Reflecting on my first few months at OnePlace, I realise I’ve met with over 20 existing clients; to find out what’s new with them, gather their feedback and talk future plans. I’ve presented to over 40 prospects across 8 countries; listening to their requirements around growth strategy and exploring how OnePlace might be aligned – and this has been a privilege. I’ve attended 7 industry events including OnePlace’s inaugural EMEA User Forum. I’ve noticed some recurring themes bubbling away, themes that seem to transcend firm size, specialism and location. Themes that we all need to think about.
Increasing financial and competitive pressures are causing firms anxiety more significant than I’ve ever witnessed before and yet most firms don’t really understand where their profit comes from, nor where their future work is coming from. That also means they can’t begin to assess and decide what work is good work. What work should we decline if it doesn’t make good business sense? It’s a hyper competitive marketplace – working in a sales role myself I know firsthand just how difficult it is to make and justify these decisions.
Today there is a need to align efforts to a firm’s long term strategy and not just to the area that might be successful this quarter or year, this is how you’ll achieve firm-wide growth and meet strategic targets. Firms need to nurture the areas for growth and where there are no profits be brutal and I think it’s a priority for staying competitive and successful. Better visibility and knowledge of the business is a must and ultimately this means knowing and understanding their client relationships better. I see the smart firms shifting in their view of long term client relationships, from a general infrastructure issue to a new cultural approach and one that is necessary to retain, grow and win business.
Remuneration also needs an overhaul. I think we’re all up to speed with the growth in alternative billing arrangements and the slow but welcome death of the billable hour. Fixed price work is here to stay, so are the new entrants and new models for law firms. Firms are looking for ways to reward fee earners in relation to the firm’s success, not just their own.
I’m reluctant to mention ‘digital transformation’- we’re all bored of that term – but I do see that law firms need to continue to harness technology. In my world client feedback is a big part of this, its collection and, more importantly, its analysis and the ability to action it. I’ve seen a palpable drive from a number of ‘Top 100’ firms wanting to increase client feedback and use it in a more sophisticated way. It’s a top priority and means changing a traditionally resource heavy manual task, that as a consequence takes place in a very limited way. I think this is where AI has a clear role to play in helping firms extract complex themes and individual sentiments from feedback, automatically. Enabling, not only the collection of feedback from many more clients but more significantly, the automated analysis of that feedback in relation to business rules and goals, and then using it to help make data-driven business decisions.
It’s my view that culture is one of the most important elements of a law firm’s success – today it can be a key differentiator. Strategic goals are easy to articulate and set; “Grow by X percent by Y date” or “develop a niche capability in ABC” etc. But less thought is given to answering ‘How do we get there?’ and this is where, I think, culture can be either a barrier or a helper – a drain or a radiator. Firms need to build a culture where client relationship management activity is developed, valued and used in support of strategy. The firm’s culture needs to radiate the firm’s strategy and not be diluted by the needs of individual lawyers. Once you have information about what clients want and don’t want, like and don’t like, you need a culture that allows you to react to the information, make business changes, decisions and actions based on it. I’ve spoken to a number of top 50 firms where, for the good of the firm, and in response to client feedback a partner has stepped aside for someone who was a better fit for the client relationship. The Firms brave enough to do this – will be the long-term winners.
Yes, that latest Citi Hildebrandt report has some curious content, however, in the context of the real-life discussions and meetings I’ve been having, some things did resonate for me. Firstly, it’s what you know, not where you are. Getting to know your client’s industry sector first and then applying legal expertise is vital, it’s not about geographic coverage or even legal practice area. Get to know your client and their industry context and it will be far easier to create a relationship that brings benefit across the firm. This one seems so obvious when you see it written down and I think firms will continue to embrace technology to make this an easier evolution.
I also agree there is a looming risk and concern around the aging population of partners that will soon retire – with important client relationships bowing out with them. There’s worry around how to manage the impacts of this. However, by changing to a client understanding mindset rather than a legal work mindset your firm will get to know and understand your firm’s clients. By engaging with them on a regular and relevant basis you’ll also be reinforcing the right culture and business practice and you’ll remove this particular worry.
I’ve been thinking – what does Legal’s 10-year picture challenge look like? Thinking back to 2009, the legal landscape was certainly a different beast back then. Today, we are living in a VUCA world – one that’s more volatile, uncertain, complex and ambiguous. Disrupters and new business models are proving very challenging especially to incumbents and yet I also feel a sense of excitement as firms start to properly understand the importance of long-term client relationships and embrace new ways of working. I think, overall, we’ve improved with age.