Win more work, at higher prices, with happier clients
In our research for a Case Study at Harvard Law School, we came to understand that there are at least three different type of services that professionals provide to their clients. These categories have been analysed before, and they corresponded to the specific needs of the client. Was this a one off, high risk or reward issue, where the client needed a Rocket Scientist to save the day? Then the client would focus almost entirely on expertise and credibility.. Or did the client have high volumes of Routine Work which may be necessary but were not seen as very high risk or reward? If so then price and reliability of delivery came to the fore.
Or, was this mainstream advice – the vast bulk of professional services – where the client was long term and the advice was important for the success of their business? We called this Relationship Advice. We did that for a reason – because in our client interviews they had all stressed the value of a real relationship with their professional adviser. But here, we found a curious anomaly. In the majority of cases the professional thought they had a real relationship with the client, but the client said not. The client just saw the professional as a service provider, hired when needed, paid what were often considered excessive amounts, and the client was quite happy to use regular beauty parades and even procurement professionals to drive down costs. That didn’t sound much like a “relationship”.
How to avoid relationships
We want to be very clear. You don’t have to have a “relationship” with your clients to work for them. You can be a good lawyer, accountant, architect, management consultant or whatever, by being really good at what you do. You need to be responsive, deliver on time and charge fairly. We have met hundreds of professionals who were doing exactly that, but we came to think of these people as “suppliers”. The problem they had is that clients can find a lot of other good suppliers. They could ask friends and colleagues, get recommendations and find another really good professional this way. So we categorised this position as “not sticky” – if any particular professional was not available for a job, the client could find others. In fact the clients we spoke to, often had several firms on their panel who they could rely upon to do a great job. So they just divided the available work between them. There was no loyalty to any individual adviser. We saw that as a problem, aside from creating the peaks & troughs of work pipeline that many lawyers experience – it was about loyalty. Because loyalty has a substantial, cash, value – as we will show.
Then we met Gracie
In our personal lives we value relationships highly. Not just having family and a significant other, but for our professional needs. We don’t want to see a different dentist at every visit, and there is actually recent research that demonstrated better outcomes for patients who regularly saw the same doctor*. For most of us, we don’t even want to change hairdressers and would object to a third party procuring us the cheapest hair cut each time we needed one. So why was so much professional service work being done in the absence of any real relationship?
Then we met Gracie. She was a partner based in the Chicago Office of a Global Law Firm. I was told that she was the Relationship Partner for a major Investment Bank. This expression, Relationship Partner, always piques my interest. I’m always doubtful – so my opening question is always this, “Tell me about your relationship with [Insert Name of Key Board Level contact at there client]?” This is where it usually falls over, as the partner starts talking about specific pieces of professional work they completed. But not Gracie – she replied, “Well, last weekend I attend ended his daughter’s wedding.” That’s pretty impressive, I told Gracie that I was going to ask her at our forthcoming Business Development Workshop, “How do I get an invite to my client’s daughter’s wedding” so that she could tell the story. What do you need to do? Gracie told me, “That’s easy, I just ring him up from time to time for a chat.” What did she mean? Well a chat about rumours she was hearing, what deals were going down, who was moving from one Investment Bank to another.
Here’s what’s different. Gracie rang the client but not about a legal matter she was handling! She was calling to share sector knowledge, and to ask him about what was going on in his world. She was interested in him and his career. She was proactive. She didn’t wait for him to call her on a job, and she spent time off the clock talking to her client about the sector.
And this became a real theme when we visited professional service firms and asked the Managing Partner, “Show its your best business developer.” We met John in Boston, who took his clients to breakfast every two months without fail. Why breakfast? He gave us three reasons – first he said clients were happy to give time before the day started. Secondly, he told us that there was something different about breaking bread with a client. He learned things over breakfast that he would never learn at any meeting in an office. Thirdly, he found that everything he learned, made him a better and move valuable lawyer for all of his clients. Sometimes we fail to appreciate that being a professional advisor means that we range across a sector, whereas our clients can feel very siloed in their own organisations, and really value hearing from us. Incidentally, his Managing Partner described his ideal partner as “affable, available and able, in that order.”
In Canada I met a partner who said, “I would lay down in front of a train for my clients!” He meant it too, and when we interviewed some of his client they said the same thing. One said, “He’s always thinking of me and my business. I often get little notes that he saw something that might be useful to me, or found someone he thought that I should meet.”
What do the clients say?
Generally speaking, we found that clients were most likely to bemoan a lack of real relationship building skills from their professional advisers. The General Counsel at one of the world’s largest banks told us “I have eight firms on my Global Panel. Only one of those firms has attempted to form a relationship with me. And I need to tell you how low the barrier is,” he added, “just one of these firms has come into my office for a coffee and talked about me, not about them. Only one firm has asked what it was like having my job, what other people I would like to meet, which of my. annual objectives I could really do with some help on.” One Head of Litigation at a global bank told us “I found my favourite Partner in a really simple way,. Every firm had been providing me with advice consisting of numerous pages that I then had to reformat into PowerPoints to present to my board. One day a partner noticed this…and suddenly everything started coming with a PowerPoint breakdown, saving me so much time. I call them first now.”
At a Law Firm Conference in New York last year, the General Counsel of an Insurer complained that he would fire the next law firm partner who contacted him to say “you must meet our Cyber Security Partner”. He asked, “Why can’t any firm think it through from my point of view and say, ‘we know your business and we have put together an hour’s presentation on your key Cyber Security Risks, and we would like to come and deliver that to you’ – rather than always looking on this as a sales opportunity?”
Some years ago I had the opportunity to work with David Maister, the Harvard Professor who wrote “The Trusted Advisor” with Charles Green and Robert Galford. He told me the story of having had a root canal filling at his dentists. It wasn’t a pleasant experience but it was a job that needed doing. That evening at home he was talking to his wife about his day when his phone rang. It was his dentist, who was just checking in on him, making sure he was OK and not in too much pain. As he said to me, “That was ten years ago and I am still telling people about it!”. More recently I worked with a Pensions partner who explained that she had to create the Agenda and all the working papers for the quarterly meeting of the Pensions Trustees of a major airline. Unless there was something specific coming up she would not attend the meeting, but she knew it finished at 4pm, so she would call the client at 4:30pm to check that everything had gone well. This is a relationship, it doesn’t take any special skills or abilities that you don’t have – literally any partner can do this.
The pay off is very clear. It takes time, it takes thought but the clients are intensely loyal, keep the work coming and rarely if ever query any bill. They express much higher satisfaction that the average and are happy to recommend the professional to others and help build their practice. What else can you do that delivers such a high return on time invested?
What are the alternatives?
When we are teaching Business Development on an Executive Education Programmes, or on an in-company course, we are careful to show that building relationships is not the only answer. We see partners winning in other ways – most commonly it aligns with work types, and we use three specific categories as our starting point. We call these Rocket Science for the client’s most urgent, important or risky work; Relationship Advice for very important but mainstream advice: and Routine for the day to day advice which is necessary, but not high risk or high value. This gives us a table as follows.
We found successful and high earning partners in each category – the best just understood where they were, and then excelled at what they did. Partners in the Rocket Science area knew that they were hired because of extreme expertise, and had to be comfortable, confidant and well connected at Board level. They needed a national, if not an international, reputation in their field, wrote articles if not books and were recognised as outstanding by their peers. This was not a relationship play – they often saw clients only once, at moments of extreme need. On the other hand, successful partners in the Relationship Advice space, knew that they were unlikely to differentiate themselves on legal expertise – quite honestly, the client could find other lawyers, other law firms, who really could handle the work to a similar standard. So it was in the way that the service was delivered, and most importantly in the personal bonds that they created, that they would differentiate themselves. Partners delivering Routine Work knew that they were involved in process and that efficiency was all. They had to reliably deliver work to an agreed standard but knew that “loyalty is 5% thick” – if a competitor could do much the same, and save the client money, then they were likely to take the work.
Now, not every client in the Relationship Advice space actually wants a relationship. There can be cultural factors against this. We think that they are missing out, but it is their choice. We found this common with supermarket clients and others that operate on a low margin / high turnover model; or those that have a corporate culture of frugality. These clients become “price buyers” putting low cost above everything else. Our advice is not to serve them unless you have a lower cost base than your competitors and enjoy grinding out cost. You can easily spot “price buyer” clients because they regularly change their panel of advisors, use procurement to drive down prices and are often too busy to spend the time that advisors need to really understand them and their business. You can be successful here but you need to think like a budget airline, which is not a common skill for the average lawyer – which may explain the success of alternative legal providers in this space.