<b><i>Voice of the Client:</i></b> Differentiation Through Better Client Connection

2015 has brought a new year with resolutions to begin new routines to achieve success. Recent economic reports for law firms tell the story of a legal economy that continues to face real change in the face of soft demand, even though there is increasing evidence of performance separation from some firms to others. (See 2014 Hildebrandt and Citi Advisory 2014 and Beyond: Embracing the New Reality, p. 2; The American Lawyer, May 2014, “The Super Rich Get Richer,” pp. 130,132.)

Even with optimism for the 2015 economy and recent positive law firm financial performance, the great recession has produced a “take-share” market that must be incorporated into the strategies of law firms and the routines and specific behaviors of the partners. We have to move beyond words to actions. For many, it is a time for real change. And it is a time to focus on new approaches to client relationships.

The Changing Marketplace

Law firms are not the first or only organizations facing competitive and disrupting pressures in their marketplace. Forces like basic supply/demand and disruptive technologies respect no boundaries, and the technology curve is impacting many businesses and services. Law firms have been historically more insulated than other industries (for a variety of reasons), which may set them apart in how they embrace and respond to disruptive pressures compared with other parts of the economy. But times are changing and firms need to consider client differentiation strategies ' one size won't fit all. Innovative firms will be rewarded with nurturing client relationships that drive growth.

The legal battle ground is shifting away from competition strictly on levels of expertise toward innovative delivery models, strategic focus areas, talent management, and client engagement strategies. In recent years there has been much discussion about new metrics in the industry, and specifically how to measure success in client relationships. Some examples include quality scores, brand strength, service and engagement indices. It is early innings yet for wide adoption of these types of metrics, but these measurement systems will support the elevation of leading law firms.

One example of a means of measuring ROI on the sales side is a new product introduced by my company, ClientVue,which offers a methodology for law firm sales effectiveness and has established a database of research reflecting the opinions of general counsel on how well law firm partners establish effective sales relationships with their clients. This methodology is based on sales measurement and assessment techniques that have proven successful in other industries, leading to stronger client relationships and stronger business development results ( i.e. , sales effectiveness). The research reviews findings from major categories evaluating sales success. Examples include understanding a client's business needs, finding innovative approaches to delivering value, sustaining and growing relationships, and measuring strategic communication, among others.

Primary Lessons

There are three primary lessons taken from the research. The first is that some of these activities are commonplace, at least in terms of industry discussion around client practices. That means that certain activities are expected by clients, but they will not likely differentiate a firm. However, the consequences of skipping them may be fatal to the relationship. Moreover, some firms perform these tasks better than others, and knowing how one stacks up against client expectations and competing firms is instructive.

There is a difference between individuals following mechanical approaches in contrast to those utilizing integrated systematic sales methods. The second lesson is that not all activities will produce equal returns for client development and in fact, some are counter-productive. Placing “bets” on your firm's sales strategy is important because you cannot be all things to all clients. Knowing where to focus and establishing priorities is a critical step.

The third and perhaps most important lesson is acknowledging the reality that understanding what to do is much easier than doing it. Executing these programs is difficult. Building client service programs requires a vision, a plan, cultural alignment, relevant metrics and leaders promoting and staying the course towards change, even in tough times.

Analyzing the Data

To provide more insight, we analyzed GC data by grouping responses into three main categories: 1) keepers ' those activities that are the required minimums; 2) opportunities ' those activities that may provide competitive advantage based primarily on addressing unfulfilled client needs; and 3) stoppers ' identifying those things that firms occasionally do that client find little value.

Keepers are the expected minimums ' things that most firms are doing with some frequency and quality and which are expected. These items provide entr'e to compete but do little to differentiate the firm. Examples include the following:

• Listening closely and recognizing the current need. Skills here used by lawyers are frequently honed and refined. Lawyers might be thought of as highly creative problem solvers which is terrific. The issue is dominantly differentiation as the competition is keen.
• Overcoming obstacles. An area that lawyers seem to relish, again falling into the hypercompetitive context.
• Having familiarity with clients and their business. Arguably an area where many lawyers and law firms have really polished their game over the recent years, but is becoming commonplace and undifferentiated, in spite of its criticality.
• Staying current with current conditions. A core necessity of practicing.

It may be of little surprise that many of the activities described above are widely accepted and commonplace since they fall into what we might consider the “sweet spot” for lawyers ' highly skilled, focused problem-solving activities. Lawyers enjoy taking on intellectual challenges and showing their prowess. In many instances, it may be how they want to be known. Since these areas might be crowded with competitors, however, the challenge here then may be to find ways to differentiate, which could mean looking to innovate around the substance, perhaps using digital delivery or creative service packages. These ideas are only the simplest of examples, but the point is recognizing the nature of the competitive strategy based on the opportunities and data presented.

Opportunity gaps are those things that most firms do not do with frequency or effectiveness but that the clients find important. It follows, therefore, that those firms that can operate well at the core but can find opportunity gaps to excel will find competitive advantage. Examples include:

• Sizing up the need. Many firms respond laser-like to client needs but since many firms have developed competencies here, they all look the same. Firms need to look for ways to differentiate, going beyond the current situation, anticipating and looking forward. Firms need to earn the right to be a partner while looking for ways to expand that partnership. Without systematic team-based approaches, it becomes a difficult challenge. Individual rainmakers may be a core asset, but the use of those partners supercharged with an integrated team can take firms to greater heights.
• Offering value and solutions. Key issue here is differentiation. Firms must find a way to be innovative, looking beyond the substance as the minimum level for consideration. Look towards the delivery methods or innovations around the substance as the tactics to deploy.
• Engagement and sustaining the relationship.
• Communication and strategic planning leads to partnership.

The lasts group of GC replies fall into the category we call stoppers. These are things that either provide no or possibly negative value in their performance. They are ineffective behaviors (at least through the eyes of clients) and consequently might be counterproductive to advancing the relationship. Examples are not surprising but what is, is how frequently partners still use these tactics ' like emphasizing the unique qualities of your firm in a vacuum aside from the core needs of the client, or one-sided communication practices.

Implementing Systemic Change Toward Client Development

While the deployment of new systematic ways of connecting to the client are broader than the space this article will permit, there are certain things that firms need to do in order for these initiatives to take hold. Dr. John Kotter introduced his eight-step model toward change in 1996 (see http://bit.ly/1BieQDU) outlining the major steps toward change. His model is widely accepted today. All steps of Kotter's model are recommended to institute an execution paradigm for long-term permanent change. However, the threshold step toward change is to ensure that the partners involved have recognized the need for change ' principally the need/desire to develop stronger client relationships and to achieve business growth. Absent this foundation, it will be a truly uphill battle to produce the small victories needed to develop momentum to the larger successes and achieve the overall vision. This is real work that will require staying-power and resiliency.

Conclusion

In times of slow growth, it makes sense to get closer to the client. And our hope is that many firms will get closer to the client utilizing even smarter approaches, while offering innovative value to generate the next wave of growth.

Mark Medice, JD , is the CEO of ClientVue. He may be reached at 412-203-2155.

2015 has brought a new year with resolutions to begin new routines to achieve success. Recent economic reports for law firms tell the story of a legal economy that continues to face real change in the face of soft demand, even though there is increasing evidence of performance separation from some firms to others. (See 2014 Hildebrandt and Citi Advisory 2014 and Beyond: Embracing the New Reality, p. 2; The American Lawyer, May 2014, “The Super Rich Get Richer,” pp. 130,132.)

Even with optimism for the 2015 economy and recent positive law firm financial performance, the great recession has produced a “take-share” market that must be incorporated into the strategies of law firms and the routines and specific behaviors of the partners. We have to move beyond words to actions. For many, it is a time for real change. And it is a time to focus on new approaches to client relationships.

The Changing Marketplace

Law firms are not the first or only organizations facing competitive and disrupting pressures in their marketplace. Forces like basic supply/demand and disruptive technologies respect no boundaries, and the technology curve is impacting many businesses and services. Law firms have been historically more insulated than other industries (for a variety of reasons), which may set them apart in how they embrace and respond to disruptive pressures compared with other parts of the economy. But times are changing and firms need to consider client differentiation strategies ' one size won't fit all. Innovative firms will be rewarded with nurturing client relationships that drive growth.

The legal battle ground is shifting away from competition strictly on levels of expertise toward innovative delivery models, strategic focus areas, talent management, and client engagement strategies. In recent years there has been much discussion about new metrics in the industry, and specifically how to measure success in client relationships. Some examples include quality scores, brand strength, service and engagement indices. It is early innings yet for wide adoption of these types of metrics, but these measurement systems will support the elevation of leading law firms.

One example of a means of measuring ROI on the sales side is a new product introduced by my company, ClientVue,which offers a methodology for law firm sales effectiveness and has established a database of research reflecting the opinions of general counsel on how well law firm partners establish effective sales relationships with their clients. This methodology is based on sales measurement and assessment techniques that have proven successful in other industries, leading to stronger client relationships and stronger business development results ( i.e. , sales effectiveness). The research reviews findings from major categories evaluating sales success. Examples include understanding a client's business needs, finding innovative approaches to delivering value, sustaining and growing relationships, and measuring strategic communication, among others.

Primary Lessons

There are three primary lessons taken from the research. The first is that some of these activities are commonplace, at least in terms of industry discussion around client practices. That means that certain activities are expected by clients, but they will not likely differentiate a firm. However, the consequences of skipping them may be fatal to the relationship. Moreover, some firms perform these tasks better than others, and knowing how one stacks up against client expectations and competing firms is instructive.

There is a difference between individuals following mechanical approaches in contrast to those utilizing integrated systematic sales methods. The second lesson is that not all activities will produce equal returns for client development and in fact, some are counter-productive. Placing “bets” on your firm's sales strategy is important because you cannot be all things to all clients. Knowing where to focus and establishing priorities is a critical step.

The third and perhaps most important lesson is acknowledging the reality that understanding what to do is much easier than doing it. Executing these programs is difficult. Building client service programs requires a vision, a plan, cultural alignment, relevant metrics and leaders promoting and staying the course towards change, even in tough times.

Analyzing the Data

To provide more insight, we analyzed GC data by grouping responses into three main categories: 1) keepers ' those activities that are the required minimums; 2) opportunities ' those activities that may provide competitive advantage based primarily on addressing unfulfilled client needs; and 3) stoppers ' identifying those things that firms occasionally do that client find little value.

Keepers are the expected minimums ' things that most firms are doing with some frequency and quality and which are expected. These items provide entr'e to compete but do little to differentiate the firm. Examples include the following:

• Listening closely and recognizing the current need. Skills here used by lawyers are frequently honed and refined. Lawyers might be thought of as highly creative problem solvers which is terrific. The issue is dominantly differentiation as the competition is keen.
• Overcoming obstacles. An area that lawyers seem to relish, again falling into the hypercompetitive context.
• Having familiarity with clients and their business. Arguably an area where many lawyers and law firms have really polished their game over the recent years, but is becoming commonplace and undifferentiated, in spite of its criticality.
• Staying current with current conditions. A core necessity of practicing.

It may be of little surprise that many of the activities described above are widely accepted and commonplace since they fall into what we might consider the “sweet spot” for lawyers ' highly skilled, focused problem-solving activities. Lawyers enjoy taking on intellectual challenges and showing their prowess. In many instances, it may be how they want to be known. Since these areas might be crowded with competitors, however, the challenge here then may be to find ways to differentiate, which could mean looking to innovate around the substance, perhaps using digital delivery or creative service packages. These ideas are only the simplest of examples, but the point is recognizing the nature of the competitive strategy based on the opportunities and data presented.

Opportunity gaps are those things that most firms do not do with frequency or effectiveness but that the clients find important. It follows, therefore, that those firms that can operate well at the core but can find opportunity gaps to excel will find competitive advantage. Examples include:

• Sizing up the need. Many firms respond laser-like to client needs but since many firms have developed competencies here, they all look the same. Firms need to look for ways to differentiate, going beyond the current situation, anticipating and looking forward. Firms need to earn the right to be a partner while looking for ways to expand that partnership. Without systematic team-based approaches, it becomes a difficult challenge. Individual rainmakers may be a core asset, but the use of those partners supercharged with an integrated team can take firms to greater heights.
• Offering value and solutions. Key issue here is differentiation. Firms must find a way to be innovative, looking beyond the substance as the minimum level for consideration. Look towards the delivery methods or innovations around the substance as the tactics to deploy.
• Engagement and sustaining the relationship.
• Communication and strategic planning leads to partnership.

The lasts group of GC replies fall into the category we call stoppers. These are things that either provide no or possibly negative value in their performance. They are ineffective behaviors (at least through the eyes of clients) and consequently might be counterproductive to advancing the relationship. Examples are not surprising but what is, is how frequently partners still use these tactics ' like emphasizing the unique qualities of your firm in a vacuum aside from the core needs of the client, or one-sided communication practices.

Implementing Systemic Change Toward Client Development

While the deployment of new systematic ways of connecting to the client are broader than the space this article will permit, there are certain things that firms need to do in order for these initiatives to take hold. Dr. John Kotter introduced his eight-step model toward change in 1996 (see http://bit.ly/1BieQDU) outlining the major steps toward change. His model is widely accepted today. All steps of Kotter's model are recommended to institute an execution paradigm for long-term permanent change. However, the threshold step toward change is to ensure that the partners involved have recognized the need for change ' principally the need/desire to develop stronger client relationships and to achieve business growth. Absent this foundation, it will be a truly uphill battle to produce the small victories needed to develop momentum to the larger successes and achieve the overall vision. This is real work that will require staying-power and resiliency.

Conclusion

In times of slow growth, it makes sense to get closer to the client. And our hope is that many firms will get closer to the client utilizing even smarter approaches, while offering innovative value to generate the next wave of growth.

Mark Medice, JD , is the CEO of ClientVue. He may be reached at 412-203-2155.