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Running down our capital assets? Part three – Maintaining client relationships

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In part one and part two of this article, Kevin looked at the risks arising from the deterioration in the health and wellbeing of our people and then in the erosion of the cultural glue that holds everyone together in a firm. Now Kevin looks at an issue that has been troubling many Managing Partners – the erosion of client relationships.

In the last 12 months firms have saved millions on marketing and business development budgets. No big events, no travel to clients, no lunches or physical seminars. Firms have been very open with me – one of the big contributors to their great bottom-line results during the pandemic has been the collapse in expenses. But at the same time, I hear worries from Partners about the absence of the traditional touch points with clients and a feeling that Zoom catch ups are a bit passed their sell by date. Clients are also feeling this effect – the strong personal relationships they had built up have been fading.

When I talk to Partners, I find quite a variety of approaches – which is why I now see best practice here is when firms launch formal programmes around client relationships to try to harmonise activities across the whole partnership. At one end I have conversations with Partners who say, “I make sure that I am in contact with one client every day on phone or video, just to check in on them.” At the other extreme I talk to clients to say that they have felt that many of their law firm Partners have been overwhelmed with work and have seen a deterioration in the level of service, let alone anything that is maintaining the relationship.

Improving client loyalty

In parallel, in the last two years I have seen a realisation by some firm that they either need to put in place a key client programme, or need to improve the one that they have. I started becoming interested in this issue when creating the Harvard Law School Case Study on Business Development* and gave the example of firms listing key clients on a grid, mapped against all the different services that the law firm offered. The plan was to cross sell more services so as to fill up more of the squares in the grid. While I had seen this approach literally hundreds of times in law firms, the problems with it had two roots. Firstly, client don’t like being cross sold to; secondly it was law firm focused – you could see the benefit to the law firm, but the benefit to the client was pretty ephemeral. If you compared this with corporate schemes (think hotels and airlines) these were successful because they rewarded loyalty. I’m pleased to say that a few firms have now created and rolled out key client 2.0 programmes – often overcoming Partners objections (!) to show that identifying the really key clients of your firm (not as easy as you think, but at least start by ordering them in profit value, not gross fees) and rewarding them in individually tailored ways that the chosen clients actually value is undoubtedly the way ahead.

Creating and embedding new key client programmes is, I believe, a crucial way for law firms to focus on and improve the loyalty of their most important clients and to start reinvesting in client relationships that have been diminished through lockdown. It can be an invigorating and positive way to mobilise your Partners and Associates and I have seen it being well received as showing lawyers what positive actions they can carry out now – and collaborate with each other in the process.

I’m going to end with a recent quote I was given by General Counsel I met last year. She had originally worked at a famous London HQ’d law firm; then moved to work for the legal practice at a Big Four accountant’s law firm; and is now a GC at a FTSE 100 company. I thought this was an interesting background and asked her about the differences she had seen. She said that when in her first law firm they had regular meetings to discuss their biggest clients and the topic was “What should we be cross selling into this client?” In contrast, in the Big Four law firm, the topic of this meeting was called, “How can we add more value to this client in the next 12 months?” As a GC she was very clear on which of these approaches she preferred.

* Chasing Growth at Sasker Deveraux. Doolan, Rohrer, Caught. Harvard Law School Case Studies