Outstanding service: Going back to the basics

Firms are continually looking for a differentiator that will set them apart from their competition. This is particularly the case during economic downturns when retaining clients becomes imperative for sustaining profitability. Lisa Hart, a director at Acritas, examines how effective research of your clients’ needs can make all the difference in this competitive marketplace.

As competition intensifies in the legal market and overheads continue to rise, professional firms have to be more cautious with budgets and focus on initiatives that will have an impact on the bottom line. Marketing experts constantly remind us that our money is better spent on strategies that look to maximise value from existing clients rather than those reaching out to win new business. As a result many firms spend significant sums of money on a variety of new initiatives, for example, key account management programmes to help retain major clients.

Managing partners regularly listen to their management teams arguing the case for a variety of essential projects, resulting in countless valuable hours deliberating which initiatives will deliver the most to the bottom line. In a great many instances they do this without a clear understanding of what clients really value and most importantly stick around for.

Few firms invest the time and budget to actually go out and ask their clients in a systematic manner what they need to focus on that will lead them to retain or even increase their existing spend. A well-designed research exercise can help to inform management thinking and add more certainty to the decision-making process than second-guessing how to add value to your client service.

Aside from the management information, carrying out research has other benefits. The firm creates an impression that it is forward thinking, it is not getting complacent and it really values the client’s business. Clients get the chance to air their views in an objective, non-sales environment and to have an influence on a firm in which they are a stakeholder. They can also express an opinion on which initiatives would most appeal, provide the most value to them and deliver the most significant benefits.

Asking clients what they think does not have to be a large or costly exercise. For most law firms the pareto rule applies: the top 20 per cent of clients providing 80 per cent of the profit. Obtaining the views of this group, as key stakeholders in the business, is essential. Researching a wider audience is of course beneficial but the need to retain and grow business from your key clients means that understanding their views and needs must be a priority.

Before embarking on a research exercise, there are important factors to consider. Taking these into account will ensure that the study delivers and does not end up sitting on a shelf collecting dust:

Management must be prepared to act on results – by conducting research you create an expectation for change and action must be seen to be taken when, invariably, issues arise;
Research needs to tie into current business objectives – to ensure the research is measuring the right areas and does not deliver more questions than it answers;
Surveys should be done independently if at all possible, or at the very least by an independent employee. Clients are unlikely to be completely honest with their own contacts and conversations can often stray to sales or project work;
Surveys should also be professionally designed and administered. Badly designed or administered surveys can do more damage than good and undermines not only the credibility of research but also the sponsoring brand.

A good starting point is to bring together a group of key individuals from the firm before a research tool is designed. This provides not only an opportunity to share ideas, possible scenarios and align the objectives, but also creates buy-in to the research project and prepares management to start focusing their efforts on the results when they arrive.

Industry benchmarks – a comparative view

The Acritas Client Satisfaction Monitor service for legal and accounting firms has been developed to help firms measure client satisfaction among their client base and compare their results with an industry average. This is common practice in many industry sectors but benchmarking is relatively new in legal firms.

The monitor is survey based and the questionnaire has a series of standard questions, which are often incorporated with bespoke questions that are particular to an individual firm and their specific research objectives. The survey asks the participating firm’s clients to rate the importance of a range of service attributes, and subsequently, rate their own legal supplier’s performance on the same list of attributes. The monitor also evaluates selection criteria; competitors and trends in legal and accounting spend.

Every firm that takes part in the monitor has the opportunity to compare all their results with industry benchmarks. The benchmarks are made up from a wide range of firms. As data emerges there are many surprising findings within the industry-wide benchmark results.

What we can learn from the benchmark study

Overwhelmingly, the industry is falling behind expectation in over half the areas tested. This suggests that many of the brand claims that exist in professional firms’ literature are not being delivered. There are clearly significant opportunities for firms to differentiate themselves by really excelling in areas that are the most important to their clients, to get a step ahead of the competition and really protect and even grow their market share.

The monitor reveals that it is the most basic service attributes that are the most important to the average client – and this is where firms are falling behind on performance.

Clients believe the most important attributes of a legal services provider are simply doing what they say they will and being responsive and accessible. Scores in these areas reveal significant performance gaps – simple things like ‘too much voicemail’ often being to blame. Responsiveness frequently features in professional services research as a key strength of a most favoured provider. However, in reality, how much of a firm’s budget is invested in initiatives to improve performance in these two basic areas? Clients feel their professional services providers are not as committed to good service as they should be.

Clients also feel that their law firm providers aren’t focused enough on helping them to be successful. They fail to add value because they do not have a clear enough understanding of their needs. This, in turn, makes it difficult to deliver truly commercial advice and to pre-empt any issues that might be likely to come up.

Of course all of these symptoms can be put down to lack of time. Clients recognise this by blaming inadequate back-up and resource. However, clients do feel there is room for improvement in teams working well together. By involving tasked fee-earners in the project as a whole and giving them more exposure to the client, the fee-earning team offers a more cohesive service and this can only help to improve performance in areas such as responsiveness. The downside is obviously increased hours, but perhaps a proportion of these hours can be written down to client management rather than spending large sums of money on initiatives that don’t really deliver what the client wants.

There is little evidence of issues with pricing levels. However, communicating with clients about costs is a weak performance area. Billing procedures are still not effective enough at keeping the client informed and improvements need to be made in communicating billing levels more regularly. Again a simple way of improving service and consequently client satisfaction is to talk to clients about their fee along the way.

Enhancing service delivery through advanced technology is considered to be the least important attribute – and firms must spend hundreds of thousands on projects such as extranet services. Quite often clients may not be aware of the benefits that a technology project might deliver but the lesson here is to consult them and test the appeal of those benefits before embarking on resource intensive projects.

Having reviewed some negatives, let’s consider the positives. Firms are meeting expectations in a number of important areas. Clients feel that firms are working to develop good relationships and working to better understand their business. Clients also feel billing is clearer and has seen improvement over recent years. On a very positive front, clients are expecting their spend to increase going forward.

For some of the firms that have subscribed to the monitor, their own performance profile has been different to the benchmark. This reinforces the message that each firm needs to consult their own clients. However the importance of these basic service attributes has been evident with everyone.

Firms that have subscribed to the monitor have said it has helped them to really focus on the initiatives that mattered to clients. The evidence was there and could not easily be disputed. The findings helped to inform their strategic plans going forward by identifying what initiatives and projects really will have significant impact on client satisfaction.

The monitor can also provide individual feedback on every interview – participants are always given the option to be attributable or not. In one particular case, the report identified critical issues that the relationship partner had no idea about. Consequently, the firm was able to act on the report immediately and the partner was able to save a significant account.

Through these individual reports the benefits of the research can be seen straight away. Immediate actions can be taken by partners with clients and help to create the enthusiasm to get initiatives started. These individual actions will of course reflect the overall findings.

So what is the key message? Talk to your clients, commission some professional research and let the findings guide your investment decisions.

Lisa Hart is a director at Acritas. She can be contacted at: lhart@acritas.com