

• We can’t ask those questions of our associates or staff. That would only stir things up and make the situation worse.
• We can’t ask those questions of our clients. We must not raise their expectations.

One of the most important skills for leaders in law firms is to ask courageous that produce answers that the firm needs to succeed. Sometimes the answers are ones that we would rather not hear, but we must hear and heed them nonetheless. This is usually the only way to get the accurate and reliable information needed to make wise, fully-informed decisions.

Sometimes there is no act more courageous than asking a question.

Good leaders stir things up.

There are few, if any businesses, that are as heavily dependent on people as are law firms. People, along with their knowledge and skills, make up at least 90% of the assets of a law firm. The other stuff — some furniture, books, and perhaps a leasehold — are comparatively worth almost nothing, because without its people, a law firm has no real value at all.

Leaders of law firms need to know how junior fee earners and staff perceive the firm and its internal issues. Relying on hunches, group-think by partners (a favorite but usually worthless pastime at partner retreats), or “what it was like when I was an associate” are deadly problem-solving strategies.

To be sure, asking for opinions about sensitive issues might “stir things up;” but that is usually the only way to see and to understand the perceptions, misunderstandings, and grievances that sometimes lurk at the bottom.

And the best way to get to the bottom of an issue is simply to ask about it.

Good law firms want to raise client expectations.

Some law firms seem to have a phobia about client feedback. In some instances the refusal to ask clients for performance feedback is the result of a deep-seated condescension — or even contempt — about the client.

For example:

• “Why ask the clients? They really don’t know what they need. That’s why they hired us.”

In healthier law firms, however, I often hear this excuse for not soliciting client feedback:

• “We can’t ask anything that might raise the clients’ expectations.”

Raising client expectations is exactly what law firms should be doing in today’s highly competitive legal markets.

You should set standards of client care and service delivery that are above current levels demonstrated by your competitors. The best way to do this is to ask clients to describe what “quality” means to them. What indicators, such as responsiveness and understanding of the client’s business, are most important? Even if you believe that you are performing as well as you possibly can, ask the client how you can perform even better. You might be surprised by the answer. You might wonder why you are not already doing what the client suggests.

By asking these questions and responding to them in ways that the clients can observe and measure, your law firm can raise market expectations to levels at which few, if any, of your competitors will be able to perform right now. Some of your competitors will catch up to you eventually, but during that period when you alone are performing above market expectations, you will have an almost unchallenged opportunity to win new clients and new instructions from current clients.

Simple but sophisticated tools

The art of asking questions involves much more than asking questions.

Asking a junior staff member, “How do you like the firm?” is more likely to produce a cautious, positive response than meaningful data. Most staff members are not fools. Even the best-intentioned open-ended question often will look like a trap.

Asking a client, “How did you like our firm’s performance on that matter?”  will seldom produce the specific information that is the key to understanding a possible competitive advantage or disadvantage for your firm. Many clients have never articulated their key quality indictors. Sometimes you need to lead them there.

To produce worthwhile information, the questions need to probe specific issues and potential issues. The questions should be asked in a systematic and consistent way. This is why my colleagues and I recommend three tools above all others:

• Surveys – A well-designed survey can produce substantial volumes of data, compiled in a consistent manner, that can be very useful in understanding the seriousness and priority of an issue.  A survey is also an excellent tool for identifying potential obstacles to the implementation of a new strategy or a proposed solution to a difficult problem. Click here for more information.

• Interviews - We usually recommend that confidential interviews be used as a follow-up to a survey. However, confidential interviews can also provide detailed and sophisticated information that cannot be produced easily within the structural limits of a survey. Therefore the confidential interview is especially powerful to identify and understand opportunities or issues in relationships with major clients.

• Monitoring – Surveys and interviews are usually one-time activities.  They can produce useful baseline results, but cannot detect changes in opinions over time or in changing circumstances. For example, our firm’s Client Service Monitor is an outsourced service by which we assume responsibility for ongoing monitoring of client satisfaction and early detection of client service issues. This can help law firms to identify issues before they become crises and to minimize loss of clients due to dissatisfaction with the firm’s performance.

The important point is this:  regardless of which tools you use, a key tool in successful law firm management today is asking courageous questions. Ask them frequently. Ask them of your own colleagues and staff and of clients.  Ask them even when you do not know — or do not want to hear — the answer. To be sure, sometimes a courageous question might involve risk; but that risk is no greater than the underlying risk that already lurks, undetected and out of sight of your current knowledge and understanding.

Norman Clark

This is the final posting in a series about the characteristics of successful quality assurance programs in law firms.

How does one measure the success of a quality assurance program? When Walker Clark advises a law firm, we tell the partners to look for these indicators:

• Improved productivity by fee earners — because they can spend more time on billable work and less time fixing mistakes and responding to client complaints
• Higher collections realization rates — because the firm now manages the major reasons for fee write-downs and write-offs
• Higher levels of client satisfaction – because the firm meets or exceeds client expectations and gets things done right the first time
• Competitive advantage – because the firm can demonstrate quality, rather than just mumble slogans about it

As the previous parts of this series suggest, serious quality management is a challenge for most law firms.  People have to discard bad habits.  They have to sharpen their thinking about the routine work that they do every day.  In some instances, lawyers need to change some of their long-held, fundamental ideas about what constitutes quality in a legal service.

Quality management often involves a set of discrete journeys that a law firm must make…

• From considering errors and mistakes as failures to be hidden — to viewing them as data-rich opportunities to reduce or eliminate them in the future
• From assigning blame — to finding solutions
• From viewing quality in legal services as something that only a lawyer can define — to understanding quality in terms of the client’s needs, expectations, and perceptions

Each of these requires a profound cultural change for most law firms. It is a necessary change, as well; because law firms that are unable to manage serious cultural change are doomed to declining competitive performance and, eventually, irrelevance in the fast-changing, highly competitive legal markets of the 2010s.

The “quality assurance” culture also requires a seriousness of purpose and an ongoing commitment to the procedures and methods. Partners must be highly visible in their support for, and compliance, with the quality assurance program. They must reinforce among junior members of the firm that quality assurance is everyone’s job and is important to the business success of the firm.

Like most worthwhile investments, quality assurance sometimes is not easy, especially because of the cultural changes that it sometimes requires. But that effort produces profound and positive results that are:

• Long-term and sustainable
• Beneficial to almost every aspect of law firm operations
• Measurable in terms of dramatic improvements to profitability and financial performance.

Norman Clark

This is the fifth in a series of posts about the characteristics of successful quality assurance systems in law firms.

Previous posts outlined three important points that distinguish quality assurance from crisis-to-crisis after-the-fact improvisation:

1. Quality assurance is a firm-wide issue and everybody’s job.
2. The people who are best able to improve the work are the people who perform it everyday.
3. Quality assurance focuses first on stopping the pain — reducing or eliminating the problems that are weakening productivity and undermining profitability.

Today’s post points out a necessary element that is common to all three of these principles: data.

The accurate diagnosis of quality assurance problems and their causes requires accurate and timely data about the functioning of the processes that produce and deliver services to clients and internal customers.  What are the mistakes that are being made? What are the nature and causes of the rework needed to fix errors that we actually observe?  What are their practical results? Simple, but highly effective, reports such as missed deadlines, document errors, and service standards discrepancies, are critical.

The actual experiences of law firms with credible quality assurance systems have been quite consistent. Collecting data on the nature and causes of quality problems is not complicated, time-consuming, or burdensome. In legal service organizations in which I have actually measured the time required to complete and submit reports, the amount of time per fee earner has always averaged less than 10 minutes per day.  Over time this average investment of time usually decreases.

This is due to two reasons

1. People become more alert to problems and more efficient in reporting them.
2. As the firm collects this information, it begins to correct quality problems, thereby reducing the frequency and number of error reports.

Without this information, however, you are only guessing at quality, rather than managing it.

Norman Clark

This is the fourth of a series of posts about the compelling business case for quality assurance in law firms.

The third characteristic of successful quality assurance programs in law firms is that they focus on the greatest risks and attack the biggest quality problems.

We favor a practical approach.  The best methods do not seek to perfect each and ever task, function, and process in the firm.  Unlike methods such as ISO 9001, we do not recommend detailed documentation of each and every process.  However, we do recommend intense focus on the ones with the greatest risks. In law firms, most quality assurance issues can be isolated to one or two critical weaknesses. Our approach focuses on these “significant few” issues, rather than every possible one. In particular, we recommend that a firm start by improving the processes that are currently causing the greatest problems. Focus on problems that annoy the clients the most, such as missed deadlines, errors in documents, and untimely or inaccurate bills. In our experience, most of these problems can be mitigated substantially, and sometimes even solved entirely, with relatively simple, low-cost improvements.

Norman Clark

I had two interesting conversations at the International Bar Association conference in Madrid several months ago. They occurred within ten minutes of each other.

The first conversation was with a partner from a midsize law firm in the United Kingdom.  We were discussing the issue of client satisfaction, based on some comments that I had made as a panelist at one of the conference sessions that day.

“I don’t really see a need for client surveys and interviews and all that,” he said.  I have a pretty good idea of what my clients expect from me.  If there’s a problem, they will tell me.”

The second discussion was an in-house lawyer from a European bank.

“You would not believe it,”  she said.  ”Most of the law firms that work for us do not have the first idea of what is important to us; and they do not bother to find out.”

“If you are unhappy with them,” I responded, “why don’t you sack them?”

“That is what we are considering,” she said. “There are some firms that are going to be receiving an unpleasant shock at the end of the year.”

Neither of these comments are offered as being representative of the prevailing opinions in law firms and in-house law departments.  But they are typical of a substantial risk that many law firm partners overlook.

In today’s legal markets, what you don’t know can hurt you.  When someone boasts — and it usually is a boast — that they know what their clients need and expect, I always ask, “How do you know?” In most instances, my question is met with silence.

If you don’t know what is on your client’s mind today — as well as what is likely to be on the client’s mind tomorrow — there is one reliable way to find out:  Ask.

Some law firm partners will tell me, “We did a survey and it turns out that we already knew 80% or 90% of what the clients told us.”

This is usually true.  But it is that unknown 10% or 20% that can strike your firm like a cobra.  It is usually the unknown problem or the unspoken dissatisfaction that costs law firms even their oldest and best clients.  You may also discover that somewhere in that unknown 10% or 20% lies an untapped competitive advantage for your firm.

So, how do you know?

Norman Clark

Yesterday’s post discussed an interesting but disappointing year-end list. Today I want to invite your attention to a more instructive one.

Allan Dinkoff, who is a senior litigation counsel at Weil, Gotshal & Manges, has posted, in the Corporate Counsel section of Law.com, a valuable and entertaining list of  the top ten things that law firm clients want.

Here is his list, but be sure to read his post for his commentary:

1. They want a lawyer who is commercial and who understands their business.
2. They want a lawyer who thinks about them and their problems … all the time, not just when they get called.
3. They want a lawyer who can talk to them in a straightforward way, without jargon and without talking down to them.
4. They want a lawyer who is empathetic.
5. They want a lawyer who has a point of view, but also is interactive.
6. They want a lawyer who likes clients.
7. They want a lawyer who thinks about issues and the relationship from their point of view, not the attorneys’.
8. They want a lawyer who is always hungry for their business, not accepting it as a given.
9. They want a lawyer who charges a fair price.
10. They want a lawyer who wins.

Do you and you partners deliver each of these ten things? Do you do it consistently? How would your clients rate you on each of Allan Dinkoff’s ten points?

Do you even know for sure?

The absence of a complaint is not the same thing as client satisfaction.

Walker Clark, LLC, provides a low-cost service, the Client Service Monitor, that will give your firm up-to-date, reliable information about how well you are meeting the needs and service expectations of your clients. It is critical that every partner in your firm understand how your clients perceive your firm’s performance. This understanding must be based on reliable data — not impressions, “experience,” or hopeful thinking.

It is worthwhile to note that the title of Allan Dinkoff’s post is “Avoid Getting Dumped by Your Client.” The Client Service Monitor can be the core of your firm’s “anti-dumping policy.”

Norman Clark

Alex Novarese published some interesting thoughts in LegalWeek.com recently. In his commentary “That Value Mystery,” he asked whether clients — yes, clients — are doing enough to promote good client service by law firms.

Follow Novarese through on this.  I would not go so far as to suggest that it’s the client’s fault, but what he says really does make sense:

These days no one really doubts that high-end legal service is a market. As such, it’s competitive and highly transparent, two of the essential components of a properly-functioning market. After all, clients can easily find out what partners are paid and a host of other metrics showing how law firms’ finances are structured. Media outlets, directories and law firm websites readily hand out information on which practice areas individual law firms are accomplished in and how many offices they have. Should a client care, they can even easily get a sense of how well firms pay their staff, how happy the staff are and how often they change jobs. In many ways, the information cup overflows.

Traditional law firm marketing, according to Navarese, might be missing an opportunity,  He continues:

Talking to clients recently regarding how law firms pitch, it was clear that there is massive cynicism regarding the drivel some law firms churn out when marketing to in-house legal teams. But I wonder if clients have themselves done enough to support those law firms that do go the extra mile on client service, commercial engagement or alternative billing. Without that support there is little incentive for law firms to bother raising their game, since it requires more effort and cost, and they get limited wider benefit from it. For transparency to deliver efficient markets, the information has to be relevant. Without more information of this nature, innovation from law firms will be slow coming and there will be a limit to what word of mouth or ‘the market’ can deliver.

There are two words in that previous paragraph that merit special consideration.  We all noticed the use of “drivel” to describe some law firms’ marketing to in-house counsel.  (That might be overly charitable in some instances, but I will let it pass.)

The other word is “relevant.”  Clients will be interested in features and benefits only if they can understand how they are relevant to the client’s needs.  This shifts the focus of the inquiry where it properly belongs — back to the law firms.

The reason why many clients do not appear to be interested in some of these non-financial features is that most law firms usually produce nothing but promises and platitudes when marketing client service.   They can’t explain how best-in-market client service produces a financial benefit to the client, which can more than offset a fee that is a few pounds, dollars, or euros higher.  When pressed, some law firms are unable to describe even one consistent practice or procedure that the firm uses to monitor client service and reduce the causes of client complaints.

In-house lawyers are often under intense pressure to reduce legal spending, which too often gets misdefined as cutting fees.  I have spent too many hours listening to my clients in corporate law departments complain about poor service from law firms — far more than they complain about price — to agree with Norvarese’s suggestion that they do not care.  They do care; but, having come from law firms themselves, many in-house counsel assume that there is nothing that anyone can do about it.  They work in-house for a company or government agency, but part of their minds are still stuck in the law firm paradigms that governed the formative years of the careers of many of them.

This is a great opportunity for the law firms that can do two things:

1. Demonstrate systems and procedures to ensure consistently high levels of client service.  Sadly, in most law firms, client service is little more than a slogan.
2. Explain how things such as quality assurance systems, ongoing requests for client feedback, and a motivated, productive team of fee earners and support staff can deliver tangible, measurable financial benefits to the client.

A significant part of the marketing of professional services involves education of the client — even if the client is an experienced General Counsel or Chief Legal Officer.  The burden is on the law firm to create the interest in superior client service as a reason to select them over other equally competent competitors charging approximately the same price.

If your law firm can’t explain this, don’t expect the prospective clients to try to figure it out on their own.

Norman Clark