The Client Management Toolkit For Law Firms EDITED BY LAURA SLATER
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3 The Client Management Toolkit For Law Firms EDITED BY LAURA SLATER PUBLISHED BY IN ASSOCIATION WITH
4 Contents Executive summary... VII Part One: Client strategy Client strategy development... 3 By Andrew Hedley, director, Hedley Consulting Client push Law firm pull... 3 Client push... 3 The Association of Corporate Counsel (ACC) Value Challenge... 4 Global Leaders in Law (GLL)... 5 Law firm pull... 6 Fostering innovation as an essential ingredient of law firm strategy... 7 A Blue Ocean approach Using value curves to develop a client service strategy... 8 Segmenting services: Ensure your firm s services target client needs By Derek Klyhn, founding partner, Møller PSF Group, and Rob Lees, consultant to professional service firm leaders and former founding partner of Møller PSF Group Segmentation models BD by segment Competing across segments A quick reminder Strategic stages: An eight-stage integrated approach to business development By Derek Klyhn, founding partner, Møller PSF Group, and Rob Lees, consultant to professional service firm leaders and former founding partner of Møller PSF Group Traditional model A new approach From lead to sale Marketing and promotion Positioning and targeting Performance management Fees and profitability Integrated processes III
5 Contents Part Two: Business development Finding niches and developing your strategy By David H. Freeman, J.D., CEO of the David Freeman Consulting Group Defining and differentiating yourself Who are you and what do you enjoy? Develop your niche(s) Stand out to be outstanding Develop a personal scorecard Create personal deadlines Action planning worksheet The shortcut version: The mini-pitch and toolkit By Clare Adshead-Grant, founding partner, Calista The mini-pitch The pitching toolkit Be prepared A note on templates Relationship secrets: How to institutionalise new clients in 100 days By Ben Rigby, editor, CDR The law firm perspective What clients say Maintaining relationships Horses for courses How loyal is loyal? Holding out for a hero Part Three: Fees Designing an objective-orientated fee arrangement By Steven A. Lauer, principal, Lauer & Associates Before designing the fee arrangement Designing the fee arrangement Law department perspective Law firm perspective Linking project management to pricing strategy By Barbara J. Boake, partner, McCarthy Tétrault, and Rick A. Kathuria, national director, project management office and legal logistics, Gowlings Basic practice economics Maximise profitability through efficiency and leverage Managing AFAs Developing a strategy for better budgeting and negotiating By Sally Dyson, founder and director, Firm Sense Limited Taking stock Developing and communicating vision and strategy IV
6 The Client Management Toolkit for Law Firms Part Four: Client relationships All ears: Launch a firm-wide client listening programme By Sally Dyson, founder and director, Firm Sense Limited Programme design Implementation...74 Client listening: Suggested discussion topics Reaping rewards Ensuring that feedback is useful, user-friendly, and used By Tim Nightingale, founder, and Graham Archbold, research director, Nisus Consulting Limited Analysing free-form responses Analysing numerical data Visual representations of feedback results Reporting Framing recommendations Growth and development of the firm s online legal services By Stephanie Kimbro, fellow, Stanford Law School Center on the Legal Profession and co-director, Center for Law Practice Technology Marketing online legal services Website development Calls to action Blogging Case study: Jacoby & Meyers website offerings Social media integration Collaborating with branded networks Case study: Branded network in India Case study: Burton Law Client services: The in-house perspective on collaboration in law firms By Susan Hackett, CEO and CLO, Legal Executive Leadership, LLC Key impediments Improving collaboration Conflicts of interest By Tracey Calvert, owner and director, Oakalls Consultancy Limited Own interest conflict Client interest conflict The exceptions to not acting in a situation of client conflict A brief note on property work Establishing systems and controls Debunking the myths about conflicts of interest Are there any short-cuts to making the right decision? V
7 VI Cocktail of problems: The conflict between anti-bribery compliance and client service By Andrew Oldland QC, head of the Public Law and Regulatory Team, Michelmores Protecting your firm Facilitation payments Managing the risks New system needed...126
8 Executive summary THE DAYS when lawyers simply charged their standard hourly rate and clients paid up without question are long gone. Today, the power has shifted to the client who expects the firms they instruct to add value in a variety of ways, from the degree of commercial awareness they display to the range and suitability of fee arrangements on offer, or simply the passion individual lawyers show for the job. Those firms that respond to client demands for better value by simply knocking 20 per cent off the final bill are missing the point and making it increasingly difficult for the firm to maintain a profit. By contrast, firms that develop robust client management processes can differentiate themselves from their rivals and develop stronger, more profitable client relationships. The Client Management Toolkit for Law Firms focuses on four core areas of client management client strategy, business development, fees, and client relationships and discusses how firms can create resilient processes that will deliver ongoing profitability and growth. Part One explores the various forces pushing law firms to offer better, more innovative legal services. It discusses how a firm can respond, for example, by establishing the market segment(s) it competes in (or wants to compete in) and tailoring its services and its business development efforts accordingly. One of the chapters offers an integrated, eight-stage approach to client strategy, beginning with the firm positioning itself in its chosen market, through to creating a more competitive firm with above-average profits. In the current legal market, law firms and individual lawyers have to work hard to differentiate themselves, build their reputations, and market their services. Part Two of this report looks more specifically at a firm s business development efforts, including advice from well-known experts on how lawyers can stand out from the crowd. One chapter outlines how to manage the pitch process when new unsolicited opportunities arise. The author details the standard information that needs to go into your pitch toolkit to ensure a successful pitch that is tailored to the client, and a fuss-free process whether you are given a day or two weeks to prepare. The final article in this section focuses on the critical first 100 days of the law firm-client relationship and discusses the steps a firm can take, including setting internal benchmarks for standards of service and (appropriate) cross-selling of services, to ensure that a new client relationship becomes a long-term success story. Part Three covers a frequent cause of relationship breakdown between a firm and a client: fees. Firms inevitably face client requests for lower fees and pricing agreements, and these must be balanced with the firm s profitability targets. This section covers the most common forms of alternative and value fee arrangements and describes how to design an arrangement based around a clients value-drivers to provide a winwin for both law firm and client. Included in this section is a chapter showing how VII
9 Executive summary to apply project management techniques to your pricing strategy in order to identify and mitigate risks, and to ensure the highest quality work is delivered at the highest possible profit margin. The final chapter in this section outlines the changes that firms need to make in order to create an environment that supports best practice budgeting and negotiation. The way in which a firm approaches each of the first three areas discussed client strategy, business development, and fees will have an impact on the last focus area for this report: the client relationship. Part Four discusses how to engage with your clients and how to overcome lawyers innate reluctance to adopt some of the practices necessary in modern law firms, such as participating in client listening programmes, establishing a presence on the web, or collaborating better (both internally and externally with clients). Included in this section is practical advice on how to design, optimise, and implement a client listening programme suitable for your firm, and how to collate, evaluate, and present the data so that it will be accepted by partners, and put into practice. Finally, Part Four also offers practical guidance on the anti-corruption and compliance issues that affect the law firm-client relationship. This includes the procedures firms must have in place to recognise and avoid own and client conflicts of interest, and to ensure compliance with the SRA s outcomes-focused regulation. Another chapter discusses the latest international antibribery and corruption legislation and the pressure firms are now under from corporate clients to have solid procedures in place. Competition in the legal services market is increasing and law firms and individual lawyers need to do more to ensure they continue to stand out from the crowd. Most lawyers would say that they put their clients first, but it is only by putting the client at the heart of the firm s everyday activities, through the implementation of a successful client management programme, that lawyers can deliver the high-quality, tailored services necessary to continue to grow and thrive in the long term. VIII
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