[1]Future profits: do firms understand why clients choose them?
Law firms are not maximising the potential in either their clients or their staff, according to new benchmarking research seen by Legal Futures.
Firms reported very different results from cross-selling, for example, with the most successful firms reporting an average, across the whole portfolio, of two specialisms per client. For firms at the other extreme, only 10% of clients use more than one service.
The level of payback from competitive tenders also differed widely, with success rates ranging from 10% to 100%, while the numbers of clients where write-off occurred ranged from 1% to an estimated 50% by one participant.
The research forms the bedrock of a new benchmarking tool launched by The Thriving Company to help firms understand how well they are positioned to drive growth in revenue and profit. An initial 25 firms reviewed a range of so-called “key levers of future profitability”, comparing how well they are set up to grow future billings, manage costs, and improve profitability.
It found that many firms have already implemented value-based pricing, tracking and logging of referrals, and effective identification of the major potential referrers of work across other professional advisors. However, only around half objectively understood the most important factors that drove choice of law firms in their target market, and only about a third used this insight when training staff or measuring their performance.
Robin Dicks, director of The Thriving Company, said: “There is a disconnect between the capabilities that allow firms to win and retain work in their markets, and investments in training or performance management which currently have little financial benefit.”
When it comes to boosting the productivity of people, two-fifths of firms used staff surveys to fully understand how staff performance could be improved, and while only one in five operated 360° feedback to improve leader and team performance. However, Mr Dicks said appetite for this seems to be growing.
Mr Dicks said his tool is different from other benchmark surveys because instead of comparing past performance, “it gets to the nub of what drives future performance”.
The self-review is free to undertake for Legal Futures readers, who can access an online self-review of their own performance and gain a confidential summary comparison of their performance against peers via this link [2].