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Client service in professional services: focus on the client

So there we have it. The music stopped, and some firms found themselves without a seat. Sad as it may be, especially for old school legal brands like Cobbetts, life moves on. This may sound harsh, but it’s unfair to keep ‘zombie firms’ operating. They soak up market share, preventing good firms from prospering.

The failing is often down to when the going was good, and bad habits took root. In good times good profits can be had, despite business models being potentially flawed. Firms are able to ignore their business’s problem areas. Poor billing practices, with large percentages of annual billing taking place in month 12, and ill-disciplined credit control underpinned by the fundamental issue of firms being insufficiently capitalised, are all issues that are amplified when the good times disappear.

The LLP business model?

The LLP business model has done nothing to encourage the retention of capital in law firms. As a result, in some corners we have seen partners putting the cash back in. In others, under-performing partners have had to move on. In the worse case scenarios, entire firms disappear.

The legal profession, unhappy at being subjected to market forces, has become a business and will be subjected to ever-increasing competition like any other. The good times have spawned more lawyers than the market could satisfy. High street firms are now competing with large, new entrant, household names. Big law is experiencing the downward pressure that finance directors are putting on in-house counsel to reduce costs and demonstrate ‘competitive value’.

It’s fair to say the profession is naturally feeling the pinch.

The status quo has changed. As I see it, this is the ‘new normal’. We’re witnessing (and partaking in) one of the greatest consumer uprisings in history. A rebellion. Consumers are more powerful than ever before. More connected, empowered and even more demanding. They gather information faster. They have increased comparability. They mobilise much faster. Expectations and tolerance levels have evolved.

Society and technology are evolving faster than business can adapt to. Businesses cannot learn, engage or adapt quickly enough. That includes law firms. Many law firm leaders are lost. The old ways don’t work anymore. Relationships have been lost. Panel sizes have been culled.  Clients are saying business and pricing models of old are too rigid and lack certainty.

Market commentators accuse firms of placing too much emphasis on the management of operations; short term opportunities for growth, being hindered by partnership infrastructures of old. New ways need to be learned.

What do firms do? Where should firms place their focus?

Whenever in doubt; focus on the client

Some elements of future success for law firms are obvious: strong profitability; growing market share; achieving recognition for client service; and providing value. But there are others; less obvious but no less critical.

Whenever markets are uncertain, focus on the client. My critical success factors for the future of the legal profession have clients at the centre.

Law firms must know and understand their target clients (better!).

Fundamentally firms need to understand how clients perceive them in the marketplace. Understand what their needs are and what those clients expect. Firms need to build their entire marketing strategy around really getting to understand clients. Knowing, understanding and responding to them is the primary success factor of the future law firm in difficult times. Any success will ultimately emanate from delivering what clients want in a way that is profitable for the firm.

A lack of transparency and old cultural hauntings such as client hugging often prevents ‘the firm’ from truly understanding the true needs of the client. This needs to change. Firms need real-time intelligence. Firms need to move away from basic feedback systems which involve sporadically holding face-to-face meeting with clients. Now, the need to continuously track and understand clients’ service experiences is a business requisite. Regular feedback needs to be replaced by ongoing tracking, putting ever more effort into understanding changes in their clients’ attitudes, desires and behaviour.

Firms have to be good at understanding client demand. Collecting, collating, and responding to information is critical: data must be precise, accurate, timely and focussed to enable the firm’s management to understand and respond flexibly to trends and changes in market conditions. The old, disparate legacy systems have to be retired. Management information needs to move on from a firm’s ‘hunch’ to a more precise science enhanced by data collection, detailed real-time analysis of services, channel data, life-time pricing and client counting and tracking.

Law firms must translate client knowledge into a ‘right product, right price’ service delivery proposition.

An intimate understanding of your clients is a necessary condition of success, but not sufficient in itself. Client knowledge needs to be translated into a legal services delivery proposition that encompasses the requisite product, price, value and service offer. Firms need to recognise that there is no ‘one size fits all’ solution in terms of the legal service proposition; firms have to connect with their clients on both a rational basis (product, service, price, value) and on an emotional level (environment, service, channel, brand).

Price is a huge challenge for most firms now. However, all markets are awash with ‘bargains’. A great deal of legal services are discretionary. Clients will not buy things now that are not needed – simply because the price has been reduced. Successful firms are not necessarily heavy discounters. It’s foolish of firms to discount on the general belief that they are now adding value. Strategic pricing is more about ‘fair pricing’ than ‘low pricing’. Of course, firms need to consider alternative pricing structures but the most important aspect of pricing is to spend time and energy on finding out exactly what clients want.

Recognise your firm’s brand strength in its respective markets. A proposition that delivers the needs of the client and identifies with them emotionally through the firm’s brand will lead to the kind of loyalty enjoyed by only a select few organisations.

Law firms must develop business models that deliver the proposition successfully.

A law firm’s business model must be able to deliver the legal service proposition successfully.

There are two dimensions: i) the organisational structure and infrastructure and ii) its culture.
i) Organisational structure and infrastructure

There are many internal and financial benefits for structuring law firms as LLP’s. That’s fine. Building a structure around understanding and developing client demand would be a wiser move for the future. Firms need to recognise that it will share its clients with other firms. Every ounce of differentiation needs to be squeezed from the firm.
Shorter chains of command, and reducing the partnership bureaucracy and complexity can only improve the ability to understand and respond quickly enough to the increased mobility and changing needs of the client. Supply and demand is not executed efficiently by slow moving teams or individuals.

With clients placing increasing importance on value for money, collaboration with ‘suppliers’ is key. A firm’s supply chain management must be able to support fast response and flexibility. Good processes, accountability and traceability have never been more significant for firms. Outsourcing elements of the legal process has to be considered. It’s not just a question of cost effective and efficient logistics. Suppliers often have a very good understanding and appreciation of the client and can contribute to a firm’s knowledge of the market, provided it is encouraged and supported in doing so.
ii) Organisational culture

Firms need to permanently evolve in all areas of the business to reflect the ever-changing needs of their clients. A strong management board-led discipline of change management practice must be incorporated into the culture of the business. But critical to this success is ensuring that a firm doesn’t abandon its core values as perceived by its clients. Firms must be prepared to do things in a different way which will give them ongoing success.

Vision, innovation, creativity and having a ‘can do’ attitude, being prepared to accept changes and adapt to changing needs, is all key to a successful organisational culture. As is having a flexible infrastructure to do so. Leadership is a must. No longer can management hide behind the partnership ethos. Decisions can no longer be delayed due to achieving consensus or abstention. No longer can operational ‘silos’ engage their respective markets separately. Compensation systems that reward ‘lone ranger’ behaviours must be refined to encourage cross-selling.

Successful firms have to allow for bravery in their culture. They must be able to be aggressive with channels, staff or formats that don’t perform and cut them back speedily and efficiently. Similarly they must invest in channels which do perform. Firms must provide a peerless or single-minded undertaking to its due diligence and then waste no time in trying new locations, new formats or new service lines, underwritten by constant evaluation, refinement and evolution of its ‘proposition’.

Law firms must adopt a management culture able to constantly re-evaluate the proposition and the structure.

Propositions have to be constantly evaluated to take into consideration the changing nature of the environment and the impact of financial pressures on the client.

Innovation and having the confidence to innovate is key. Continually re-evaluating the proposition and the business model is important to the client and vital for any firm wishing to keep ahead of competitors who share that client. There are many examples of highly successful organisations of the past who failed to adapt or adapted too slowly and lost market share and impetus, and either disappeared or are now mere shadows of their former selves.
Having the right culture to encourage constant re-evaluation of the business model and fine-tuning of the proposition, to enable the business to evolve seamlessly and effortlessly – is all of pivotal importance.


In the current economic environment, the fundamentals are crucial. In tough times and in times of uncertainty the relationship with the client is always a great place to start thinking. Cutting back on service quality or reducing elements of the service proposition is not possible. When markets become more challenging, it’s not simply a matter of switching out some lights to save on electricity.

Having a deep understanding of the client and their needs is central to developing a successful proposition that not only works for the client but also works for the firm. Sound propositions are only as good as the culture and infrastructure delivering them. This is where the right structure and culture is paramount for a firm’s potential to innovate; to facilitate a flexible and speedy response to the market.

Firms need to take a hard look at their senior management and staff, and assess whether or not incumbents are both willing and able to respond to changing market conditions. If not, hard decisions may have to be taken to correct this in order to continue to deliver a successful proposition to the target client. A shorter decision chain is no bad thing, particularly in a downturn when firms can potentially make some reductions in management to positive effect: getting rid of resistance to change; reducing the payroll; shortening the decision chain; and, as a bonus, giving younger management an opportunity to ‘prove’ themselves.

Successful firms are savvy enough to understand that competitors may be feeling the pressure too, and recognise that some will prosper at the expense of others in a down-market. There is no magic pill which will get each firm through to the other side unscathed, and what works for one may well not work for all, however, what is vital is the constant measurement, management and evolution of a firm’s understanding of its clients.

Happily many firms will have the client-focus, relevance of proposition and business model to succeed. Others, sadly, will fall and perish. But wherever they fall in the great legal forest, new saplings will grow and flourish in the clearings made. Who knows what original propositions they will have, what new legal DNA guides them, what exciting innovations will be in store?