Opinion: Looking after number one

Andrew Dunn outlines four activities to support client and fee income growth.

Maintaining existing levels of fee income is difficult, but especially during a recession. Not only do law firms cut costs during a recession, but so do their clients, normally via reduced legal budgets. Many clients will also use the recession as an opportunity to review existing legal arrangements and re-pitch for work to drive down legal spend – the risk of client loss is higher than at any other time. This trend is compounded by the fact that many in-house legal teams will actively seek to reduce their spend by taking as much of the outsourced legal work in-house.
It is more important than ever to focus marketing on the number one priority – clients.

Client relationship management
Much has been written about client relationship management (CRM) and how important it is in stabilising client relationships. A poor CRM programme can be more damaging than none at all.
Some programmes are clearly little more than repetitive form filling exercises or thinly veiled sales campaigns – providing little insight into what the client really thinks.
If you want to do this correctly, it is worth spending your budget on ‘independent’ reviews. I have tried both internal partner-led CRM reviews and independent consultant-led CRM reviews, and the clarity gained from the latter is startling. Clients often feel more relaxed about giving feedback to people with whom they have no business relationship. In addition, these independent reviews are typically led by skilled interviewers familiar with spotting the key verbal cues during such meetings – enabling them to question the interviewee in greater depth. The typical costs for such reviews tend to be around £1500-£2000 per client, but when you compare this to the fees received, it really is a no brainer.
While marketing teams have a big role to play in creating and running such programmes, it is imperative that the managing partner is the internal face of the CRM programme – as this sends out the right message to the client and promotes internal buy in.

Effective secondee programme
An effective secondee programme is the most effective way to develop fee income with key clients and build existing relationships.
Many law firms still baulk at the prospect of ‘losing’ a fee earner for six months, but in most cases this is short-sighted. Yes, secondees can cause short-term resourcing problems, but during a recession it is perhaps less of an issue. However, look at the upside – good secondees can spread the word about your practice internally far better than any marketing campaign, and can assist internal legal departments in providing effective solutions to legal problems. A good secondee can also provide valuable client intelligence, allowing your legal offering to be tailored to the client’s needs.
However, it does come with a health warning – always pick the best quality secondee, as a poor secondee can harm the reputation of your practice. My advice is not to think ‘who would we miss the least’, but ‘who would we miss the most’, when selecting secondees.

Top-100 client analysis
Surprisingly, many large firms follow the Pareto principal, with 80 per cent of fee income emanating from 20 per cent of the client base – several large firms I know are more extreme than this and very dependent of a handful of key clients.
This analysis is often the starting point for any CRM programme, and the results enable management to focus their efforts on where the work is coming from. However this is simply stage one. The second and arguably most important stage is to break down these individual client billings by department. This analysis can be a very powerful tool as it typically shows that in many large firms less than 50 per cent of the total discipline lines are sold to even the major clients. This is a great cross-selling aid and can be very useful in identifying departmental barriers within your firm.

Be serious about added value
Most clients now operate a legal panel structure, but simply being on a panel is no guarantee of work. The firms who get the most out of panel appointments work the key client relationships hard and are serious about added value programmes. A well thought out added-value programme provides a genuine way of differentiating your firm from the competition, the best developing these in consultation with the client, and not just re-hash their standard offerings.

Andrew Dunn is business development partner at Begbies Traynor Group plc. He can be contacted at Andrew.Dunn@begbies-traynor.com