Clock ticking on law firms that fail to focus on customer service, research warns

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By Legal Futures

11 April 2016

Adams: time for law firms to look outside the legal market

Adams: time for law firms to look outside the legal market

There is a “disturbing level of tunnel vision” among law firms when it comes to adopting modern customer service standards, which could ultimately make the difference between success and failure, according to a report published today by Peppermint Technology.

It said that in an ever competitive market, law firms that are not thriving may only have a brief chance to turn things around before it is too late.

The research – written for Peppermint by Legal Futures Editor Neil Rose – showed that law firms were falling behind other sectors when it came to client satisfaction and customer support, with the gap getting wider as many law firms failed to cover the basics including following up enquiries and keeping in contact with former clients.

The research said firms lacked the willingness to change, remained sceptical about the benefits of automation and were reluctant to take a long-term view and invest sufficiently in their business.

Law firms invested only 4.1% of turnover in IT, compared to consultancy (4.9%), accountancy (5.1%) and financial services (7%).

As well as taking a broad look at the professional services market, the How Law Firms Measure Up Against Other Sectors research conducted empirical research to compare lawyers to accountants and consultants, polling around 50 of each.

Among the findings were that:

  • A third of law firms have not been involved in any business innovations in the last two years, a much higher figure than the other two sectors. Consultants have been the most innovative, in particular in sales and marketing, and pricing – two areas largely ignored by many law firms to date;
  • A third of law firms did not maintain a regular relationship with their clients once a particular matter has been completed, compared to 26% of accountants and 13% of consultants;
  • Law firms were behind in offering clients online access to enable case tracking, or to check and download documents – 8.7% of law firms have this, half the proportion of accountants;
  • 39% of law firms carried out regular client feedback surveys, behind consultants (52%) but ahead of accountants (28%). A smaller percentage in each sector incorporated the results into their client records and an even smaller percentage used the information to benchmark their performance over time; and
  • Almost half of law firms (46%) expected to invest in IT over the next 18 months, while 32% anticipated investing in sales and marketing, and 22% would look again at their pricing and customer delivery.

Arlene Adams, the founder and CEO of Peppermint, said: “Other sectors consistently perform better than lawyers in client satisfaction surveys.

“It is time for law firms to look outside the legal market for inspiration and to benchmark their performance against other sectors. Technology will increasingly blur the lines between legal and other professional service sectors and law firms need to have the tools to compete. If they are not looking after their clients, others will.

“This report indicates that firms thrive in the status quo and have less appetite for risk than other sectors. This needs to change. Any successful business needs to be brave enough to make decisions, embrace change and invest in technology for the longer term. Law firms are no different from other business sectors and if firms only looked outside of legal they would soon realise that.”

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