Opinion: Who made an acronym out of client-relationship management?

By Simon Slater, managing director, First Counsel Consulting

What is it with law firms? When viewed subjectively they can seem curiously complex organisations, but on any objective basis, they are simple businesses. So why do they find it necessary to complicate matters by jumping on every management bandwagon that comes along? The most basic definition of marketing is to meet the needs of clients and customers with relevant services and products. Simple really – identify market and needs, design and supply service or product, and everyone’s happy. But in order to compete successfully in an increasingly discriminating world, three
other elements are critical:

Clients must have a good – if not superior – experience when they buy your service;
Your service should in some relevant way be superior to your competitors’;
You should make a superior and sustainable profit.

Can you be sure that all of your clients have a good experience every time they deal with you? Is your product or service superior to those of your competitors every time? Do you make a consistently healthy margin on each matter? The answer is probably no. We’re dealing with people here, bright sparks. They are the product, the experience, the source of profit. And a management acronym is the last thing they need.

CRM (client-relationship management) is but the latest in a long line of management fads to afflict law firms over the past 15 years. It was preceded by BPR (business process re-engineering), ERP (enterprise resource planning), IIP (Investors in People), MIS (management information systems) and TQM (total quality management). Only two of these have ever had my full support – IIP and MIS. A successful firm needs to invest in its people and information systems, but it can continue to thrive without the other distractions. A law firm needs less complexity, not more.

Take CRM. This is a fad I have never advocated in the professional-services market. Don’t get me wrong, I’m all in favour of qualitative service reviews if they are carried out and followed through effectively. It is CRM ‘programmes’ about which I have grave doubts.

In my view, many firms are in danger of over-managing their businesses by designing unwieldy, unworkable frameworks with the principle objective of exerting control. The trouble with controlling client relationships, knowledge and resources is that it tends to dampen all of the things that clients hold dear: initiative, flair, enterprise and good, old-fashioned service excellence.

It is strange how firms like Slaughter and May, and Wachtell, Lipton, Rosen & Katz continue to confound us with the quality of their reputations. These are the last firms you would ever expect to get embroiled in management fads. Rather, they thrive on an uncompromising approach to people selection, a sharply targeted approach to market, and an uncanny ability to turn away clients. Without CRM, Slaughter and May acts for more FTSE 100 companies than any other UK firm. If anyone’s relationships are institutionalised, it is theirs. Could this be because they understand better than anyone else the fundamentals of business (outlined in the bullet points above)? The answer is manifestly yes. It could also be that they do their jobs to such a high level of quality that they don’t need a ‘programme’.

It seems patently obvious to me that firms like Slaughter and May simply focus their attention on the client interface rather than on themselves. They appear to be fearless in their pursuit of legal and service excellence such that they have no need for a programme. They have no use for a means by which to mask their inadequacies or shirk from their responsibilities.

Marketing sophisticated legal services successfully relies on patiently building relationships and reputation by focusing on helping clients rather than managing them. And of course firms like Slaughter and May or Wachtells wouldn’t call this marketing at all. They simply have a fantastic product meeting the needs of fantastic clients, creating unparalleled, positive word-of-mouth and mouth-watering profits.

If such a firm were to adopt an acronym, it might indeed be CRM, but I can’t help feeling that it would stand for Client Result Maximisation. If I am right, these firms probably have more than their fair share of truly client-focused people. This all goes back to selecting the right people to bring into the business in the first place. From the point of graduate intake, they are uncompromising about recruitment. They are uncompromising about retention and they are uncompromising about under-performance – at any level.

Call me strident, call me counter-intuitive, but it strikes me that all firms need to do is to enhance the client’s experience of dealing with them. They can achieve this by sharpening their focus on achieving results for the client. The word-of-mouth and profits will follow.

Above all else, firms need a healthy dose of business common sense. That’ll be BCS then.

Simon Slater is managing director of First Counsel Consulting. He can be contacted at simon.slater@first-counsel.co.uk