July 5, 2006
You May Not Know Your Law Firm Has Been Fired
Surveys that place law firm firings in the 50 percent range just do not match up with the empirical evidence on the ground. Why?
It turns out that the corporate world does not really fire firms. They just spend less and less with some firms and more with others. The corporate world appears to consider less reliance on a particular firm the same as firing that firm. On the other hand, law firms do not think they have been fired. Many do not have systems that are sophisticated enough to signal a warning concerning declining activity with a particular client. For that matter, a decline in fees is often a lagging indicator. The rate of new matter additions is an earlier warning. A decline in incoming phone calls from a client may be the initial indication that your firm is on the outs.
Unfortunately, even the best customer tracking system is likely to sound the warning only after a client has already made a decision to reduce business with your firm.
So what is the answer? The answer is to be proactive. The most important thing you can do is be interested in your client and show that interest. One of the certainties in life and business is that change is constant. Your client’s needs, interests, and strategies can change at any time, but at a minimum corporations usually go through an annual re-examination of their strategic and operating plans. Find out what that planning cycle is for your important clients and get involved. Ask your client, “What kinds of changes are being considered, and can we be helpful to you regarding those considerations?” Understand your client’s key strategies and issues. Ask for an update from your client at least annually. Look for opportunities to reshape your services, processes, and engagement terms to support the company’s strategies and goals. Suppose, for example, the client discloses that the company’s current plan includes the objective to materially reduce legal cost. Ask the client for the tactics they are considering. Provide suggestions and ideas for their implementation. Suggest additional approaches to the same ends. Proactively put your law firm first in line to support the company’s efforts.
It is not a matter of just discounting fees. It is important to recognize that your objective for more partner income and your client’s objectives, even if to lower cost, are not adversarial. You can increase your share of the client’s business. You can increase the profitability of the work you do for your clients by increasing efficiency and effectiveness. You can help your client reduce the cause for claims and the need for legal services.
Contributions toward a client’s goals and opportunities are usually more valuable than problem resolution. You can accomplish your objective by helping the client achieve theirs. Be creative and put your firm on the client’s side. Become a part of the client’s team in pursuit of its goals and objectives, including a reduction in the client’s total legal cost.
Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.
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