Chris Vaughan 2014-11-24 09:43:46
Does your firm track the number of new legal matters and new clients on an annual basis? If not, a simple metric should be added to your annual review. According to Bain and Co., improving client retention by just 5 percent can increase profitability by 75 percent. Consider also that, according to Lee Resource Inc., attracting new clients can cost your firm five times more than keeping an existing client. Depending on the type of client management or project management system your firm is using, this can be an easy metric to monitor. Utilize the E.B.O.S.S. acronym to determine how your firm can improve its client retention. Efficiency: According to Acritas’ Sharplegal research, 22 percent of clients who switched law firms did so because the firm was too expensive. Another 14 percent made the switch because of poor service or slow response. In other words, 36 percent of clients who switched law firms did so due to issues directly related to law firm inefficiency. Client retention thus begins with a firm’s focus on the internal processes necessary to provide services in as efficient a manner as possible. A firm that fails to provide high quality, efficient services must spend valuable time in communications with clients explaining its deficiencies instead of focusing on the strengths it brings to the relationship. Bonding: A prominent attorney recently told me that “clients don’t care what you know until they know that you care.” The attorney/ client relationship is not just a business relationship; it is a personal relationship as well. When some non-billable time can be taken with a client to build the relationship, the attorney benefits from learning more about the client and ways in which the business relationship can be expanded. An important byproduct of building the personal relationship is that it carries over to the clients’ personal relationships with others, thus leading to referrals. Objectivity: Although clients demand efficiency and value personal relationships with their attorneys, they expect objectivity. They assume that their attorney will tell them the truth when no one else will. They may, and frequently do, push back on advice they do not want to hear, but they know they need the frank exchange. Attorneys who trade too much on the personal relationship to the point that they try to tell the client only what he wants to hear may achieve some short-term success, but will ultimately lose the long-term trust. A corollary to the problem of failing to be absolutely candid is postponing any bad news discussions. Such delays in fact compound the problem because they resemble inefficiency and inevitably lead to less client contact. Solutions: Delivering an objective assessment of a client’s situation addresses only one of the client’s expectations. The other expectation is a creative solution to any problems inherent in the situation. An attorney who efficiently provides a candid assessment to a client’s situation and demonstrates empathy with the client’s needs and objectives is ultimately successful in establishing a relationship that will last when he carefully crafts the best possible result under the circumstances. The next best result, in some situations, is engaging a specialist, whether in the attorney’s own firm or in another firm. The result is enhanced trust from the client, who now knows that the attorney will always put the client’s needs first. Service Reviews: There is no reason to guess about the client’s perception of the attorney’s performance or about the overall quality of the relationship. When asked in the proper context, most clients are quick to respond candidly. On no less than an annual basis, the attorney or someone involved in management of the firm should meet personally with the firm’s principal clients and address two key topics: (1) express thanks for the client entrusting his work to the attorney and firm and (2) inquire as to what the client would like the attorney or firm to do differently or better going forward. Note that it is extremely important to follow up on the client’s suggestions if at all possible. If the client takes the time to help, he is likely to expect the changes he suggests. Worry less about selling your firm and focus more on efficiently handling clients’ matters while also taking time to build a relationship with the clients. Those who succeed are efficient; establish strong personal relationships with their clients; are objective in the advice they provide; seek appropriate and creative solutions; and, inquire periodically as to the client’s perception of the relationship and how it may be strengthened. Chris Vaughan is the managing member of Firm Transitions, a full-service solution center for law firms. For more information, visit www.firmtransitions.com, call (336) 415-3476 or email email@example.com.
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