M-Club: Do you have the right tools to service your clients?

In today’s legal competitive market, firms must do everything possible to ensure client loyalty. Richard Parnham asks Lighthouse consultant James Edsberg what steps firms need to take to develop a productive client feedback programme.

First, the good news. According to James Edsberg, a partner at strategy consultants Lighthouse Global, most law firms offer their clients a good service. The bad news is: so do many rival firms. In today’s competitive business environment, Mr Edsberg is clear – firms who offer their clients a very good service can’t guarantee that they will be retained in the future. “Clients don’t tend to be either satisfied or dissatisfied with their law firms – it’s not as simple as that,” Mr Edsberg explains. “In a market jam-packed with excellent lawyers, clients judge and select their external law firms on a more complex set of criteria than simply ‘satisfaction’. And this has profound implications for how firms should structure their client feedback programmes.”

Lighthouse’s conclusions are based on a recent study of the client feedback programmes of law firms around the world.

In recent years, many firms have taken steps to become more client-centric. Some of the largest firms have begun to establish client feedback programmes - and act on the results. However, Lighthouse’s study shows that there isn’t a clear consensus across the industry. All law firms who participated in this analysis take client feedback seriously. But many firms – particularly those outside the ‘Anglo-Saxon’ jurisdictions – believe a structured client feedback programme isn’t necessary. For some firms, the culture is for partners to do this as individuals, rather than as a firm-wide initiative. For others, partners take the view that they know each of their clients well enough to know what clients think of the firm’s performance. Many believe that social functions are an adequate forum for understanding client needs. And for some firms, size is a factor. “An informal, 1-on-1 approach may be fine if you a six-partner firm in the Czech Republic for example, but larger firms are looking for a more consistent and rigorous approach,” says Edsberg.

To a certain extent, the trend towards law firms employing a more structured approach to client feedback is inevitable – the relationship between the in-house counsel and their external law firms has simply grown more complex in recent years. To improve efficiency of workflow, different lawyers within a law firm will often work directly with their in-house opposite numbers within the client company, bypassing both the client’s general counsel and the firm’s relationship partner. As a result, without a structured client feedback programme, neither the general counsel nor the relationship partner is in a position to directly monitor client satisfaction. This lack of monitoring is not a sustainable situation – particularly at a time when legal costs will come under increasing scrutiny.

Once a firm decides to bite the bullet and initiate a professional client feedback programme, three preliminary points must be resolved up front. Firstly, the firm must to decide by which methodology feedback is to be obtained. Secondly, they should decide who within the firm has the authority and leadership to drive the process. Thirdly – and most critical of all – the management of the firm must win the confidence and support of partners for the feedback process.

When it comes to choosing a feedback approach, James Edsberg says most firms typically opt for one of two different approaches to client feedback. They can take the “macro” approach, and focus most of their efforts on the firm’s key accounts, or alternatively, they can try a more universal, “micro” approach, and seek feedback from a large number of clients.

For firms who decide to adopt the “micro” approach, many choose to make use of “online questionnaires” or surveys. There is an obvious reason for this – online questionnaires have several advantages over face-to-face meeting. An electronic questioner is truly impartial, and will not be offended by a blunt reply; online forms can be straightforward and convenient for busy clients to complete. Plus, they have the advantage of being consistent in their questioning – therefore making it easier for firms to analyse responses between clients, and extract clear patterns. However, Lighthouse’s research suggests that firms should be wary of making heavy use of them. For all their real and perceived advantages, client satisfaction surveys risk giving the impression of being cheap and impersonal. “If a client provides a law firm with $200,000 worth of work per year, an online survey may not be seen by the client as an appropriate way for the firm to ask for feedback,” he says.

For firms who opt for the more “personal”, “selective” or “macro” approach of focusing on key clients, Mr Edsberg has an equally blunt advice, “The research shows that it’s vital to have some independent element to the feedback process.” As a consultant to the legal profession, it may be expected that Mr Edsberg would encourage law firms to make use of knowledgeable relationship experts – such as himself – to lead a client feedback programme. In fact, he does not. “It really depends on the culture of the firm – it would be wrong to say that using an independent third party to gather feedback is right for all firms – it’s a question of the firm’s culture and of resources.”

The Lighthouse describes the different approaches firms use to get conduct interviews for those adopting the “macro” approach – each has advantages and disadvantages. Some firms tend to use current or retired partners to lead the interview process. “We would normally advise against using the relationship partner to ask the client about their existing relationship – there are plenty of examples of where that approach hasn’t got all the issues out on the table.” But independent or retired partners can bring the own problems. Firstly, these people may not have the interviewing skills that are required to extract useful answers. Secondly, there is a huge “opportunity cost” in taking an existing partner away from fee earning, and making them take part in a client feedback programme. Thirdly, in many feedback conversations, partners can’t stop themselves pitching for work whenever they get in front of clients. “Clients notice when a meeting billed as ‘client feedback’ turns into a pitch for more work – and that can lead to confusion – even irritation.”

For Mr Edsberg, one of the important features of any feedback process is to put the firm’s marketing or business development personnel at the heart of the process – either through doing the interviews themselves or in assisting with interpretation and embedding the lessons learned. As employees of the firm, they will be familiar with the type of work the firm advises on, so will benefit from a degree of familiarity with the matters to be discussed. More importantly, because they normally have little direct contact with clients, “owning” the client feedback process puts them in a stronger position within the firm to advise partners and to shape business development activities.

Having decided how the questions should be asked and who should ask them, the next point of discussion is – what questions should the firm actually ask of its clients? Here, Lighthouse’s review gives a number of possible suggestions (See Box, Sample Questions) – although he stresses that each firm tailors its approach according to its own specific client base.

In any in-depth feedback interview, Mr Edsberg says that what firms say works best is to replicate some of the structural advantages of an online questionnaire, combined with a more discursive setting. Ideally, the firm should ask a mixture of qualitative questions– ones that are more open-ended – supplemented with questions that produce a more quantitative response – for example, a numerical ranking. “Ideally, the questions the firm asks should allow the firm to compare one client’s feedback with another, or to come to a view on how its Brussels operation is performing compared with its office in Frankfurt,” he says.

One popular question Mr Edsberg believes firms should avoid asking is asking the client to give it a numerical “satisfaction” rating. Although the question generates a tangible “quantitative” result, Mr Edsberg believes the value of this data is limited. “Boiling down a relationship to a number, a satisfaction score ‘out of 10’, doesn’t convey the multi-facets of what makes a relationship tick, and it doesn’t win over many fee earners who are sceptical about the use of such a simplistic scoring approach.”

Instead, Mr Edsberg believes that if a firm does favour a scoring approach, a more enlightening response on the health of a client relationship is prompted if the firm asks the client if they would recommend them to someone else. “A professional recommendation requires the client to stake their own credibility in the firm’s reputation. If the firm is not good enough for them, they’re unlikely to recommend it to one of their peers,” he explains.

For many firms, one of the most difficult issues in relation to any client feedback programmes is the extent to which it should actively invite its clients to criticise its performance. Yet, although it may be painful for them to do so, Mr Edsberg says that firms should not avoid asking the tough questions. While no one – especially those engaged in professional services – enjoys receiving criticism, it is also a vital part of the feedback process.

To overcome the huge challenge of many firms which comes from fee earners’ internal resistance to the feedback process, Mr Edsberg has two practical suggestions. Firstly, and to give balance to the feedback process, the interviewee should also ask the client to give examples of when the firm has been especially helpful. “Law firms are often surprised about which aspects of their service clients really appreciate,” he says. “A nifty two-page boardroom note, or a clever way to exchange data, might get a very positive mention but the firm might not have a given second thought to what it has done.” Secondly, any attempt to invite clients to criticise the firm’s performance must be followed up internally in a positive, non-judgemental fashion with the fee earners involved. “Even before it starts the feedback programme, the firm must accept that there may be criticism, and put a process in place that will help the firm overcome the concerns raised,” he says. For example, an independent partner may be assigned to review a particular relationship, or to provide additional mentoring or training.

Once a client satisfaction programme has been completed, it is essential that the client is made aware of how the firm intends to follow up on any areas of concern. “If the client has invested their time and effort in providing feedback, they will expect the firm to make use of its findings,” says Mr Edsberg. At this stage in the process, the main relationship partner – sidelined during the research process – can play a crucial role. “At this stage, the partner should come back with a plan on how to take the relationship forward,” he says. However, Mr Edsberg also believes the impact of the feedback programme should extend beyond the narrow relationship with the client relationship partner. “The feedback should feed into the firm’s training and evaluation process,” he says.

In terms of how often firms should conduct a client review programme, this will obviously depend on the level of interaction between firm and client. Mr Edsberg suggests that a large law firm dealing with a sophisticated client should typically set aside a review process after the completion of each major matter. This, in turn, should be supplemented with a more wide-ranging review, which should be carried out every 12–18 months. “Obviously, there would be no need for a firm to carry out a periodic review if it has only acted for the client on one matter in the past year, and had already carried out a post-matter review,” he says.

In general, Mr Edsberg believes that, as firms become larger and clients become ever more sophisticated, client review has become a fact of modern life. But, by following a few simple steps, Mr Edsberg believes firms can create a system which is cost-effective, informative, and makes the client feel genuinely appreciated. “In five years of talking to general counsel, I have never heard one of them tell me that they would be too busy to discuss their relationship with their law firm,” he concludes.

Sample Questions

Service Delivery

■ Please could you rate the importance of the following aspect of service (e.g. accessibility, responsiveness, commerciality of advice?

■ Could you also say how well the firm performs in each of these areas?

Loyalty

■ Would you be willing to recommend this firm to a peer or a colleague?

■ If so, why?

■ If not, why not?

Selection

■ Please could you say how important each of the following criteria are in your decision to select a firm (e.g. the highest calibre people, a proven track record, etc.)?

■ Could you also say how well the firm fulfils these criteria?

Growing the relationship

■ Are there any areas where you require legal advice for which you do not use this firm?

■ What evidence would this firm have to display to win more work from your business in these areas?

Brand positioning

■ How would you describe this firm’s reputation in the market?

■ To what extent is the firm delivering on the following attributes? (e.g. teamwork, expertise, clarity, etc.)?

Marketing

■ Which of the following types of information do you find the most interesting (brochures, email updates, business issue research, seminars, etc.)?

Lighthouse’s Client Development Research Paper is available from Lighthouse Global at info@lighthouseglobal.eu.com or on +44 (0)207734 8447

Last updated - 23 April 09

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