Managing the Sophisticated Client’s Expectations: Part One

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by Patrick J. McKenna and Ronald F. Pol

It is reported that a major law firm has been dropped from the approved list of a Fortune 500 company due to a lack of satisfaction with the relationship. For many law firms this is not an isolated instance. We regularly work with firms who share their tales of woe – often only after discovering they are no longer a client's preferred choice.

Notwithstanding expressions of disbelief from some lawyers, changing law firms is seldom something that corporate counsel undertakes lightly. It is time consuming, often creates disagreement and even dissent within the legal department, and takes senior people away from their main focus of running the legal function, and the business. But, obviously some clients reach the point where they believe that their lawyers don't manage the relationship at all well – and fail consistently to deliver value.

The most recent BTI survey of Fortune 1000 companies confirmed that, mostly, clients weren't just looking for legal skills as the key to satisfaction because they believe that they can get the legal skills they need at most good firms. But what clients can't seem so readily to find is genuine client service – the effective delivery of those skills in a way that demonstrates value. Moreover although most lawyers are genuine in their desire to deliver client value, clients have reason to believe that their lawyers don't listen to their concerns – or don't care. Surely if their lawyers really cared, they would do something about rectifying the client's perceived dissatisfaction?

The all too common advice offered by consultants and other advisors is that firms should get serious about regularly seeking their client's opinions of how well they are delivering their services and managing the overall relationship. If law firms would simply make it a habit to survey or get out and talk with their clients on a regular basis (and especially at the conclusion of every major transaction) about the level of service being provided; and then act on what the client tells them, the firm would not be vulnerable to losing these clients. While this sounds eminently reasonable at first blush, is it really at the heart of managing a client's satisfaction and delivering value?

First off, many law firms will quickly claim that they “pretty much do that stuff anyway.” The lawyers may be described as extremely confident in their belief that they know exactly what their clients really want. Yet many of their clients appear not to experience the relationship the same way the law firms describe it.

Secondly, when was the last time you ever verbally complained about a perceived lack of service that you experienced? It's not a natural or comfortable thing for many of us to do. Many in-house counsel feel the same way, so you can't assume that no complaints means satisfied clients. (It goes against the grain for many people, but for your business' sake you may come to appreciate those of your clients who really do let you know just how they experience your services – the good and the bad).

You may think it unfair, but your client may feel no obligation to be candid with you about the level of their dissatisfaction. Only a small minority are vocal complainers who give warning of their unhappiness and they often feel even more frustrated when firms don't seem to listen. (A number of fellow in-house counsel have conveyed to Ron, “If I told them once, I've told them a thousand times, so why don't they get it?”) You can't rely on hearing about complaints in order to assess the efficacy of service delivery. Many dissatisfied clients will simply vote with their feet and you may only find out after the fact. Perhaps to soften the blow, the client may allow you to respond to an RFP, but your chances of winning may be next to nil. The client's views are shaped by their past experiences, and their expectation (based on that view, with nothing to suggest otherwise) that you won't change, so client surveys or future promises become a poor form of counter argument.

Thirdly, clients sometimes fail to express the real essence of their discontent. They might express it in apparently specific terms – e.g. ‘you don't meet our requirement to return our calls within two hours' – and may genuinely think that that's the issue, yet the essence of the complaint may lie elsewhere. This is particularly significant if the firm (apparently justifiably) considers the complaint to be without merit – e.g. “we often can't call back to one client representative, because we spend so much time at the client's own offices, and we don't disrupt our work for the client by taking calls - and by the way, the client's always calling to explain in minute detail about every little thing.”

If the client fails to express it clearly, the real complaint might never surface – e.g. “we feel that you just don't understand us. We try to help you out by calling to carefully explain each instruction, but you seem never to be interested.” Without delving deeper than what the client says in reply to regular surveys, it may be little wonder that the client walks, and that the firm genuinely doesn't know why.

Finally and most importantly, it becomes awfully difficult to survey and measure your client's satisfaction in hindsight, if you never determined up-front the basis upon which the client's satisfaction would be determined. In other words, it is a bit like having someone come down the hall, at the end of the year, to offer you a performance appraisal. What is the foundation upon which your performance will be appraised? Hopefully, it will be based upon some performance indicators that had been established and that you willingly agreed with, at the beginning of the year.

In short, client surveys are valuable, but no panacea. They mostly have you looking backward – yet looking forward from the outset provides the best view.

So, when you think about it in those terms, how do we even attempt to measure our client's satisfaction at the end of an engagement? What is it that we are measuring? And how do we know that what we are measuring is of any importance whatsoever to our client (because some consultant provided you with their standard template of the questions to ask)?

The Key Lesson: More important than determining your client's satisfaction or the value of your services after the event, is to agree in advance on the key elements that will determine satisfaction and value. From the firm's perspective, this might be seen as helping shape your client's expectations. From a client's perspective, it might be seen as identifying, from the outset, what will add value to the client. Same thing? Maybe. Valuable to both? Absolutely.

How Client Focused Are You Really?

Whether we like it or not, we are going to be measured by our clients. The good news is that we can affect the measurement process.

However, if we take a passive approach, the measuring stick against which we will be measured will be exclusively a creation of our client and likely imposed upon us. Alternatively, most in-house counsel and sophisticated clients would be delighted if their lawyer approached them at the outset of a matter, to discuss ways in which they could determine and provide value.

There are a lot of reasons why most lawyers don't bother – we're too busy to invest the extra time that it would take; there are no billable hours involved in doing it; we might be afraid to 'stir the pot;' and perhaps if we don't talk about it, then maybe it ain't really broke.

The not-so-good news is that the prevailing view among sophisticated corporate counsel would seem that it is broke. As reported in Corporate Legal Times, in a June 2003 editorial entitled, “Find Time To Whip Outside Counsel Into Shape,” law firms continue to be accused of “failing to understand their clients' basic needs” and doing a “dismal job in communicating with clients and evaluating whether or not they are meeting client expectations.”

As a law firm partner reading that editorial, you would likely be incensed. Like many of your colleagues, you would genuinely consider yourself client-focused - in fact, so much so, that we expect that you would argue that you diligently meet every demand, and even every whim, of each of your many clients.

An analogy that might help provoke your thoughts; is that of a wagon-wheel.

Say you have 10 major clients. You complete invoices in a particular way to satisfy the expressed wishes of client A. You record time in a special way for client B, with narrations for each entry that match their reporting systems. You provide 1-page advice letters for client C, with draft board papers from time to time. For client D you provide data that fits in with their matter management system. Client E wants you to send bills on the second Tuesday of the month, so that's what you do. Then there is client F, for whom you attend the legal team's monthly group meetings, and visit their factories whenever you're in town. Likewise . . . for every demand, for every request, for every client.

You might well say "Whaddya mean, I'm not client-focused?, I'm so client focused, there's only 6 hours a day I don't give to clients, and I really do need to be able to get at least a couple hours of sleep, most nights."

Yes, in a sense, you are client-focused. And we're not suggesting you shouldn't do what your clients need. But maybe we should step back a moment. Look at it like a wagon-wheel.

We're talking about you, so you're the hub of the wheel. The demands of each of your individual clients represent the spokes. Say 20 spokes (some clients have one or two special things they require of you - and we can all think of a few clients who are really demanding). Now, instead of focusing on the spokes, what if you tried to identify what clients are REALLY after, in a more general sense than the specific ‘spokes'?

First, it might be reasonable to assume that clients mostly don't ask you to do all these things just to annoy you, or just for the fun of watching you run around chasing your tail. They do it because they need to have you demonstrate value, and your current systems aren't doing it for them, so they've come up with ways that they hope will help force you to do things in ways that will help them demonstrate the value of the legal process. Chances are, even the most demanding clients – (for whom you half expect their next request will be for your invoices to be in a particular typeface) - are not actually obsessed with the spokes themselves – they're simply trying to get you to do a few simple things toward delivering better value.

So, take a breath from all the running around, and think, what is it that clients really want. We believe it boils down to three main things: they need (and want) you to:

  • Identify what adds value (to the client)
  • Deliver that value
  • Demonstrate that you have done so.

That is what THEY need to do in their role within the organization, And it's what they need YOU to do. This is something that you have a shared interest in. What better basis for real teamwork? If they don't think you're doing it, they come up with these ways of trying to force you to do it. And they're all different. Some do lots of research. Some do what seems right. And some are just plain crazy. But what it often means is that you have to run around like a chicken with its head cut off. Well, perhaps you just think you have to. Maybe you just think that's what it means to be client-focused.

Instead of looking to the spokes (yep, back to the analogy), try to find the rim of the wheel. If you find what most clients are pretty much after (say, the three things we mentioned earlier), and you actually set out delivering it to them, then you might just find that most of the spokes fall away. Sure, some will remain. But mostly they'll be the most basic 'process' ones (e.g. client G needs you to send a copy of the invoice separately to the legal department and to the accounts payable department, and both need to approve independently for the client's accounts system to go 'snap' and to generate a check - Sure you'll still do that one, right?!) And anyway, for this analogy to actually work, you still gotta have like 3 or 4 spokes minimum, else the wheel will collapse and our metaphor will crash with it.

When he managed the major litigation and dispute resolution function of New Zealand's largest listed company, Ron used to tell his outside lawyers:

Obviously, I've put lots of work into getting a system that addresses my needs; into getting this right. So I must care passionately about the process, right? I must care passionately about the specific invoice format and other criteria that I've developed, right? Wrong.

Sure, if we're going to do it, I expect you to get it right. But in the broader sense I care about it not one bit. If anything, I dislike it with an intensity matched by the frustration that caused me to do something, anything, to try to force you to do three simple things that I've been asking you to do for ages - help me identify what adds value, deliver that value, and demonstrate the value added - in terms that matter to us as the client.

Now, do I think my system is perfect? Far from it. I'm sure someone else could come up with a better one. But no one has, at least not that I know about. You haven't done so, or if you have, you've kept it a secret. No law firm has done so, that I'm aware. So it's really just the best I could do, on my own. I won't even cling to 'my' system out of spite. Even now, if any law firm can come up with a simple system that does those three things, I'd drop my requirements in a nano-second.

And he was quite serious too - but of course, as he reports it, none of the firms ever did rise to this challenge. Instead, they just met the client requirements, i.e. as yet another 'wagon wheel spoke' – often after putting up lots of resistance either simply meeting the new requirements, or seemingly 'gaming' the new system for all they were worth - later seeking to justify ‘premiums' and defend ‘discounts' without ever really trying to look at value.

To determine what and how to add value to your clients, read Part II of this article next week...

Copyright 2004. Patrick J. McKenna and Ronald F. Pol

Patrick J. McKenna is a partner in Edge International where since 1983 he has worked exclusively serving law firms and has worked hands-on with at least one of the top ten largest law firms in each of over a dozen different countries on issues associated with developing competitive strategies, improving profitability, client service excellence, and systems for effective practice group governance. He is available at [email protected]

Formerly Corporate Counsel with Telecom, New Zealand's largest listed company, Ronald F Pol is President of the Corporate Lawyers' Association of New Zealand (CLANZ), general counsel of Simultext Limited, and a member of the governing Council of New Zealand's Law Society. He is available at [email protected].


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