Researching the market: The case for market research in law firms

Understanding your clients’ businesses and meeting their needs effectively and efficiently are essential pre-requisites for successful business development. However, Nick Mercer, chief operating office of Matthew Arnold Baldwin, believes that many firms are still woefully lacking in the internal or external information necessary for overcoming weaknesses and moving forward as a business. He argues that market research is one way of rectifying this serious knowledge gap in successful client-service delivery.

Many of the biggest companies in the world, and certainly the most well-known brands, rely strongly on market research to inform their business strategy. Paradoxically, professional service firms, which rely for success entirely on how their individual customers perceive value from less tangible products, are by far the rarest users of independent market research. This cannot be due to stupidity or lack of resources. Perhaps it is a mixture of lack of understanding – or fear of what one’s client might say about you to a third party.

Matthew Arnold Baldwin (mab) is a mid-sized regional law firm based in Watford with 20 partners and 140 staff, offering a broad range of skills and specialisations in both consumer and business sectors. The firm has tripled in size since 1996, has seen a 17-per-cent turnover growth for the past two financial years and an increase in head count of 54 per cent over the past three calendar years.

Under ISO 9002 and Lexcel, most law firms are required to carry out some form of quantitative research to get feedback at the end of a proportion of their completed matters. Whether this is by questionnaire, telephone questioning or by some other documented methodology, the firm will of course correct any individual comments about a particular matter as quickly as possible. But in the wise firms, what will be most carefully reviewed are the percentages and trends of performance scores and the statistical patterns, the bigger picture by which are compared standards of service across the firm, both between departments and over periods of time.

All firms, particularly those that are on a marked growth curve, should take time out to review their performance to ensure that service is not jeopardised by the stresses of a widening or enlarging business. This is particularly true of law firms who, with a typically ‘flat’ management structure, tend to have many partners primarily concerned about their own particular lines of service and do not have a clear appreciation of the performance of the firm as a whole.

Of course, many believe they have that knowledge, but every partner is likely to have their own and different view. Even if a law firm conducts its own assessment, the messages that arise from the work may be sidelined or dismissed, the politics of the firm prevailing over objectivity.

Mab re-branded in 2001 and moved into new premises. The re-branding was founded upon the careful advice of a substantial client-research exercise. This was constructed across 50 clients and non clients (matched by SIC code) and carried out by Total Research, one of the UK’s biggest research companies specialising in business-to-business research, particularly for professional firms.

That exercise gave mab objective, in-depth understanding of what our clients said they needed and how they choose suppliers. It also evaluated their perception of our services, strengths and weaknesses.

The year following mab’s re-branding saw bumper partner profits and a substantial increase in turnover. It also helped when clients like Xerox, Nissan and Hewlett Packard telephoned and asked us to work for them as soon as we switched on the new signs!

A ‘one size fits all’ approach does not work and mab has over time developed a range of tools and approaches that give us a level of understanding of our business that many law firms do not have. So every year since 2000, mab has gathered a further objective, external assessment of its business expressed in the views of its client base. The data has built each year and is now a significant body of comparative opinion on the firm’s progress and performance.

Having identified the need to bring in an external research firm, what are the considerations for selection? Naturally, evidence of some experience in the professional services sector is good to have, but it is not the be all and end all. The typical method of assessing research companies is to obtain proposals, which focus on objectives and method, but often these proposals do not answer the two questions you should be asking:

Whoever you see at briefing meetings, and whoever writes the proposals, who will be designing and managing the project, and interpreting the findings? How much credibility will the individual have when liaising with and presenting to your partners? Insist on meeting the project manager who will be working on the project day to day before committing to a supplier;
Whatever the nature of the approach, who will be talking to your clients? These people will be representing your business – you should know who they are, and be convinced they are right for the task. With due respect to youth, many interviewers are young and relatively inexperienced in business. For this type of work, you need people that are appropriate, as well as being good interviewers;

Mab’s latest survey, in September 2003, chose face-to-face meetings with clients, drawn from a cross section of commercial lines of service in the firm. This approach, while costlier than the alternative solution of telephone interviews, provides important benefits:

It recognises and emphasises the value mab places on these clients;
In a market where confidentiality is a big issue, the personal contact reassures the client and encourages greater openness (interview comments can be an anonymous or attributed as the client decides);
There is an opportunity for a longer, more detailed discussion than is possible on the telephone;
There is opportunity to really probe and challenge clients’ views;
There is more opportunity to go well beyond the boundaries of ‘client satisfaction’, to tackle other key issues, such as branding, corporate identity, communications, client understanding of the business, barriers to increased share of business, etc.

Surveys of this nature are much more than ‘numbers’. While data helps to provide a measurement of performance, the anecdotal information has just as much impact, and often provides not just an observation on the problem, but also implies a solution.

In addition to this work, mab of course still conducts more frequent mail-based surveys to monitor our performance on individual jobs. Compared to telephone interviewing (anything from £20 to £40 per interview), mail-based surveys are highly cost-effective, although respondents tend not to provide a great deal of anecdotal information, even if invited to do so. They prefer to tick boxes making interpretation and action planning more difficult.

Of course, the other downside of mail surveys (or indeed more often nowadays online, web-based, or other electronic-type surveys in their many formats) is the lack of control as to who responds. Among consumer clients, we have found respectable response rates for the mab survey of up to 30 per cent, depending on the sector, but among corporate clients this drops substantially. Our conclusion is that mail is really not the right tool for corporate clients. Many will advocate electronic surveys in the corporate sector and they certainly have their place, but again a richness of feedback is often lacking.

The solution is to make the respondent task as interactive as possible. In our view, the tool that best meets this requirement is a web-based survey such as Interactive Dialogues (www.interactivedialogues.com). With this, the client company (mab) develops a questionnaire-discussion guide, which is entered into Interactive Dialogue’s server. The sample of respondents is then sent a formatted e-mail from their named contact at mab (the research company e-mails non-clients), asking them if they would like to participate. We explain what the survey is for and offer a copy of the findings. In the case of hard to penetrate audiences (and sometimes non-clients), we offer a charitable donation to a named list of charities if the respondent completes the survey.

The respondents then log onto the survey via a hot link in the e-mail and complete the questions online. Their answers will be a mixture of specific choices, yes/no answers and discursive free text. The server keeps track of the responses and can send reports to the clients of which respondents have answered or not, etc. It also performs the basic statistical computations and graphs, leaving the researcher only to interpret the raw scores for their statistical importance, and write his report or commentary.

Firms typically run such projects live online for two to eight weeks. This makes the exercise extremely cost-effective and allows firms to repeat surveys more regularly, or to refresh data and opinions, without incurring huge extra costs.

Bringing research into mab’s planning has informed our decision making in a special way. We have been able to test proposals objectively. Without it, partners would have been much more nervous about taking some of the bigger steps forward. Research gave them the necessary confidence in the likelihood of success.

For mab’s re-branding and re-launch, research also enabled us to validate whether we should change identity, and how far we should go – including what the firm should be called. We were able to test the favourite shortlist for the new identity. A year later, we were also able to measure how the firm was progressing on its objective to change perceptions of the value we bring to client’s affairs, the range of lines of services we offered and, above all, our recognition ratings for these things.

Professional assistance has brought objectivity and statistical robustness to what was previously only subjective, personal opinion. Partners can no longer say that they know how clients think, without testing their perceptions against the audited information. Above all, partners have learnt to focus not just on the individual comment, but on the trends and how those change over time.

Listening to our customers is the lifeblood of a service business. We cannot concentrate upon it enough.

So getting a supplier that is a true professional partner in understanding the issues that need to be investigated, and that can design a sensibly focused discussion guide to lead the questioning, probe into the right areas, and then tease out the real answers, without frightening off the client, is very important. Equally so is cost effectiveness, so care in choosing the right supplier to help is essential.

In the experience of mab, such an in-depth approach to market research provides strategic gold dust.

Nick Mercer is chief operating officer at mab. He can be contacted at: nick.mercer@mablaw.co.uk.