Of all the client service attributes we measure in our Beaton Benchmarks studies, Cost Consciousness is the one that has increased in importance the most since the 2008 downturn. Not the quantum of fees, which has shown no increase in relative importance, but Cost Consciousness, which clients describe as their advisors "spending our money as carefully as if it were their own".
The news that DLA Piper is being sued in the US by a former client for its "sweeping practice of overbilling" just confirms Beaton's research.
What clients truly value is more complex than a simple trade-off between the benefits they receive for the fees they pay. Our studies indicate Cost Consciousness is a vital component of clients' perceptions. And more often than not, when clients get upset about fees, lack of Cost Consciousness looms large as a root cause.
During the proceedings, emails were filed from DLA Piper lawyers where they joked about the bill running over budget and described a colleague’s approach as “churn that bill, baby!”
Now the alleged quantum of the fees, at $675,000, is clearly significant. But fees and value are positively related in the professions, particularly for premium providers. So just being expensive is unlikely to have been the real problem. I wonder whether what most angered the client was the firm's attitude to spending his company's money.
Our own research shows that if you demonstrate Cost Consciousness then the quantum of fees will have relatively little impact on clients' perception of your value, particularly if you also provide high levels of client service. That is, if you communicate with the client openly and regularly about fees, demonstrate concern when costs are mounting, and show an eagerness (yes, eagerness!) to discuss their budget constraints and how you can work within them, then clients will more readily accept your rates.
But if you demonstrate a cavalier attitude to spending their money, you can expect clients to push back on every single invoice, no matter what the amount. You can expect them to be angry. Perhaps even angry enough to take on the world's largest law firm.
Adam Victor, who is fighting his bills from DLA Piper (Hiroko Masuike/The New York Times)
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