The expression 'client care' – to denote a formal management process or set of activities, rather than merely an assumed and implicit aspect of the service team-client relationship – began to gain currency within law firms at the beginning of the 1990s.
Various factors combined to highlight the area. At the time, many areas of industry were implementing customer care programmes, and naturally this had a spin-off effect on the profession. Similarly, quality assurance programmes, previously largely confined to manufacturing, were being adapted to the service sector. With minds on the recession at the beginning of the decade, law firms began to realise that developing existing clients was a cheaper way to increase revenue than chasing new ones.
The link between client retention levels and profitability within professional firms is well established – and not just in times of recession.
Research carried out within one of the Big Five accountancy firms showed that a 2% increase in client retention was equivalent to a 10% reduction in overheads. Another recent survey, encompassing the legal and other professions, suggested that a 5% increase would lead to a 25% improvement in profitability.
Not surprisingly therefore, the majority of law firms have, during the last few years, put in place some form of client management programme. At its most modest, this might comprise a planned schedule of events including hospitality, seminars and mailings, with the objective of maintaining regular contact and possibly an annual review meeting – providing the opportunity for the service team and client to discuss the overall relationship, outside the context of day-to-day transactions.
At the other end of the scale, larger firms establish more elaborate programmes for key clients. Typically, a series of internal meetings will be held at which the team will discuss business issues facing the client, opportunities to develop more work and cross-sell other services.
Some firms also invite senior people from the client organisation to attend one or more of these meetings. Where this has been tried the results generally have been positive, both in terms of strengthening the relationship and generating additional revenue.
But there is one aspect of client care which appears to have been neglected by many firms: seeking independent feedback from clients on the firm's performance. The key word here is independent – inevitably responses tend to be more candid when someone who is not associated with the service team carries out the review.
In his book, Managing the Professional Service Firm, David Maister suggests that a questionnaire should be sent to all clients during or at the end of a transaction, with responses sent back to the managing partner for review.
The underlying assumption is that while everyone understands what good service is, people tend to be embarrassed into ensuring that they always provide it. This is the Weight Watchers principle – you are more likely to stick rigidly to your diet if you know that you are going to be held accountable for the results.
This has the obvious attraction in terms of bringing about changes in behaviour and some firms have adopted this approach. But it has its limitations. Questionnaires can be used to record degrees of satisfaction or otherwise in various areas, but tend to be less effective in identifying specific issues that need to be addressed.
Where there is a major personality clash between a team member and the client, or the client is grossly offended by the lead partner's behaviour, or the service team has been plain incompetent – in these circumstances the client is likely to express his dissatisfaction in the clearest possible terms – a questionnaire is hardly likely to be necessary. However, other problems that arise in client relationships are not like this. Concerns or frustrations may be vague, their effect often cumulative.
For this reason, client attitudes should be principally monitored through face-to-face interviews, preferably conducted by the firm's senior marketing executive or an independent consultant. This is a much more effective way to detect nuances or misunderstandings that could lead to problems in the relationship.
Once the service team has been briefed on the findings, a plan should be developed to address any areas where the current service can be improved. Of course, this process can also be used to identify selling opportunities and to focus the firm's contact programme and general communications with the organisation.
In most firms a substantial proportion of total fee income is contributed by relatively few clients and it is best to start with these key sources of revenue and work downwards. For clients whose importance to the firm is marginal, the questionnaire option is likely to suffice.
Some partners may feel uncomfortable with the idea of their client relationships being put under the microscope in this way. In practice, most clients respond favourably to being given the opportunity to discuss the firm's services with someone from outside the team. Provided that the findings are acted upon, the result is often a stronger, more profitable relationship.
John de Forte Associates is a management consultancy.