Stephanie Hamon and Kevin Doolan have been working on the opposite sides of the client and law firm relationship. Stephanie Hamon was until recently a managing director in Barclays Bank’s legal department and the key player in developing Barclays Bank’s approach to managing its law firms. In particular she had acquired a global reputation for developing a new relationship model and commercial approach. Kevin Doolan spent more than 25 years as a partner at law firm Eversheds before moving to Executive Education teaching pricing and business development at Harvard Law School.
So they were surprised to find when they met that they came up with exactly the same solutions for success in building profitable relationships. Here’s their Top 5 ways to build a better relationship with a key client.
Number One – Transparency + Integrity = Trust
A common observation Stephanie and Kevin made was that the relationships regularly appear dysfunctional, despite some going back decades. Both sides seem convinced the other is trying to get the better of them, particularly around pricing. So first thing first: the trust needs to be rebuilt. To do so, more transparency is required, around both qualitative and quantitative information characterising the relationship. The topics covered should include – but shouldn’t be limited to – the company’s strategy, its legal department’s objectives, its external spend and respective distribution, share of wallet on the corporate side and the firm’s strategy, its objectives for the relationship, its financial performance and target on the law firm side.
The number one tip is therefore to agree on a set of metrics that both sides would find useful to share in all transparency. This will ensure a shared understanding of the reality of the relationship, a common language to report back at their respective bases and an agreed upon objectives measures of success.
This means that the law firm gains a much deeper understanding of what the client actually values. Far too often, partners assume they understand this when they don’t – making it explicit really helps. It also allows the law firm to understand what they could do to make their service more valuable to the client, and therefore worthy of higher fees. It moves the conversation on from talking about discounts!
Number Two – Don’t assume: ask!
Related to this is the apparent apprehension, in particular on the law firm side, to ask qualifying questions. This in turns leads to too many assumptions and misunderstandings. Over time – or over the course of a matter – this creates a real disconnect that is relationship damaging. All would save time, efforts, resources and money if the right questions were asked at the right point in time to ensure a common understanding of the expectations.
By training, lawyers typically strive to get things 100% right: no matter the efforts required (or cost). But then there is a risk that they lose sight of the bigger picture and objectives – and the need to judge input required versus benefits to be obtained.
So the second tip is to keep reviewing objectives, progress and cost with the client. Lawyers hate discussing money – but on the client side very regular check ins on cost and progress are massively reassuring. Ensure you create an objective forum and/or framework where those topics can be discussed and questions can be openly asked.
Number Three – It’s still a peoples’ business
To implement the first two tips appropriately requires sometimes uneasy or challenging conversations. It will also lead to the need to look at the relationship with a new perspective. However, too often the relationship teams on both sides have been decided on a different basis e.g. individuals working the most together, or historical contacts. And it is seldom refreshed or evolved based on the business requirements. Of course, it is critical to work with individuals whose company you enjoy and whose ability you trust. But the changing legal industry requires a different skillset to ensure the relationships are managed in the appropriate way.
Tip number three is for both sides to consider the characteristics of their relationship teams and objectively review their composition. Of course, apply in this process tips one and two : ask in all transparency the other side what they think of the proposed teams. Far too often a historic team, no longer fit for purpose, stays in place. That is not a great recipe for success – look at review and refreshing the team against current objectives.
Number Four – Invest time
We are all time poor – both at the client and in the law firm. But it is surprising to find that lawyers whose only contact with the client has been discussing legal work, claim that they have a good relationship. No they don’t. That is a supplier role. Developing a relationship requires the client to give time to make sure the external lawyer really understands the demands and priorities they have as clients. And for the law firm partner to invest non chargeable time in really understanding what the client need – on each matter and in terms of an ongoing and valuable relationship.
You cannot build a valuable and trusted relationship with a client if everything is charged for. Or if your only communication is on email. Go see the client in their offices regularly (even if it’s just to offer some “on -site” surgery time) and really get to understand their organisations and the pressures they are under. The reward for the law firm is huge – you will have a ready and sympathetic response if you have money worries about the relationship – see Tip 5!
It of course works both ways and clients can’t expect law firms to deliver to their expectations and support their strategy if neither have been clearly articulated on a regular basis.
Number Five – Be honest and clear about money
If you are not delivering on the above, imagine how it feels if the external lawyer is looking to increase prices – it looks like it’s all one way. But investing in your behaviour and in building a valuable relationship and then the client will be much more ready to explore the financial results that the firm is receiving. It is actually in the client’s interest that the relationship is sustainable and profitable for the law firm as well. Why? Because changing lawyers is a time consuming and costly process. The new lawyers will need to settle in, get to know all the various contacts and systems. It’s much better for the client to keep the existing advisers. And they know that means that it must be sustainably profitable for the law firm.
For the firms that is “doing it right” (see above!) it’s fine to raise fees as an issue with the client and work out what changes can be made. Sometimes it’s about changing working teams, leverage and processes, sometimes it’s about missing work types or rates. But you will both be on the same side looking for a solution.