Masterclass: Capitalising on client relationships

Increasing the efficiency of existing business relationships and resources is critical in a cooling economy. Katinka Nicou and Jane Black reveal how firms can use the client-relationship cycle to accelerate competitive advancement.

The current business downturn opens up a window to review how firms are building sustainable relationships with clients from a whole firm perspective. In equal partnerships specifically, it serves all equity owners to collaborate in client pursuits, yet a few firms still do not subscribe to the most basic best practices in business development. Business development is largely a responsibility senior lawyers take on individually. This not only limits their capacity and potential to be successful in all client-related activities, but it also inhibits identification of possibilities for cross-marketing.
And yet this is an ideal time for law firms to systematically share knowledge, experience and best practices across practice groups. It is the time to coordinate business development efforts by identifying and leveraging individual lawyers’ strengths and collaborating to identify opportunities for the firm. It is also time to develop strong relationships with the media, as positive public recognition for newsworthy work that may result from the economic crisis is more valuable than any advertising campaign. Moreover, it is critical to ensure that marketing messages are consistent among individual lawyers and practice groups to create strong brand recognition among clients.
Tactical tools to win new business abound, but few of them are taken into consideration with overall business strategy in mind, or in a coordinated team effort. The ‘client relationship cycle’ framework in Figure 1, offers a strategic approach to business development, supporting practice groups and individual lawyers in defining their unique value-proposition, identifying new opportunities in current markets or emerging practice areas, capturing these opportunities, and gaining media exposure. It acts as a strategic planning guide, with very specific check points and action steps:

Action step one: Your value
What sets you and your firm apart from your competition? Firms’ expertise is constantly evolving due the nature of the work instructed by clients. Significant areas of expertise held by particular key individuals will also shape the firm’s offering. Therefore it is helpful to continually review what is considered to be your firm’s unique value proposition. Is it the particular expertise you provide, your presence globally or locally, the depth of your firm’s network, the resources that you can deploy, or your staff? Whatever it might be that differentiates you, in the eyes of your client this is your brand identity. Would each area of your business demonstrate the same identity?

Action step two: Opportunity
With a defined value proposition, you need to be clear about whom and what to go after. There must be obvious transparency about your business drivers. It builds trust and respect as it suggests clarity of identity and mission. First, developing expertise in a critical area creates focus. Be known for something significant, and known well. Second, focusing on a defined industry or market segment deepens the perception of your offered expertise and you will naturally develop a reputation in the field around your value. Third, be careful not to narrow your specialism too far. Manage the risk through a diversified client base. It is useful to consider the identifiable characteristics and measures that your firm currently uses to assess new and ongoing opportunities.

Action point three: Be proactive
Once you are clear about your opportunities, it is time to consider where to focus your business development activity. In time-pressured law firms, we see a common pattern of ad hoc marketing efforts only when a time slot opens up. But a clear plan with defined action steps that is factored into a lawyer’s work-week, and flexible to schedule changes facilitates ongoing proactive efforts and sustains a wide pipeline of prospective clients. Such a plan of targeted outreach and weekly activities helps you stay ahead of your competitors in communicating your services to current and potential clients.
Consider what proactive marketing activities would be suitable for your services. It could be publishing articles or case studies, giving speeches and participating in panel discussions or attending and sponsoring client industry events. But how do you make sure the most relevant of such opportunities come your way? First, determine through which media you should seek exposure. Keep a list of relevant business and trade publications that your prospective and current clients read. Make a routine of scanning their editorial calendars for information about upcoming features. This gives you an angle to approach the publication and offer them an editorial contribution. Second, decide at which events you should be present. Make sure you use your time and money wisely by attending only the most relevant client events. Ask clients with whom you have a strong relationship to recommend opportunities for you to deepen your understanding of their industry or offer an introduction to your area of expertise.

Action point four: Contact
Once your firm is clear on its business development approach and the opportunities that present themselves, it is time then to review your contact policy. Consider how you currently contact and capture prospective clients and who within the firm is best at doing this. Too often, firms use literature, such as case studies, to do the talking. But to really create an impression and open an opportunity to engage in dialogue, firms must use their most expensive assets: their staff. Cold calling, by nature, tends to be the most time-consuming path to business relationships in the legal sector. Those responsible must go into conversations with quality questions, following up on valuable case studies and articles that have been sent in advance.
Consider also the three most common scenarios where your firm comes into contact with potential new clients. Are they viewed as opportunities? Business development has moved on from the latter day hard-sell but any opportunity should be actively developed using sophisticated approaches that are consistent across the firm and regular in occurrence. Consistent activity will bring consistent results. Avoid business peaks and troughs experienced by those firms that only apply prospecting activity in a downturn.

Action point five: Interaction
When considering why your clients work with you, think about what it is that they value about you and what might be the determining factors that make them come back to you. Is it because of your personal expertise? Is it your firm’s specialist knowledge? Is it the speed with which you deliver services? If it is any of these things, there may be one vital factor that is missing. Your clients should engage with you because of how they perceive you, not your deliverables. For example, many firms are retained because of their specialism, with the relationship being seen as purely transactional. Other firms are perceived as business consultants, working with clients to achieve their objectives. The most highly-regarded firms, however, and the most successfully retained, are those that are regarded as trusted advisers, as partners, sitting alongside their clients. Trust is key, enviable advantages come from it, but is also the most perishable business asset that you own.
So how can you develop trust and be known as a true partner and adviser? Go into every client engagement with detail concerning the client, their priorities, their clients, you and your team. Build credibility early by citing relevant examples. Move quickly into your clients’ world and consider their observations from that position. Ask well-selected questions. Demonstrate your true understanding and your ability to listen closely by summarising their thoughts. Avoid offering suggestions too early; help them but do not lecture. Use the benchmark – if I did not have any services to offer, would this client still hire me for these dialogues?

Action point six: Agreement
Your clients’ values will drive their decisions. The more skilled you are at reading how your clients process information, the faster you will be able to reach agreements and secure their loyalty. Establish what is important to the prospective client. Once you know their criteria, ask them to prioritise so that you can lead them further towards a decision. Ask questions such as ‘within these specific circumstances and budget, what would you most like to achieve?’ Since you may not be aware of everything going on in the client’s context that impacts their decision, ask open questions such as ‘is there anything getting in the way of your making this decision?’ and ‘what exactly are you uncertain about?’
Deal with the things that make you uncomfortable early. In the case that there is a specific opportunity on the table, always talk about the price within the first three meetings. The sooner you talk about price, the less it is subject to negotiation later on. Act as the project manager and show the client that their project is in good hands. Make it as easy as possible for the client to hire you with a clear proposal that pre-empts further questions. If you have done well in the interaction phase, this will be easy for you.

Action point seven: Action
By reaching agreement with the client to serve them, you have moved from the interaction to the action phase. This is where the relationship deepens. By keeping the client informed on activities and people involved, you ensure that they feel in control of the process. Make sure you assess the level of detail your client wants, as this may vary substantially. When you are not actively updating the client, be accessible for information. Make sure that they receive the right level of education about the expertise you are applying to understand the value that you add. Is there anything you can help the client learn or develop from this engagement that will serve them in the long-term? Schedule as many in-person meetings and brainstorming sessions as the client deems useful. Learn and adapt to the client’s communication preferences. When the process requires sequential decisions, lead the client’s thinking by offering ideas and options that you have prepared beforehand, and any appropriate additional levels of analysis that your competitors may not have.

Action point eight: Completion
The completion stage is a critical moment to reinforce the value of your services and make the client feel valued. Additionally, if anything went wrong in delivery, you need to find out and address it immediately or you risk having made a negative impression on the client which will hold them back from hiring you again, or worse, give you a bad reputation. How do you handle deliverables? Is there a presentation or simply a handing over of documents? Make sure that this is a memorable event. At every level of complexity, each transaction should involve a closing ritual to honour the client relationship, whether it involves sending a thank you gift or hosting a formal client dinner. Also, make sure feedback has been received before the final bill is submitted. Schedule a follow-up date to speak with or meet the client again to assess their progress.

Action point nine: Reaction
The follow-up phase should take up 25 per cent of your client relationships. An old expression ‘the sale begins once the sale is made’ is more valid now than ever before. It is the follow-up process that leads to recommendations and new opportunities. A successful completion of a client engagement and a follow up process that reinforces your unique value proposition, make the client your ambassador, which in turn strengthens your client pipeline without further marketing investment. Analysing the number of references and introductions gained by your people as a performance indicator will strengthen the latter stages of the client relationship cycle for your firm.
Towards the end of an assignment, teams should be considering future projects and what questions they should be asking to explore further opportunities. This is achieved through inviting regular and open dialogues and presents endless opportunities to probe further about client objectives and requirements. From a firm-wide perspective, there may be elements of this client engagement that enhance your value proposition.

Client is king
The more effective you are in each phase of this cycle, the easier it is to move relationships from one phase to the next. What is your strategy for moving from transactional relationships to partnership status throughout the process? Consider your list of prospective, current and former clients and what actions you can take to move each of them to the next phase in the cycle.
It is unlikely that every partner will be equally adept at publishing, speaking, networking, negotiating, building relationships, collaborating and following up with clients. The most effective way to win business and expand your share of clients’ legal services needs is to leverage the strength of individual lawyers and take a coordinated approach to moving clients from one phase of the client relationship cycle to the next. A strategic and consistent approach to business development that involves multiple levels of the firm’s lawyers will ensure a continued pipeline of prospective clients, as well as an effective ambassadorship among current and former clients.

Katinka Nicou is executive coach and founder, and Jane Black is a consultant at organisation and leadership development consultancy Integrate OD. They can be contacted at nicou@integrateod.com and jane.black@integrateod.com respectively.