February 15, 2007
Protecting the Law Firm's Reputation
The Harvard Business Review’s February 2007 issue included a scholarly article dealing with protecting a business’ reputation. The authors noted that firms with a strong positive reputation attract better people, can charge a premium for their services and products, and enjoy greater client loyalty.
The Catch 22 is that the more important your reputation is, the more vulnerable it is to anything that damages that reputation. So what proactive measures can you take to protect this extraordinarily valuable firm asset? After-the-fact crisis management is not the answer. Actions taken at that point are attempts to minimize the damage already underway.
Start by assigning someone the responsibility for managing the risk. It starts by monitoring and intellectually questioning three important aspects of the risk and then mobilizing coordinated efforts through the firm leadership to head off threats that appear on the horizon.
We are always judged by others—clients, vendors, employees, peers, competitors, etc. What we are is determined through their eyes and not our own. The responsible individual should take steps to track through various means the three aspects of reputation risk listed below. Report to the leadership and recommend prophylactic measures where appropriate. The three areas are:
Reputation Gap: How are we perceived by those who judge us versus our reality? The greater this gap, the greater the risk. Action is needed to change the perception or the reality to close the gap. A failure to live up to inappropriate reputation can be as costly to the firm as a failure to live up to the reputation you previously earned. Likewise, the failure of the public to give the firm due credit and market position means it will not get the business it should have and is likely to attract the wrong prospective clients.
Changing Expectations: How are the standards of those who judge you (and enterprises like you) changing? Are tastes, ethics or values changing? Are clients changing what they look for in terms of how they relate to their providers? What about the things they value most? Is it loyalty, responsiveness, friendliness, or other things? Do they want to socialize or get right to business? Do they value gray hair or youth? Do they want to do business by phone, email, or in person? Do they expect a center city premium location? Is convenience or prestige more important? Failure to see changing preferences in our fast-paced times can erode your reputation in a few short years. How quickly did your law firm embrace e-mail or the growing expectations for law firm web sites? Do your attorneys understand the expectations of the Generation X and Generation Y clients that will replace your baby boomer clients as they leave the scene?
Organization-Wide Coordination: Once we understand the reputation we have and want, the next question has to be, are we acting in accord with that reputation? Is every department and every individual aware of our reputation goal and performing accordingly? Do our phone handling practices reinforce our image or bring it into question? How about how we receive visitors to the office? Are our communications with clients consistent with our image? Do our couriers represent us consistent with our reputation? Do we have partners, associates, or others who aren’t on board?
In most firms, risk to reputation is not currently managed. Responsibly has not been assigned. Those who enjoy a stellar reputation should take note: their most valuable asset will always be a risk. The first step in managing that risk is to put someone in charge.
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Filed under Risk managment by Tom Collins
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