Law firms are making headlines around the world for all the wrong reasons: Fallen icons, failing business models, fateful mergers, external investment and more. And in all this hubris scarcely a mention of clients. That's why Ron Friedman's piece on the imperative to improve value to clients caught my eye this week:Improving value to clients "means understanding client expectations and changing how lawyers practice and the firm operates". While there is nothing revolutionary in this thought, the very fact that it warrants re-stating makes the point. Most law firms are still operating in a sellers' market paradigm.
To continue with Ron Friedman's post: "Three news items drive home this point. The New York Times editorial, The Cautionary Tale of Dewey & LeBoeuf notes that large firms face “more competition from firms abroad and newcomers to legal work", a move of work in-house, and clients who “are increasingly aggressive about keeping fees down and asking firms to share risks”. That BigLaw market pressures make it to the op-ed page of the Times tells us a lot.
Today, Patrick Lamb of Valorem Law, in his New Normal column in the ABA Journal, writes “Skilled judgment must be delivered efficiently. Clients care what service costs—even skilled service. Clients want service to be delivered predictably.” He likens a good lawyer to a symphony conductor who causes “other lawyers and third parties to work efficiently and effectively together to produce results at a cost known to and approved by the client.”
The Times summarizes the pressures and Patrick explains how service delivery can respond to the pressure. But the managing partner of Seyfarth, J. Stephen Poor, in the Monday Times Dealbook Blog post, Re-Engineering the Business of Law, illustrates that making these changes is not so easy. He opens with: “True long-term success requires businesses to improve continually and reimagine how they operate in the face of changing competition and market forces. Yet this innovative urge, which drives so much of the rest of the American economy, is largely absent from large law firms.” [The imperative for firms he says is to] “find different paths to deliver value to those who buy our services. Lawyers today should be asking themselves nontraditional questions: how to apply resources more effectively, to shorten cycle time and lower the cost of their work product and other deliverables, while raising the level of service.”
Making strategic sense all this requires law (and many other professional services) firms to stand on the clients' side of the desk and see the world from the buyers' perspective. That's hard, especially when you're making a million dollars a year. As David Maister once famously put it "Try telling a millionaire he's wrong"!
In Beaton's opinion, this is exactly what firms' leaders need to do: Stand on the clients' side of the desk. The result should be an 'Oh shit' moment. If it's not, then this leader isn't tuned in and should invite a colleague to do join him/her and look again. May be four eyes will see what two don't.
The Beaton Benchmarks provide deep insights into the clients' world. Our surveys of 1000s of clients of law firms provide unique clues to clients' changing needs and what firms can do to better meet these needs in competitively relevant ways. It's inspiring for us to work with leadership teams as they challenge their beliefs and push the boundaries in their quest to make their clients' the ultimate arbiter of value.
It's just a pity more firms don't choose to help their clients in this way.
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