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

Why don’t more law firms conduct client surveys?

Our firm has been researching that issue continuously for the past five years, through surveys (of course!) and also hundreds of informal discussions with law firm managers and marketing directors.

Some law firms are simply afraid to ask for feedback.  They are not relevant to this issue because, refusing to solicit feedback in a systematic way, they are doomed to crisis-to-crisis improvisation and, ultimately, the deterioration of their client base and market position.

However, when we ask people from healthier firms why they have not conducted a formal client survey within the past five years (or, in a shocking percentage of instances, never!), we usually hear three excuses.  Each one of these reasons seems to make good business sense, but has been disproven by the experiences of successful law firms throughout the world.

“Clients already have to fill out too many surveys.  The won’t participate in ours.”

Most clients see a significant difference in a survey conducted by a hotel chain and a serious survey conducted by a law firm.  When clients fail to participate in a survey conducted by their law firms, it is frequently because:

• The survey questions are trivial; or
• They are not confident that their answers will make a difference.

Law firms that send out generic surveys usually learn this lesson the hard way.  Surveys that might work well in ordinary consumer businesses can completely miss the key points with respect to quality in legal services.  This is why we recommend that your survey be designed for a law firm — not a hotel chain — and  be tailored to the specific characteristics, practice specialties, and client base of your firm.

The truth is that even the busiest clients like to be asked for their opinions.  If at all possible, even busy clients will try to find time to answer serious questions.  However, questions such as “Do you like our website?” and “Are our fees fair?” (I am not making these up.) usually drive clients away.

A good law firm client survey should be as sophisticated and thoughtful as the clients to whom it is sent.

“Client surveys are too expensive and too much work.”

Like all myths, this one has a kernel of truth.  Client surveys used to be expensive and time-consuming.  With on-line survey administration and tabulation, a custom-designed survey, including an in-depth analytical report and benchmarking to other law firms, can be conducted at a cost that most law firms can recover, several times over, with one new client or one new matter. Whether you design and conduct the survey yourselves or outsource it to a firm like Walker Clark, your firm cannot afford not to conduct a client survey.

“Surveys don’t produce results.”

This myth also can be true if you merely read the survey and do nothing about it. The most important part of a client survey is the follow-up, both with the clients and internally. Even a dissatisfied client can become one of your firm’s biggest fans if you follow up specifically and systematically concerning the points of dissatisfaction.

Specific follow-up means responding promptly to the client about the client’s concerns. Systematic follow-up means making improvements in your firm’s internal operations and client relations practices to ensure that similar problems do not arise in the future.

What to expect from a survey service provider

Every Walker Clark survey, from our low-cost high-yield Snapshot survey (which we offer to any firm for a fixed fee of US$ 800) to our most sophisticated survey service, the Strategic Business Development Survey, offers these basic components:

• A predictable fixed fee
• Multilingual capabilities
• Customized, firm-specific questions
• Comparison of your results to benchmarks
• A written analytical report with specific recommendations for follow-up
• Post-survey advice and assistance with implementation

These features can turn a client survey from a marginal marketing exercise to a low-cost investment that pays for itself with one or two new instructions and can produce a higher return on investment than almost any other marketing activity.  They can also help your firm to identify opportunities to improve the cost-effectiveness and profitability of your internal operations, by responding to and meeting the clients’ needs and expectations better.

Visit the Walker Clark website for more information and examples.

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

Prague

Last Friday we launched our new Central Europe Group, to deliver global experience and local expertise to law firms practicing in five dynamic legal markets in Central Europe:  the Czech Republic, Hungary, Poland, Romania, and Slovakia.

The Central Europe Group originated from suggestions and comments by Walker Clark clients, as well as professional friends in the region, who are seeking a multidisciplinary approach to business strategy, management, and operations, that is not readily available from traditional consulting firms at a reasonable cost.

The Central Europe Group delivers country-specific services in:

• Strategic planning and implementation
• Profitability analysis and improvement
• Establishing clear competitive advantages
• Evaluation of mergers, networks, and other growth opportunities
• Improving the marketing performance of the firm and each of its lawyers
• Building the firm’s national and international visibility
• Law firm governance and partnership structures
• Compensation systems
• Performance management to get the best results from each person in the firm

The Central Europe Group has also published a series of country pages with up-to-date news and analysis of the major business and economic trends affecting the business of law firms in each of the five countries. We are also publishing a series of in-depth Background Papers on each legal market. The first of these, Foundations of the Modern Czech Republic, by Daniel E. Miller, Ph.D., one of the coordinators of the Central Europe Group, was published this past weekend and is available for download from www.walkerclark.com.

If you would like a complementary consultation about how the Central Europe Group can assist your law firm, please contact me by e-mail or by telephone at +1.239.466.8370.

Norman Clark

A managing partner of a reputable and reasonably successful midsize law firm recently told me, “We look for partners who are just like us, who we know will fit in.”

This is not the first time that my colleagues and I have heard about this “unwritten trump card,” as a senior partner in another firm describe it.  ”If we have two candidates who are roughly equal, we will usually give the nod to the lawyer who has the better chemistry with us,” a partner from yet another law firm once told me.

Especially in the traditional context of a law firm partnership, it is natural to want partners with whom one feels comfortable, with common backgrounds and points of view to one’s own.  We are more likely to trust and feel confident about people who are more like ourselves.

Is is perfectly natural.

It is also potentially lethal to any business, but especially law firms.

Our firm’s experience working closely with law firm partnerships and practice groups demonstrates that a group of professionals is better able to make hard decisions, manage change, and get the best results from innovations if it has people with diverse backgrounds, experiences, personalities, and points of view.

Such groups are usually better able to:

• See through unproductive business paradigms that most law firms continue to accept blindly as immutable truths.
• Apply a lively intellectual rigor and critical thinking to proposed innovations and, as a result, usually obtain a better return on their investment in them.
• Spot new opportunities before their competitors notice them and build competitive advantages that will be difficult for competitors to overcome.

By contrast, partnerships that are not diverse, where everyone is “just like us,” are usually more likely to:

• Cling to old business assumptions, habits, and “values,” even then they clearly do not produce desired results.
• Dismiss fundamental changes in the legal market as “fads.”
• Worry that recruiting and promoting women and ethnic minorities might “compromise our standards.”
• Fail to implement new strategies or management changes, even when the partners agree that they are needed.
• Avoid differences of opinion as being “damaging to our partnership culture.”
• Consider honest questions or doubts to be disloyal to the firm.

Which of these partnerships is more likely to grow?  Which is more likely to be in business 30 years from now?

Diversity is not just good social policy or a way to check a box on a client’s checklist of selection criteria. It is good business. Rather than look for “people just like us” when we select new partners in our law firms, we need to look for people who challenge us intellectually and who call on us to look at our firms and our profession in new ways.

Norman Clark

Quality assurance will be one of the most important factors in law firm business strategy in the decade of the 2010s. It will have profound effects on law firm profitability by reducing the causes of poor productivity. Law firms that do quality assurance well will also have a powerful competitive advantage over those for whom “quality assurance” is little more than crisis-to-crisis improvisation in response to client complaints.

The current state of quality assurance

As my colleagues in Walker Clark, LLC, and I work with our clients in law firms, we observe six serious deficits in quality assurance. These are particularly acute in small and midsize law firms, but they can apply to law firms of any size. They also appear to be worldwide.

1. The lack of a consistent, firm-wide quality assurance infrastructure in the firm and in practice groups
2. Little or no awareness of the basic principles of service quality in the delivery of professional services
3. Inadequate data upon which to make risk management decisions
4. Inadequate practices and procedures to delegate legal work and manage its quality
5. Over-reliance on after-the-fact inspection of work product as a quality management procedure, rather than reducing or eliminating the causes of error
6. Inconsistent project management skills and practices

In tomorrow’s post, I will begin a six-part overview of the core elements of an effective quality assurance program.

But for now, ask yourself: “How many of these six deficits exist in my law firm?”

Norman Clark

Most law firm websites are beautiful failures. They are visual delights, bursting with information; but they fail to  catch new clients. In some cases, a firm’s web site can actually disqualify it from receiving legal work that it could perform very well.

Your law firm’s web site could be your least productive marketing investment. You can spend thousands of dollars for the design and many hours producing content for the web site. Despite all this hard work, the web site might not draw new clients and new work to your firm.

As a partner in a South American law firm once told me, “Our website is nothing more than a glorified telephone directory.”

This is not the fault of the web designers, the internet, or the firm’s webmaster.  Instead, the problem is the content. It fails to differentiate the law firm in any way that is important to the law firm’s target audience, whether sophisticated purchasers of corporate and commercial legal services or ordinary people with personal legal needs.

Instead of helping the firm to stand out from the competition, most web sites camouflage the firm against a competitive background where almost everyone in the market is offering essential the same services and making essentially the same promises.

Your web site usually has only one chance to catch potential clients or referring lawyers. Unless you can capture visitors’ attention quickly, they will probably spend no more than one minute at your site before they leave it, possibly forever.

How does your firm use those 60 seconds?

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

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

One of the biggest casualties of the recent recession is client loyalty. In many instances, the first time the law firm realizes that there is a client relations problem is when the client stops paying the bills or instructs the firm to send the file to a competitor. By then, it is usually too late to do anything.

When this happens many of the firm’s partners retreat to that old responsibility-evading whine:  ”Nobody could have foreseen… ”

Nonsense.

The truth is that almost every client service problem is foreseeable. The signs are usually obvious and appear early; but they are usually perceived only by law firms that make the effort to look for them. To many law firms “quality client service” is actually little more than a slogan, supported by crisis-to-crisis improvisation when a client service problem arises.

Law firms need an “early warning” system for client service. The main components should include:

• Defining the client’s service needs and expectations in clear and measurable terms at the start of the relationship
• Frequently and regularly monitoring client satisfaction through techniques such as short surveys and interviews
• Responding quickly when a potential issue is identified, before it deteriorates into a crisis that jeopardizes the client relationship
• Benchmarking the firm’s client service performance against that of the competitors
• Using client input about their expectations and the firm’s client service performance to reduce the causes of client service issues or eliminate them altogether.

Everybody knows that these are things that every law firm should do to retain good clients and to attract new ones. We also all know that the cost of avoiding a problem is usually much less than trying to fix it after it has risen to crisis proportions.

However, until now, most small and midsize firms have been unable to initiate these obvious “best practices,” because they lack the in-house staff and financial resources to do them at all, much less to do them well.

Today Walker Clark, LLC, launched a new service, known as the Client Service Monitor, that allows law firms to outsource all of these critical functions at a fraction of the cost of trying to do even one or two of them in-house. The Client Service Monitor is the “early warning” system that all law firms need, but until now, many could not afford.

For more information, visit the Walker Clark website.

Norman Clark