Current economic conditions mean firms need to be leaner, more efficient machines. Tim Nightingale gets GCs' views on how cutbacks affect client service

FTSE 100 companies are telling us they aren't looking to reduce the number of firms on their panel, but they will be spending less and driving a harder bargain. As work becomes scarce and firms ready their scalpels to slash marketing and business development (BD) budgets, the key is to cut in a way that will help the patient recover more quickly, not threaten recovery.

Listen

In a recession, it is more important than ever to get close to clients – this is where you invest your budget, not where you cut it. So the first step is to listen to clients. Talk to them regularly about the relationship, their business, their strategy and their needs. Fee earners, not just partners, should be doing this – everybody needs to have a good grip on what is happening in the client's business. Record it and make it easily available. All of this data needs to be aggregated, sifted and understood to extract the wealth of insight buried within. You really need that level of granular detail.

On the whole, the general counsel (GCs) we have interviewed are not impressed either by their advisers' knowledge or how they acquire it.

Develop

How many of your clients have just one or two contacts in your firm? Broaden and deepen the ties. This is not a job just for partners; link fee earners with their peers across clients' organisations. They may need some encouragement and training, but now is the time to work the phones – not cold calling, but staying in touch with clients so you do not miss any upcoming opportunities.

This also means investing time in going to see clients. You will need a considered reason for doing so: performance reviews or bespoke training all add value to clients. An offer of a secondee may be appropriate and will usually add real value. Alternatively, invite clients to come and speak about their business – but do your homework first. One GC was invited to do this last year and first quizzed the firm's team on his company – its CEO, market cap, strategy and so on. Our in-house source described the team's performance as "pitiful". It was a major City firm.

Measure and assess

You do not want to waste resources but nor do you want to cut the things that produce results. Make sure your systems track your various BD activities; refine your BD time recording to specific categories, from visits to existing clients to pitching for new work from new clients – and track progress and results. If you don't measure it, you can't manage it and will not know if you are doing the right things.

Pitching is an area in its own right. The temptation is to charge around competing for everything, however unlikely you are to win it. If you haven't already, develop criteria to assess whether or not it is worth responding to an invitation to tender. Responding takes up the time of people – fee earners and BD specialists – who could be working on something else. It also usually costs thousands. Be selective and go after just the work you really want and are well positioned to win. This will save on cost and effort and increase morale when the pitch success rate improves.

To learn whether you are doing the right things, be it on tenders, deals or how you manage your clients, you need feedback. Most firms debrief pitches nowadays, although a FTSE 100 GC revealed recently that after her company's last review she offered all firms a face-to-face debrief and less than half took her up on it.

The cost of post-transaction reviews is minimal and the potential insight enormous, but make sure it is done consistently.

So, both BD people and fee earners need to get out into the market and get closer to clients. Not everyone is doing this. Another FTSE 100 GC told me that a year after arriving in the post and after the initial 'nice to meet you sessions', not one firm from their extensive panel had asked for a meeting to understand how he wanted to work and how he would lead the legal function.

Where to cut

While all these activities should be recorded, supported with training and incentives, the converse is also true. Whatever you were spending money on that is not keeping you close to the client is where you should apply the cut.

Our research shows that hospitality, entertainment and sponsorship are not effective in the present climate. Anything that appears 'lavish' should be reined in. It is time for sense and sensibility and a steady hand on that knife.

Tim Nightingale is the founding director of professional services research company Nisus Consulting.