Redwood Analytics

I recently read an interesting article by Chris Mondics in the Philadelphia Inquirer about how some area law firms have been able to hedge against the recession woes facing many of their peers by relying on recession proof practice groups, international expansion, and attentiveness to clients.

Well, if you didn't already open a Hong Kong or a Bejing office 18 months ago like Reed Smith, it's probably too late to use activity in Asia to hedge your bets now.  And if you don't have a robust energy or employment practice like Morgan Lewis to compensate for the downturn in financial services and real estate, then it's most likely too late to diversify and bail out your firm from the current economic downturn.  (Though this does remain a practical and advisable step - as Mr. Mondics mentions in his article, firms with a wide variety of practice areas, who don't rely on one single specialty, have generally fared better in the sluggish economy.)

But client service - there's something that any firm can focus on at any given time for measurable results.  There are a myriad of blogs dedicated to the subject - Leo Bottary's Client Service Insights, What About Clients? from Dan Hull, and Patrick Lamb's In Search of Perfect Client Service.

Previous MPI contributor Tom Collins even wrote about how improving client service can improve the bottom line and grow your firm through referrals and retention back in October of 2005!

One of those concerns is client service quality. We know from surveys that when clients consider service, it isn't the quality of the lawyer's work they talk about. They talk about poor billing practices, unreturned phone calls and their experience when visiting or calling the firm.

The firm administrator can have a big impact in these areas of client contact. If they do, it will put more income in the pockets of the owner/partners. It will improve client retention and development. Referrals will increase. The emphasis on quality will give the firm a competitive edge with prospective clients. Improved billing procedures will mean attorneys have to spend less time resolving billing issues and that means fewer adjustments and less rework. In short, quality service pays!

So how much does it pay to improve client service?  Research from the Redwood Think Tank has shown that regardless of firm size law firms, on average, lose work from existing clients at the rate of 1% per month.  We all know it's easier and more affordable to get new business from existing clients than to get new clients.  So just stopping the outflow of existing work through improved client service can have measurable results - what's 1% of your monthly revenue valued at?  Worth it to you?  Then consider these points to improve your firm's client attentiveness.

Communication

How often do you talk to clients?  I mean, really talk to them about their needs beyond current matters?  Firms focused on client service are communicating with their clients on a regular basis (monthly, semi-annually, etc) even when they're not billing hours or working on a current matter.  They recognize that their clients' needs are changing at least every 12-18 months, if not more frequently, in a changing economy.  Are you addressing your clients' needs for diversification by cross-selling?  The Think Tank's research has shown that the more practice groups that a client is involved with, the less likely they are to leave the firm.

Standards

Does your firm have standards for how quickly phone calls are returned and emails are responded to?  How incoming calls are handled?  How quickly time is entered and bills are sent out?  Little things like these make a big difference to clients when they are established and adhered to throughout the firm.

Fees/Billing

Lastly, I can't talk about improving client service without mentioning what we are hearing loud and clear from GCs and other law firm clients across the board.  Clients are looking for predictability and cost savings from their legal expenses.  What can your firm offer in terms of billing to satisfy that need?  Hmm... fixed fees come to mind.  Check out our series on alternative fees, Know Your Alternatives, for some insights into how to use fixed fees for both profit and client satisfaction.

These are just three ways- starting with the easiest to implement to the toughest - that you can be more attentive to your clients.  We'd love to hear from you in the comments - what are some other ways that are successful at your firm?